Freight industry executives expect a squeeze on trucking capacity that has been driving up shipping costs for U.S. companies to persist through the rest of the year, as strong demand in a rebounding American economy collides with a shortfall in truck availability. “There’s more freight than trucks, or maybe I should say, than drivers,” David Menzel, chief operating officer at freight broker Echo Global Logistics Inc., said in an earnings call Wednesday. “The ports are backlogged, demand is strong, so rates are high. On the other hand, shippers are dealing with high rates, tight capacity and disrupted supply chains.”
Manufacturers and retailers including General Mills Inc., Rubbermaid-owner Newell Brands Inc. and Bed Bath & Beyond Inc. have pointed in recent quarterly earnings reports to rising transport costs and tight capacity as operational hurdles as they seek to restock inventories and meet strong consumer demand.
“We continue to be operating in a very disruptive environment because of container shortages coming from Asia, port congestion, trucking shortages,” Chris Peterson, finance chief and business operations president of Newell, whose portfolio includes Sharpie pens and outdoor brand Coleman, said in a Friday earnings call.
“We do expect it to be a difficult supply operating environment for the rest of the year,” Mr. Peterson said.
Operators say the shortfall could deepen if cargo volumes remain high without a pause before the busy holiday shipping peak.
“The network itself is just so fragile right now,” Bob Biesterfeld, chief executive of C.H. Robinson Worldwide Inc., the largest freight broker in North America, said in an interview. If there are more disruptions like the severe weather that roiled supply chains in the first quarter, “we could see some pretty chaotic overall truckload freight markets.”
The most recent Cass Information Systems Inc. seasonally adjusted index for U.S. freight demand rose 3.4% from February to March while the separate measure for freight expenditures rose nearly twice as fast, at 6.5%, signaling rapid growth in shipping costs.