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Home » Disruptions, plant shutdowns weigh on food supply chain
Forward Thinking

Disruptions, plant shutdowns weigh on food supply chain

Study shows more than 10% drop in shipped loads over the past month across meat, dairy, alcohol, and pet food.

May 4, 2020
Supply Chain Quarterly Staff
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The supply chain impact of the Covid-19 pandemic is moving upstream, showing signs of wear on the food supply chain, according to data from logistics software provider FourKites, released May 1. A report from the company's Chief Technology Officer Vivek Vaid shows that food shipments declined more than 10% in the last month due to supply disruptions and plant shutdowns, with the brunt of the impact occurring in the meat processing industry.

FourKites analyzed aggregate load volume across the major food suppliers in the country, looking at four sectors: meat, dairy, alcohol, and pet food. The results offer a snapshot of what's happening across the food supply chain as a whole. 

"In aggregate, our data points to a 10-15% drop in shipped loads over the past month across meat, dairy, alcohol, and pet food," Vaid wrote May 1. "And while that is certainly a significant drop, it's not quite as precipitous as we expected."

Other results include: 

  • Total shipment volume across the major meat processing companies in the U.S. declined 17% during the week of April 13 compared to its peak the week of March 23.
  • Correspondingly, load cancelations for meat processing companies—or loads that were planned two to three weeks in advance but then canceled by the customer—reached an all-time high last week [the week of April 20], up 9% from the week of April 13 and up 22% month over month. "This is especially concerning for the industry and supply outlook," Vaid said.

Despite the challenges, Vaid said the meat distribution story remains "incredibly fluid," especially in light of the Trump administration's recent efforts to keep meat processing plants open. The President signed an executive order last week allowing the Secretary of Agriculture to invoke the Defense Production Act to keep plants running.

"If food producers bring workers in, we may see distributors and retailers increasing demand on carriers to keep up with escalating load volume," Vaid wrote. "It will inevitably be a local decision based on a multitude of factors, and we will keep close watch on how this story unfolds."

Data from other industry sectors, according to FourKites, includes: 

  • Load volumes across dairy, alcohol, and pet food are also down from their peak in early March, though they have each seen increased volume across the board in the month of April.
  • Alcohol, which saw declines from its peak in the week of March 30, saw a sharp increase this week [April 27]—up 28% from the week of 4/13.
  • The personal care and CPG industry has bounced back from its dip in load volume in mid-March, and rebounded strong in April, with load volume consistently higher than it's been at any other point this year.
Logistics Covid-19 Coverage
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