Many of our overseas car shipping customers have been asking why ground transportation prices are rising when oil is at it's lowest point since 2009.
Here are our 6 reasons on why ground transportation is getting more expensive in 2015.
1. Improved US Economy
With the US economy improving, consumers have more money to spend on goods. As trucks haul more than 69 percent of freight in the US, any improvement in the economy leads to an uptick in trucking demand.
2. West Coast Port Congestion
The current congestion at West Coast Ports is certainly not helping. As more international car shippers re-route their cars from the ports of Los Angeles and Long Beach, the availability of ground transporters is running even lower on the West Coast.
3. The Holiday Seasons
The peak demand for trucking is in the fall and winter, where the majority of goods are moved for the holidays. This holiday season shoppers spent more money than ever before. Shopping was up 4% to the tune of $616 billion, the highest level since 2011. With a record year, companies needed more freight moved than ever before.
4. Colder Weather
We already know that seasonal variations affect car shipping, and this winter is no different. Once the cold sets in the Northern states, many truck drivers return to the South to avoid the unfavorable weather. Those that stay get to face the slow and dangerous winter conditions on the roads. Transport becomes slower and more expensive for car shippers.
5. Diesel Prices Aren't Dropping As Fast As Gas
While oil and gas has fallen so drastically, the price of diesel is remaining steady due to the current market. Since diesel is a distillate fuel, it is derived similarly to home heating oil and lower-sulfur fuel. For that reason alone it is affected by various external factors. During the winter, Northern states begin to use home heating oil to heat their homes.. And new legislature is also affecting prices by requiring marine vessels in US waters to switch from bunker fuel to lower-sulfur fuel. As demand for each of these fuels grows, it strains the supply of diesel.
6. Truck Driver Shortage
According to the American Trucking Association, there is currently a shortage of 30,000 truck drivers. There is simply not enough experienced truckers to fulfill the huge market demand.
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