Holy “Carpocalypse,” Batman!

We are continuing to track some of the unique pandemic-related elements that are impacting global mobility programs and we kick things off in this post by taking a look at…the “Carpocalypse.” Heading into the summer months, which is typically the busiest season for moving and travel, demand for rental cars and car shipments has escalated and is creating situations that we have not seen, maybe ever.

What’s the story on rental cars?

This article from Real Simple helps to explain the "Carpocalypse" on the rental car side of things and even offers a few ideas for workarounds. (By the way, I used their Costco suggestion to find a reasonable rental car for an upcoming family vacation in San Diego...thank you very much! I need to look further into the option of Turo too!) Many are suggesting that securing a rental car is now the first thing you should be doing when arranging travel, particularly if you are heading to an outdoors-y, popular destination. Many rental car companies chose to sell off much of their unused inventory as travel evaporated due to the pandemic. One estimate was that one-third of the rental cars in the market previously were sold off. The article goes on to share that while airlines were bailed out by taxpayers (multiple times), rental agencies were not. Now, with travel surging, rental agencies are finding themselves with far fewer cars available to rent. To make matters worse, the current semiconductor chip shortage means it's taking longer for agencies to find new cars to replenish their fleets. That shortage means higher rental prices this summer and possibly beyond. Now, as demand intensifies (to the tune of a 498% increase since January), availability has decreased and pricing is surging. In some cases, where a car previously rented for $65 per day, it is now over $200 per day.

OK, and what’s the story on auto shipments?

When relocating, many employees need to ship cars to their new destination, and the vehicle relocation industry is also now facing a severe supply and demand challenge. Our Global Supply Chain team shared that as companies allow employees to move forward with relocations, the pent-up demand coupled with the number of rental and used cars needing to be moved due to shortages in those industries has the car carrier industry facing some unprecedented challenges that many are anticipating will get worse over the summer months. To add to the challenge, there is a shortage of drivers. Carriers are increasing rates throughout the U.S. in all move lanes by at least 35-40%. Relocation management companies (RMCs) and their partners are putting in place some protections to help keep extra costs to a minimum, but costs will still be higher when it comes to what is often considered a core benefit within most corporate relocation policies.