- Food suppliers are hiking up trucker wages and food prices as they struggle to find drivers, per the NY Post.
- One New York company said it had to hire truckers from Alabama and put them up in hotels in the Bronx.
- Chefs’ Warehouse told The Post that this was pushing up prices for oil, salt, and chocolate.
- See more stories on Insider’s business page.
Food suppliers desperately trying to find drivers to transport their goods are hiking up wages for truckers to as much as six figures – and some have to raise their food prices as a result, according to a report by The New York Post.
The head of an outsourcing company that hires truckers, called Regional Supplemental Services (RSS), said he gets “calls from desperate Fortune 500 companies every day that need to move perishable food.”
One company told the Post that as well as boosting trucker salaries, it had raised the price of meat by 20% and chocolate by 30% to cope with its slim margins.
Bronx-based food supplier Chefs’ Warehouse told the publication that over the past few months it had been hiring some truckers from Alabama and paying for them to stay at hotels in the Bronx because it couldn’t find any drivers in the area, despite offering wages of at least $20 an hour.
“Never in our wildest dreams did we imagine we’d be doing this – putting people up in hotels to work for us,” the company’s CEO Christopher Pappas told The Post.
Pappas said that the Chefs’ Warehouse, which supplies food for businesses including restaurants and hotels, had lost 40% of its drivers and warehouse workers during the pandemic. To plug the gap, the company hired truckers through outsourcing company RSS.
Other companies have been turning to RSS during the labor shortage, too, and it now expects its revenues to rise sevenfold in 2021.
“I get calls from desperate Fortune 500 companies every day that need to move perishable food,” Rich Jennings, RSS’ vice president, told The Post. “It’s most dire in the food industry right now.”
Wages are rising, and many drivers are moving among trucking companies for better salaries, Insider previously reported.
“I’ve never seen drivers get paid what they are paid today,” Jennings added. “They are getting well into the six figures and they can easily make $3,000 a week.”
A commercial driver’s license is “like a golden ticket right now,” he added.
Prices are rising because of the driver shortage
Moody’s analyst Mark Zandi told The Post that average producer prices for truck transportation were up 10% in April year-over-year – the strongest growth in a decade. Zandi said that this had big impacts on food products because transportation makes up a larger portion of their costs.
Pappas told The Post that Chefs’ Warehouse’s prices across its 55,000 products rose 7% on average in the first quarter of 2021. In a normal year, this would be between 2% and 3%, he said – and anything above this is “earth-shattering” because margins in the business are so low, Pappas said.
Chefs’ Warehouse’s biggest price hikes included a 54% increase for 35-pound tubs of canola and soybean fry oil, 30% for cases of kosher salt, chocolate, and olive oil, and 20% for meat.
A lack of truckers isn’t the only thing pushing up food prices for consumers. The current shipping crisis, as well as falling food production and a shortage of farm, retail, and hospitality workers, is causing retailers and restaurants to hike up the prices of foods like chicken wings and burritos.