Soaring freight costs and labor shortages related to the pandemic have created another backlog at fresh produce companies and processed food facilities. Coupled with robust demand for grocery items, it has led to empty shelves at major retail supermarkets across the U.S.
Perishable produce growers on the West Coast have to pay almost triple the trucking rates that were seen before the pandemic to prevent highly perishable items like berries and lettuce from spoiling. Owyhee Produce CEO Shay Myers said that his company has been waiting to ship onions to his retail distributors until the cost of freight is lower.
Myers’ company grows asparagus and watermelon in addition to onions. He said that disruptions in the transportation system during the past three weeks have caused freight to double for produce. The disruptions have been due to severe weather and a lack of truck drivers. Meanwhile, pandemic prices have already been elevated.
“We typically will ship, East Coast to West Coast,” Myers said. “We used to do it for about $7,000. Today, it’s somewhere between $18,000 and $22,000.”
Conagra’s Birds Eye CEO Sean Connoly told his investors that the company’s U.S. plants might be lower for the next month, at least. The shortages are from employees who are absent because of Omicron illnesses. Birds Eye produces frozen vegetables.
Albertsons CEO Vivek Sankaran said he also expects challenges in the supply chain through the next six weeks.
Meanwhile, social media has seen an uptick of shoppers complaining about a lack of meat and pasta from Walmart supermarkets. In addition, a Palm Beach, Florida Publix was said to be running short of home hygiene products, while Costco was limiting toilet paper purchases at some of its Washington stores.
Katie Denis of Consumer Brands Associations said the shortages were due to labor scarcities. The packaged goods industry lacks about 120,000 workers. Meanwhile, only 1,500 of those jobs were filled last month.
Retailers as a whole in the U.S. currently have around 12 percent of their shelves out-of-stock on average. Some stores are seeing higher shortages, and problems are seen when the level reaches 15 percent. During normal times, the figure ranges from 7 to 10 percent.
SpartanNash said it had had a more challenging time getting items like soup and cereal. SpartanNash is a grocery distributor in the U.S.
Worldwide, other countries are experiencing similar issues. Woolworths Group in Australia said that over 20 percent of its workers at distribution centers have been out of work because of the pandemic. The virus has caused 10 percent of its employees to call in sick in its stores.
Adding to the problem in the U.S., ice storms and snow has caused traffic jams and shuttered traffic altogether in spots along the East Coast, hampering food deliveries headed for distribution centers and grocery stores. The delays have now rippled across the U.S. while produce has perished en route.