Regular trucking and reefer spot market prices have skyrocketed since June 2020, with current prices sitting at record-high levels. Data provided by DAT Freight & Analytics, which operates the industry’s largest truckload data analytics service and load board network, clearly show how both contract and spot rates are currently sitting at record-high levels. Further, DAT’s load-to-truck ratio, which is the measurement of load posts relative to truck posts, suggests a shortage of reefer trucks available within the U.S. Further, employment in the truck transportation sector has not recovered to prepandemic levels.
For now, we don’t suspect freight and logistics costs will ease in the near to medium term. As we have mentioned in previous reports, we expected foodservice recovery to impact the industry in a shock-like fashion. In other words, we expected rapid increases in overall price levels, or temporary price inflation, whether these were due to increased transportation costs or to pent-up demand.
On the topic of inflation, and as shown in previous reports, protein prices to the consumer rose in 2020. Some proteins also saw price increases at the wholesale level despite dealing with significantly contracted sectors such as foodservice, accommodations, entertainment, etc. Early in Q1, however, we saw modest protein price increases in industries that did not see wholesale prices rise in 2020, like chicken, salmon, and shrimp. Then, from early March through mid to late April, price increases accelerated at an unprecedented rate. These price increases suggest that foodservice demand strengthened earlier and more robustly than anticipated. Restaurant sales in March surpassed our previous best-case scenarios, which was reflected in wholesale prices rising more than expected and out of seasonal patterns. It could also suggest that, at least for the quoted items on a delivered basis, increased transportation and logistics costs started to be passed along the distribution chain.