How 2024 innovations are solving vehicle shipping issues

Welcome to the first-ever Industry Spotlight, a Car Dealership Guy podcast, hosted by Sam D’Arc, COO of Zeigler Auto Group. This series is all about uncovering innovation and sharing best practices to tackle the toughest challenges in the automotive industry.

Sam kicks things off with a candid discussion on the complexities of vehicle logistics — a crucial but often overlooked piece of dealership operations. In this episode, he sits down with Denton Gupton, used car director at Jim Ellis Volvo Cars Mall of Georgia – Volvo’s #1 CPO dealer, and the CEO of Auto Hauler Exchange, Royce Neubauer. Together, they share how top dealers are tackling logistical challenges to drive profitability.

You can stream the full episode now on YouTube, Spotify, or Apple.

1. Logistics is more than a back-office function.

As Royce explains, transportation isn’t just about moving cars — it’s about how fast you can get inventory on the lot, ready to sell. And every delay has a ripple effect. For example, holding a $35,000 used vehicle for even a week longer than necessary could cost $75 – $100 in interest alone, not to mention lost sales opportunities. Denton points out that logistics delays can push dealerships behind competitors, particularly in a hot used car market where speed is everything.

2. Holding costs are a critical expense.

Holding costs like depreciation, interest on floorplans, and lost revenue opportunities meaningfully impact the bottom line. Denton shares how every day a vehicle spends in transit or waiting to be listed is a day it’s losing value. Given that new car prices are now averaging over $48,000 (up 25% since 2019), the cost of delays has never been higher. For high-volume dealers moving hundreds of vehicles monthly, these costs quickly add up to thousands of dollars per month.

3. The brokerage model is outdated.

The traditional broker system relies on middlemen who sometimes lack transparency and accountability. Brokers typically negotiate for the lowest-cost truck to maximize their cut, which can lead to delays, invisible fees, and disputes over damage claims. 

Denton says a broker once quoted him a price, only to charge him significantly more later without explanation. These practices erode trust and make it difficult for dealerships to plan effectively. With trucking costs rising (up 15% since 2020, according to the Bureau of Labor Statistics), inefficiencies in this system are becoming unsustainable.

4. Auction arbitration periods add urgency.

Dealers typically have a 10-day arbitration window to file claims for issues like undisclosed damage or mechanical problems. Yet – long shipping times can consume most of that window, leaving dealerships exposed to risks. Denton mentions that delays can result in being stuck with vehicles that don’t meet standards, particularly when sourcing cars from distant markets. This problem is magnified when shipping vehicles across the country, where transit times can take longer than a week.

Auto Hauler Exchange - The Auto Hauler Exchange has revolutionized the way vehicle haulers and vehicle shippers collaborate. The Exchange is the first digital marketplace of its kind in the vehicle logistics industry. Learn more at www.autohaulerexchange.com.

5. Transport damage is more common than you think.

Fixing even minor issues like scratched bumpers or cracked taillights can cost hundreds of dollars and delay sales by days or weeks. Denton once had a damaged vehicle that led to disputes with a broker, who suggested using subpar parts to cut costs. For premium brands like Volvo, this approach isn’t an option. Dealers need clear protocols and accountability systems to address damage efficiently.

6. Vehicle logistics is like the stock market.

Shipping rates fluctuate based on market conditions, much like commodities or equities. Factors like fuel prices, regional demand, and trucking capacity create daily price variability. Denton explains how understanding these dynamics allows him to plan purchases and shipping more strategically. For instance, during peak seasons like tax refund season or the end of the year, rates often spike, making proactive planning essential. With trucking costs contributing 15-20% of the total cost of goods sold for many dealerships, timing shipments wisely can make a big difference.

7. Technology can unlock massive efficiency gains.

Traditional logistics systems rely on manual processes — emails, phone calls, and paper tracking. Modern platforms can automate much of this work. They provide real-time tracking, instant quotes, and faster delivery. Denton describes how a streamlined logistics system helped him cut average delivery times by 30%, allowing him to reduce holding costs and improve turn rates. Technology also improves transparency, ensuring that both dealerships and carriers are aligned on expectations.

8. Rural and less-traveled routes pose unique challenges.

Not all dealerships are located near major transportation hubs, and sourcing inventory from remote areas often involves higher costs and longer delays. Denton highlights how he sources vehicles from places like Bend, OR, or small towns in California, where finding reliable carriers can be a challenge. This is particularly true for less popular models or niche brands that require dealerships to cast a wider net for inventory. Dealers who understand how to optimize these routes can better compete in their markets.

9. Trucking labor shortages are exacerbating delays.

The trucking industry has a driver shortage. Tens of thousands left the field during the COVID-19 pandemic. Many vehicle haulers moved to less labor-intensive jobs, like warehouse logistics or general freight, because they are more predictable. Denton and Royce discuss how vehicle hauling is specialized. It involves loading and unloading cars and managing tight dealership lots. This work requires a level of expertise that's hard to replace. Addressing these labor shortages is key to improving logistics efficiency across the board.

10. Dealerships need to think beyond transportation costs.

Many dealerships focus only on securing the lowest shipping rates, but this view can lead to higher overall costs. Delays, disputes, and poor communication often outweigh the savings from a marginally cheaper rate. Denton urges dealerships to see the bigger picture. They should consider: how fast can the car be delivered? How much will it cost to hold it? What’s the chance of damage? By taking a holistic approach to logistics, dealerships can unlock significant cost savings and operational efficiencies.

You can stream the full episode now on YouTube, Spotify, or Apple.

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