Executive Briefings

Rising Freight Costs Are Weighing on Companies’ Profits

A number of U.S. companies told investors that rising shipping costs in recent months have cut into earnings.

The Wall Street Journal reported in January that shippers are postponing deliveries or being forced to accept higher prices due to a nationwide truck shortage.

Increased demand, from retailers looking to restock after the holidays and from manufacturers, has made it harder for companies to book transportation, particularly on short notice. Prices have also risen due to bad weather, a new federal trucking safety rule and diesel prices that are around a three-year high.

In recent months, Prestige Brands Holdings Inc., which sells over-the-counter medicines, has had to hire additional trucking partners to ensure its products reach customers. The company said last week the higher freight and warehousing costs cut into its operating margin in its most-recent quarter, and it expects the trend to continue in the current quarter.

“We started to expand the number of freight carriers that we were using to make sure that we had the capacity needed,” Chief Executive Ron Lombardi told analysts on a conference call.

Read full article

The Wall Street Journal reported in January that shippers are postponing deliveries or being forced to accept higher prices due to a nationwide truck shortage.

Increased demand, from retailers looking to restock after the holidays and from manufacturers, has made it harder for companies to book transportation, particularly on short notice. Prices have also risen due to bad weather, a new federal trucking safety rule and diesel prices that are around a three-year high.

In recent months, Prestige Brands Holdings Inc., which sells over-the-counter medicines, has had to hire additional trucking partners to ensure its products reach customers. The company said last week the higher freight and warehousing costs cut into its operating margin in its most-recent quarter, and it expects the trend to continue in the current quarter.

“We started to expand the number of freight carriers that we were using to make sure that we had the capacity needed,” Chief Executive Ron Lombardi told analysts on a conference call.

Read full article