Food Companies Experience High Cost of Moving Product

Rising freight costs, fuel costs and lack of drivers contribute to hurt profits.

Coca Cola Truck

Lack of drivers, high fuel cost and rising freight costs are all contributing to U.S. food companies lowering profits. These factors are making it increasingly more difficult and expensive to transport products to stores.

An increase in truck rates implies a 15 basis point gross margin for U.S. food companies. Freight usually accounts for 5 percent of costs of goods sold.

J.M. Smucker and Campbell both warned that freight issues would hit margins. Shippers are starting to have limited flexibility to move shipments based on truck availability, creating an increase on market rates.

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