Dealers are using third-party logistics companies for online deliveries

The automotive industry looks different today than it did a few months ago, but then again, so does everything. Just like the shuttered schools and companies shifting to remote work, we’ve all had to adjust. Luckily, the automotive industry has always been adaptable and ready to meet any challenge we face.

Digital car buying has been on the rise for a number of years now, but COVID-19 shifted the growing trend into overdrive. Cox Automotive (home to Autotrader and Kelley Blue Book) reported 61% of car shoppers’ time was already spent in front of a computer in 2019. This year’s survey found that 37% of people who intend to buy a car within the next six months are less likely to visit a dealership in person because of coronavirus. But dealerships have found innovative solutions—from digital walkthroughs, home-delivered test drives and home deliveries to stay competitive.

Although Motor Intelligence forecasts auto sales down 18.9% year-over-year, the summer’s surge in new car purchases is here to stay. To better meet this demand, dealerships are partnering with auto transport brokers that serve as third-party logistics (3PLs) companies to manage their shipping needs. Here are three reasons dealers should consider partnering with 3PLs in order to meet the demand for online car orders during the holidays and ahead of a busy tax season: 

1. More reliable than “Post and Pray”

Dealers are participating in auctions further outside their local area, creating increased logistical challenges when cars need to be delivered on-site in a timely manner. Dealers will post the shipping job on load boards, “hoping and praying” a reputable transport company takes the job. Dealers should seek out a comprehensive “one-stop-shop” rather than piece together transport services from multiple providers. From pricing, insurance verification, to tending calls and negotiating, one single transport company should be able to offer everything you need now and as you grow. After all, as a dealer, you’ll want to have the “buying power.”

3PLs use trusted, established relationships to fulfill shipments because they supply work year-round to independent auto transport carriers. Carriers can experience business droughts throughout the year and rely on 3PL-sourced jobs to stay busy year-round. Better yet for dealers, 3PLs know exactly who to call for updates on shipping status and handle all logistical issues that arise in the day-to-day transport business like tracking, claims, compliance, and all communications. Companies like Montway Auto Transport coordinate all of this and have a proprietary online dealer portal to check on the shipment status, eliminating uncertainty and the need for constant calls or emails. 

2. Expertise in one place.

Dealerships are great at selling cars, but they can’t expect to become logistics professionals overnight to meet online buyer demands. Dealerships simply do not have the capacity to deliver cars similar to how Amazon Prime delivers packages. They do not have the drivers, relationships, technology, and overall operational capacity to become logistics companies. 3PL companies, on the other hand, do.

Like buyers, dealers too are purchasing cars all over the country to better meet local buyer preferences. Dealers often need to buy one or two cars at a time from auctions and other dealers, which can become problematic when they’re suddenly tasked with shipping individual cars from all over the country, outside of their usual local market. 3PLs offer the expertise and a single point of contact for all shipments instead of needing to independently contact, manage and pay each independent carrier. 

3. Home delivery is now expected.

Customer service has evolved from offering coffee in the lobby to delivering car purchases to someone’s home. Home delivery as a service is no longer a futuristic idea for dealerships—consumers now expect it. But selecting and managing auto transport companies to fulfill deliveries isn’t something dealers should want to manage, taking valuable time away from their business of buying and selling cars. For auto deliveries, it’s important that the transport company has proven customer service that supports delivering cars to someone’s home. They essentially become representatives for the dealership and its brand. If they aren’t on-time or do a shoddy job in front of the customer, guess whose Customer Satisfaction Index or Net Promoter Score will be impacted on top of losing a customer forever?

Economic forecasts indicate a busy Christmas and tax season for auto dealers. Transporting cars to the dealership and to a customer’s home should be a top priority for dealerships looking to maximize sales and retain future customers.

Did you enjoy this article from Dimitre Kirilov? Read more here.