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IPFS News Link • Inflation

Slowdown in grocery inflation may be good news for trucking companies

• https://www.freightwaves.com, Rachel Premack

The biggest food brands have cooled it on price inflation. That's good news for consumers — and trucking companies.

Two freight brokers told FreightWaves that truckers have had to reorganize their routes to grocers in the past year due to reduced volumes, though they haven't experienced the fallout of business that other firms have grappled with:

Andrew Lynch, the president of Zipline Logistics, said food companies in his network are moving less freight. Demand is choppy; a shipper may want to send 12 pallets one week and then a full truckload the next week. However, he said his brokerage's volumes are up overall 20% year over year.

David Spencer, vice president of market intelligence at Arrive Logistics, said there hasn't been a "dramatic pullback" in consumers buying the necessities, like groceries. However, he's noticed some key grocery customers are more likely to ship products twice a week, whereas several years ago it may have been once a week. 

Food headed to restaurants or cafeterias requires less packing than food headed to grocery stores. The shift to grocery spending over eating out was great for trucking companies in the early months of the pandemic; Spencer estimated that a truckload of food headed to a restaurant requires four to five truckloads if headed to a grocery store — thanks to that hefty packing. However, as consumers have shifted their spend from grocery back to restaurants, trucking companies have less packaging to haul.

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