We all know about supply and demand. The price of fuel goes up when the refinery reserves dip below a certain number of day's supply. What about the prices for loads? Are they going down in some areas of the company because of too much competition? The economic theory of the effect of supply and demand on price basically says that in a free economy, supply and demand balance each other.
For instance, if only Company A provides a service or product to the market, Company A can charge as much as it wants. Limited supply = high prices. But what happens eventually is that someone figures out that they could capture market share by offering the same products and services as Company A at lower prices-- so they form Company B and begin competing for business. Supply gets bigger, prices go down.
Now, let's say that lots and lots of people have got into the same business as Company A. Now there is Company A, Company B, Company C... Company ZZZZ.
Since the market for whatever goods or services they provide is finite, the share of the total business "pie" gets smaller for each company. As they compete more aggressively for business, dropping price, each company makes less profit from their share of the "pie". Eventually, some companies are forced to sell out when their revenue no longer meets normal business expenses. Also, companies will sometimes sell out near the top of the business cycle, so they can maximize how much money they can get. When one company sells out to another in the same industry, this is called "Industry Consolidation".
Result: less supply-- so prices for the goods or serviced produced begin to go back up.
I'm wondering if we're seeing the beginning part of a cycle of increased consolidation in the auto transport industry. Look at Hadley getting bought. Penske Group. Now there are rumors that Swift is selling off their autohauling fleet.
The big boys have been re-shuffling things for the last couple years. Do they know something we don't?
Check out a random sampling of ads I found when I googled "Auto Transport Companies for Sale".