Unpacking the Surge in Automative Parts Shipping Costs

Anyone who works in automotive logistics can tell you about the surge in shipping costs, but why is this the case?
As we overcome the industry impact of the COVID-19 pandemic, such as microchip shortages, the automotive industry is still facing a range of logistics issues.  

Globally, transportation expenses are scaling to new heights, with conflicts, piracy, protectionist measures, and profit motives all contributing to the surge.

But why does this apply to automotive parts in particular?

  • The automotive industry operates on a highly complex global supply chain. A vehicle can consist of thousands of individual parts sourced from many different sources. Any disruption in transportation can have a cascading effect on the entire supply chain. So, whilst all types of logistics may struggle with these challenges, the automotive sector is particularly volatile.

  • Automotive manufacturers will sometimes create parts in demand in order to minimise inventory costs. This means that parts are sometimes not created in surplus. Thus, automotive parts need to be not only be delivered, but also created within a limited timeframe, adding further stress on logistics efficiency.

  • Automotive parts, especially critical components like engines, transmissions, and electronic systems, are highly valuable and often fragile. They require careful handling and specialised transportation to prevent damage during transit. Others still are considered dangerous goods, adding even more complexity to the shipping process.

With all these multifaceted considerations, it’s no surprise that the cost of automotive parts logistics is skyrocketing. Fortunately, there are strategies available that you can leverage to ensure your automotive logistics are done efficiently and at an affordable price.

Strategies for Cost Mitigation

In the quest to mitigate these soaring expenses, wholesalers and distributors must explore various avenues:

Negotiating Better Rates - There are a multitude of carriers out there, and in order to get the best rate, one must be willing to negotiate and shop around.

Streamlining Operations - Implementing new operational practices can minimise unnecessary costs and improve supply chain efficiency. This includes optimising inventory management, reducing lead times, and maximising load capacities.

Harnessing Technology - Embrace cutting-edge logistics technologies such as real-time tracking, automation, and route optimisation software to enhance visibility, anticipate disruptions, and optimise shipping routes for cost savings.

Multi-modal transportation - Integrate different modes of transport, such as rail, road, air, and sea, to optimise the shipping process for both efficiency and savings.

While these strategies offer proven results, they require dedicated time and effort, which is why many wholesalers and distributors overlook them. At FreightExchange, our platform provides fast and accessible access to all this and more.

Embrace FreightExchange For Automative Logistics Solutions

Are you ready to revolutionise your logistics? Get instant shipment quotes, clear surcharge details, discounted carrier rates, and access to a comprehensive suite of shipping tools. Simplify your freight management for a fast and efficient shipping process. Contact FreightExchange or get a free quote to begin saving today.