Keeping It Fresh and Balanced

Keeping It Fresh and Balanced

By Matt Sarko,Transportation Broker, ALC Cleveland

Since the beginning of last year, the increase in the cost of freight has not only impacted the transportation industry but the economy as a whole. Transportation costs are now at an all-time high as drivers and trucks are currently in short supply.

Food prices rose 3.9% in 2020 and the U.S. Department of Agriculture anticipates another 2% to 3% increase for costs in 2021. The increase in transportation prices is primarily due to the shortage in drivers causing trucking companies to increase wages to attract more employees.

Additionally, the market is experiencing a shortage in semi-conductors, which is keeping new trucks from coming on the market and has since exacerbated the issue.  The increase in transportation costs only adds to the supply chain problems for growers, suppliers, and retailers as they are still experiencing the effects of congested ports as well as the winter storm, which both continue to have widespread impacts across the U.S.

Furthermore, the rise in the price of fuel is also a major contributor to the inflated freight costs. As a result of these supply chain complications, retailers have begun raising prices on a number of different goods in order to offset the shortages and transportation costs. “The rise in transportation prices affects everything from the farmer and the tractor, to the fertilizer and even the plastic hamper you put the product in.”

With the supply chain in disorder, we will continue to see a rise in the price of consumer goods. Moreover, the cost of transportation will ultimately affect the prices of publicly traded companies such as Bed Bath & Beyond and General Mills, considering they have alerted investors about these problems on their earnings call.

For transportation brokers like ourselves, taking advantage of the spot market whenever possible might be the best way to combat the losses taken on contractual year round rates as freight prices continue to rise, and to also keep important products, produce, and perishables moving across the country.


Matt began working fulltime for the Allen Lund Company in August of 2020 as a transportation broker for the Cleveland office. He originally started working his summer breaks during college as a broker’s assistant for the office. Matt joined the company with a degree in Finance from John Carroll University.