An analysis by FourKites and commentary from Glenn Koepke, GM of Network Collaboration at FourKites
“The trend we’ve seen in recent weeks follows a very similar pattern to what happened a year ago. Typically, in the Food & Beverage (F&B) category, we see volume bottoming out around the first week of January and then steadily rising over the first quarter, hitting its ceiling in April and May as retailers build up inventory for the peak summer months. Certain subcategories may have slightly different peak periods, but generally, with food products, this is a very common trajectory and we anticipate it staying consistent in 2023.
From a beverage standpoint, the market still remains very competitive for shelf space, new products, and promotions. Super Bowl (the American football sporting event which takes place on 13 February) week is always a key sales milestone early in Q1 and we have seen beverage companies ramp volume to retailers and stores to prepare for this high-volume weekend.
Freight market conditions have softened tremendously since a year ago. The spot freight market was running wild 12 months ago and that has changed significantly. Now, spot rates are sometimes below contracted rates, capacity is readily available and there is a very competitive market of carriers and brokers fighting for business.
Forecasts and predictions are that this softened market will remain, which helps shippers get product out of their distribution centers at a much cheaper price – we’ll see fewer concerns about supply chain costs being reported by CEOs and CFOs in Q1 and Q2 of 2023.”
- 28-day average over-the-road (OTR) shipment volume in the Food & Beverage (F&B) industry increased by 1.8% year-over-year as of January 25, 2023, while CPG (consumer packaged goods) has fallen by 3.3%.
- Within the F&B category, the 28-day average OTR shipment volumes of Alcoholic & Bottled Beverages and Meat, Produce & Dairy subsegments increased by 8.7% and 7%, respectively, from the previous year.
- In 2022, FourKites saw particularly strong performance in beverage manufacturing, where the 28-day average OTR shipment volume increased by 8% year-over-year at its peak in late August. Meanwhile, the 28-day average OTR shipment volume of Food Manufacturing and Retail during its usual seasonal highs in late November was down by 4% year-over-year.
- Overall, F&B has not yet fully recovered from the post-holiday downturn, as the 28-day average OTR shipment volumes as of January 25, 2023, have decreased by 1.4% month-over-month.
- However, shipments of beverages have been on the rise since reaching lows in late December. As of January 25, OTR shipment volumes of beverages have risen by 12.7% in the past 30 days.
- Meat, Produce & Dairy shipments have remained relatively stable, with a 0.5% increase in shipment volume from the previous month.
- OTR Shipment volumes in Food Distribution / Retail and Packaged Foods are still down from the holidays, with decreases of 4.2% and 2.0% month-over-month, respectively, as of January 25.
- Between August to October of 2022, FourKites saw a spike in delays for OTR shipments in produce and dairy, where the 28-day average percentage of delayed loads rose to above 34% in early August. On the other hand, incidences of delays in OTR shipments of packaged foods fell steadily in 2022. In other subsegments of Food & Beverage, the percentage of delayed loads has remained relatively steady, with shipments in meat, produce, and dairy having higher rates of delays on average compared to beverages and food distribution/retail.