As Economy Heats Up, Truck Driver Shortage Burns More Companies
A strengthening economy has its downsides. Just ask United Natural Foods Inc.
As suppliers struggle with bottlenecks, the food distribution company said it is having trouble keeping shelves stocked and paying higher transportation costs.
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鈥淗igher demand is pressuring our supply chain,鈥 CEO Steven Spinner said on a conference call after reporting results June 6 for the fiscal third quarter.
鈥淎 headwind from inbound freight expense鈥 is likely to continue for at least the next six months.
搁贰尝础罢贰顿:听Analysis -听The US is running out of truckers
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The hurdles underscore the capacity constraints that are increasingly crimping the U.S. economy鈥檚 long expansion. REV Group Inc., which makes buses and ambulances, cited 鈥渢he availability of chassis鈥 as a reason for weak second-quarter results. Oil producers have reported dwindling pipeline space, and a rail and trucker shortage that鈥檚 eating into profit as shipping costs increase.
United Natural Foods fell 13% to $40.10 at 2:59 p.m. on the distribution concerns, as well as weak margins, accounting changes and other issues. That was the biggest intraday decline in almost a year. REV Group was poised for a record decline at the close, down 19% to $14.49.
Economic growth has raised demand for transportation and led to a shortfall in drivers. Recent estimates from FTR Transportation Intelligence found that the United States has about 280,000 fewer truckers than it needs. The Institute for Supply Management cited 鈥渟tockouts and shortages鈥 in a report this week showing that U.S. service industries expanded in May at a faster pace than forecast.
鈥淚t鈥檚 a capacity issue as it relates to gearing up for the business demand,鈥 Anthony Nieves, chairman of the ISM nonmanufacturing survey committee, said on a conference call.
