Do High Prices, Equal a Diesel Shortage?

Fears of a nationwide diesel shortage may be unfounded. The Energy Information Administration has said that, while distillate levels are at their lowest point since 2008, and diesel prices are still near $5 a gallon in many places, a shortage of fuel is not likely. Diesel supply is tight, and inventories are low, according to the NATSO – a trade association that represents America’s truck stops and travel centers.

They are calling it a structural problem, but claim the market is adjusting to get diesel fuel where it needs to be.  They also say that, outside of some major disruption, the current period of stability will continue. This is good news for a lot of auto shippers and long-haul truckers. But what does it mean for you, your auto transport prices, and services available?

In a nutshell, demand is up and the supply chain is strained. Not so strained to result in shortages, but just enough to keep prices high going into the winter months. This will likely result in some pain at the pumps for fleets and drivers who rely on diesel, including auto transporters.

Since August, the average price of diesel nationwide has hovered just under or right at $5 per gallon. However, beginning in October, prices really began to rise, and by the middle of October they were encroaching on $5.30 a gallon average. As refineries in Canada, Texas, and Illinois begin to start back up refining crude oil, the supply chain should see some slack. This has already begun, though it will still be some time before the supply chain sees some easing.

Ultimately, so long as we can start refining crude oil and getting supply back into the pipes, prices shouldn’t increase much more. In fact, prices should start dropping come December and January, so long as everything happens according to plan. But a refinery shutdown or some other technical or mechanical issue could bring everyone back to square one again.

However, experts don’t think that is likely.

What all this has done is increased auto shipping prices as carriers struggle to make ends meet. Winter is a tough season for car transporters, as demand for services drop. So competition among the carriers goes up. While this is good for consumers, as prices tend to go down, the fact that diesel is still so expensive is throwing a wrench in the works.

Cars have to be moved, of course. So if you’re shipping a car, the prices are what they are. But compared to this time last year they’re up thanks to the diesel shortage.

What’s good, though, is that diesel isn’t continuing to go up. On the whole, prices should remain relatively stable – which is great because there were fears that a shortage could lead to seriously increased prices in the car transport industry.

But it seems that won’t be the case. And, with refineries opening in Canada, Texas, and Illinois this month, we should start to see drops in prices, likely beginning with the new year.

And prices are still down compared to during the summer. Summer is the busiest time of the year and sees the most demand. Because of this increase in demand, carriers don’t have to fight for the best-paying loads. Prices go up because it’s the customers that have to be competitive, not the carriers.

While carriers want to set auto shipping prices, it’s the brokers that really work to keep them low.

We touched on this in our “Diesel Prices Hit Two-Year High” post a while back. Brokers nowadays (like us) rely on automated pricing systems that keep track of a ton of different data points. Using these systems allows brokers to keep up with the fluctuating nature of auto shipping prices, allowing for more accurate quotes and better service overall.

This is great for carriers too because brokers aren’t trying to lowball them as much. That’s a bit harsh, but a broker’s job is to find a carrier for a customer looking for car transport services. And not just find one, but find one at a reasonable rate.

This can be hard when prices spike due to instabilities in fuel supply chains or in the face of major weather events, such as a hurricane in the south or a snowstorm in the Great Lakes. Volatility is hard to keep up with regardless of the industry, of course, but it’s especially hard in the auto transport market.

These automated systems brokers use, though, tend to work well enough to keep everyone happy. So even if auto shipping prices are going up because fuel is going up, the ability for brokers like us to continue to serve their customers is unaffected.

Not only that, but it’ll actually help with keeping prices lower since carriers still have to take freight. And since carriers are used to negotiating prices, they often find a good middle ground with brokers that allows them to move cars at a profit while also helping customers save money where they can.

When diesel prices are this high, there’s only so much you can do to save money when you ship a car. But that doesn’t mean there’s nothing you can do!

The first tip is to wait until prices go down. We’re getting into the winter shipping season, after all. And, with refineries opening and supply expected to go up in the next few months, prices should fall a bit by the turn of the year.

If you’re not pressed for time, this is a great way to save some money. You can also choose to ship standby if you’d like. Standby is where you pay less on purpose, knowing it’ll take time to find a carrier. It may take a few weeks, but it is definitely an option if you’re trying to save some cash.

There are other options, but they’re more specific to your shipment. So if you’re trying to save some money on shipping a car but need it done relatively soon, we recommend speaking to a representative. They can give you more information about ways to save money on your shipment and help you find the right services for your needs.

If you’re interested in transporting your vehicle, let us help! Here at American Auto Shipping, we have over twenty years of experience helping customers ship their vehicle. We know what it takes to move a vehicle no matter the situation in the world.

If you’re trying to find a reputable, reliable car transporter who knows how to get things done, you’ve found one. Get a quote to ship your vehicle online via our free quote form. Or, you can give us a call at 800-930-7417 to speak to a live agent. They can answer questions, give a quote, give advice, and much more.

So no matter what you’re shipping, when you’re shipping, where it’s coming from and going to, or how you need it moved, let us help you get it done.