In the last few years, a “shipping revolution” has caused the food industry to prepackage food products at the factory, according to Jeffrey Tucker of Tucker Company Worldwide, a NJ-based logistics firm. Just the right amount of food is prepackaged for restaurant deliveries, and just the right amount is prepackaged for grocery stores. The system has worked very well to manage inventory and allow the industry to weather economic storms and not be left with excess goods.
Tucker says it’s been very efficient, until now.
This digitally-controlled distribution system has made it very difficult to quickly switch deliveries from restaurants and retail stores to grocery stores. That dilemma, combined with panic shopping, has resulted in empty supermarket shelves all across the country.
For example, chicken has been tough to find at many grocery stores. Last week Purdue Farms CEO Randy Day said on CNBC that he’s had to retool his plants to repackage chicken into Styrofoam and plastic supermarket trays, instead of the corrugated boxes used for restaurant supply. He estimated that it would take two to three weeks to meet grocers’ demand. (I can attest to that, as my local supermarket hasn’t had chicken for nearly a week.)
And in Pennsylvania, some short-sighted decision making by the state government almost caused our grocery shortage to get significantly worse. You may remember that one of the initial acts to combat the spread of the coronavirus was to close rest stops all along the Pennsylvania Turnpike. This decision was made at a time when truckers were needed the most, with many of them on the road for days or weeks at a time.
According to Tucker, “Pennsylvania got truckers so irate, it risked having them say ‘No’ to hauling freight to Pennsylvania.”
Fortunately the closure of rest areas was rescinded last week.