Auction Vehicle Logistics: Optimizing Single Car Shipments
At Carpool Logistics, we pool cars!
Supply Chain Disruptions
There are literally countless articles about supply chain disruptions in every industry. Everyone is experiencing some form of difficulty, from consumers to businesses. The automotive industry is experiencing one of the worst issues, causing a ripple effect that is damaging to the global economy.
The shortage of semiconductors has been extremely disruptive, with a drop in OEM production volumes in the high teens. The impact is so significant that some OEMs have decided to bring chip manufacturing in-house. What does that mean for the used vehicles?
Transportation Environment for Used Vehicles
There’s no doubt, we are in a different supply chain environment. This one centers around shipping single vehicles or Vehicle LTL (Less Than Truckload of Vehicles). Businesses are shipping smaller quantities more frequently, giving logistics professionals more to manage in increasingly complex networks. But, it doesn’t have to be pricey.
The freight industry has a well built out LTL network with tools to optimize for space and multi-pick shipments. Unfortunately, the Vehicle LTL environment is very different with extremely fragmented networks and manual processes.
There’s a significant opportunity to optimize Vehicle LTL for auto auctions and for the entire automotive industry. Multiple auctions could benefit by partnering with a logistics provider that is able to pool vehicles from multiple clients. This would reduce cost and improve speed.
Fleet/Lease Vehicle Shipments for Auctions
At auctions Fleet/Lease teams often have to arrange transportation for single units. These units typically are scattered from urban to non-urban areas. Some units are being picked up at repossession lots, while others are at businesses, or even residences.
Finding efficiencies in scattered vehicle shipments is costly and slows down the transport process. Single vehicles on average take 2-3 days longer to plan for transporting. Consolidated shipments with at least two vehicles ship within 1-2 days while single units could take 3-5 business days.
Pooling vehicles, for one auction, doesn’t always allow for the most efficient consolidation. It can also cause difficulty for the auctions to meet their customers’ vehicle delivery deadlines. Overlaying volumes for multiple auctions in the same region creates better opportunities for consolidation. This is especially true when vehicles are coming from near the same locations.
Vehicle LTL Optimization
To optimize Vehicle LTL, there are four critical factors to make it a success.
- Volume from multiple auctions to enable optimization synergies.
- The most important component is density or volume of single units in a geographic radius. By overlapping volume from multiple auctions in the region you can find optimization synergies. These units can be pooled to create more attractive shipments.
- Strong working relationships with repo locations.
- The second most important component is developing relationships. People are the core of any business. Creating partnerships with repo pickup locations enables the efficient pooling of vehicles saving everyone time and money.
- Partnerships with transporters in the region.
- The third factor is also human related. It’s important to build relationships with local transporters that can handle operable and inoperable vehicles. Strictly relying on responses from a load board posting to cover shipments, is not a viable solution.
- Optimization software to make vehicle pooling more efficient.
- Finally, it is important to utilize optimization software that enables the pooling of vehicles in an efficient manner. Proper use of technology can help optimize any industry.
Main Benefits of Pooling Vehicles
There are two main benefits from pooling vehicles. Reducing cost of transport and reducing the time it takes to get the vehicle picked up.
Pooling vehicles helps create fuller loads. Better loads make shipments more attractive to transporters. This will reduce per unit transportation cost and number of days to get the vehicles picked up.
Additionally, more desirable shipments attract transporters. You can establish positive working relationships with repo lots when you have a regular transporter network that understands the shipment procedures. Creating a win/win for all stakeholders is possible and it doesn’t have to be pricey.
At Carpool Logistics, we focus on building out density. We partner with multiple auctions in a given region that regularly ship vehicles. These partnerships have enabled us to overlap volume to pool vehicles and create more attractive loads.
To help facilitate pooling vehicles, we invested in software optimization tools that make the process a lot more efficient. These pooled loads mean we can attract more transporters. We want to create a relationship with these transporters. So, we are creating dedicated shipments for specific lanes, scheduling their shipments, and paying them within 48 hours of delivery.
Call us to learn more about our logistics solution for auto auctions.