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Cheerios maker General Mills blames regulators for truck shortage
来源： 编辑：编辑部 发布：2018/03/26 10:46:14
BREAKFAST cereal giant General Mills has cut its full-year profit outlook because of looming truck shortage, reports Bloomberg.
The maker of Cheerios suffered the worst plunge since mid-2015 after shipping costs slashed profits to their lowest in years.
New government regulations, restricting hours of work and spy-in-the-cab technology, were mainly to blame for higher costs brought about by the trucker shortage, said General Mills CEO Jeff Harmening.
Operational costs have also risen as the company grapples with an industry-wide grocery price war.
General Mills is the latest company to cite higher shipping costs as a big problem, joining Hershey, Tyson Foods, Kellogg’s and other packaged food suppliers.
E-commerce giant Amazon has been raising fees on some of its suppliers in a bid to protect margins, while Walmart has said that higher prices to move goods has weighed on margins.
Freight costs neared a 20-year high in February, General Mills said. The company has been forced into the spot market for 20 per cent of its shipments, compared with a historical average of five per cent. The costs on those orders can be 60 per cent higher.
The go-anywhere-anytime American trucker lifestyle has been legislated out of existence by federal regulators, who now ban working days that exceed fixed time limits, requiring fixed hours of rest.
To enforce this, unfunded mandates like electronic logging device (ELD) must be in every truck using federal highways.
The American Trucking Associations (ATA), representing major truckers, praised Congress for rejecting pleas to delay implementation of the ELDs.
Opposed are the Owner-Operator Independent Drivers Association, and 16 other trade groups who say it the hardware will cost them US$2 billion in compliance costs.
Big companies already use the spy-in-the-cab to police productivity, and see these devices, coupled with restrictive hours of work, as a way to cripple smaller operators from working harder to compete, and thus winning larger market share.
The battle to avoid ELDs has so far been lost at the agency level and in court. Whether the Trump Administration will reverse this remains to be seen given its promises to reduce regulation and control regulatory costs.
The maker of Cheerios suffered the worst plunge since mid-2015 after shipping costs slashed profits to their lowest in years.
New government regulations, restricting hours of work and spy-in-the-cab technology, were mainly to blame for higher costs brought about by the trucker shortage, said General Mills CEO Jeff Harmening.
Operational costs have also risen as the company grapples with an industry-wide grocery price war.
General Mills is the latest company to cite higher shipping costs as a big problem, joining Hershey, Tyson Foods, Kellogg’s and other packaged food suppliers.
E-commerce giant Amazon has been raising fees on some of its suppliers in a bid to protect margins, while Walmart has said that higher prices to move goods has weighed on margins.
Freight costs neared a 20-year high in February, General Mills said. The company has been forced into the spot market for 20 per cent of its shipments, compared with a historical average of five per cent. The costs on those orders can be 60 per cent higher.
The go-anywhere-anytime American trucker lifestyle has been legislated out of existence by federal regulators, who now ban working days that exceed fixed time limits, requiring fixed hours of rest.
To enforce this, unfunded mandates like electronic logging device (ELD) must be in every truck using federal highways.
The American Trucking Associations (ATA), representing major truckers, praised Congress for rejecting pleas to delay implementation of the ELDs.
Opposed are the Owner-Operator Independent Drivers Association, and 16 other trade groups who say it the hardware will cost them US$2 billion in compliance costs.
Big companies already use the spy-in-the-cab to police productivity, and see these devices, coupled with restrictive hours of work, as a way to cripple smaller operators from working harder to compete, and thus winning larger market share.
The battle to avoid ELDs has so far been lost at the agency level and in court. Whether the Trump Administration will reverse this remains to be seen given its promises to reduce regulation and control regulatory costs.