As suppliers struggle with bottlenecks, the food distribution company said it is having trouble keeping shelves stocked and paying higher transportation costs.
“Higher demand is pressuring our supply chain,” Chief Executive Officer Steven Spinner said on a conference call after reporting results late Wednesday for the fiscal third quarter. “A headwind from inbound freight expense” is likely to continue for at least the next six months.
The hurdles underscore the capacity constraints that are increasingly crimping the U.S. economy’s long expansion. REV Group Inc., which makes buses and ambulances, cited “the availability of chassis” as a reason for weak second-quarter results. Oil producers have reported dwindling pipeline space, and a rail and trucker shortage that’s eating into profit as shipping costs increase.
That’s probably why General Mills got murdered on the last quarterly report when they mentioned about higher costs of transportation and raw material that were making production more expensive in general.