Tyson Foods President and CEO Tom Hayes says driver shortages and increased transportation costs are becoming more problematic for Tyson Foods and other companies, which in turn will affect consumers.
Hayes first touched on the transportation issues during the Tyson Foods quarterly earnings call on February 8, and he revisited the topic during an interview on CNBC on February 20.
Hayes told CNBC that freight costs are up about 12 percent, and it’s an issue that is “hitting the whole industry,” he said.
“Everyone’s going to have to deal with it in one form or another,” said Hayes. “The driver shortage is real, so getting transportation and getting goods to where they need to go is a real problem. Costs are going up.”
Referencing increased freight costs during the earnings call, Hayes said Tyson Foods was “in the middle of pricing for it,” but admitted it is not easy to do that.
“It’s something we have to do because it’s a cost. We got to pass it through,” he said. “And ultimately, the consumer is going to pay for it at some point.”
However, Hayes said one way companies can mitigate those higher freight costs passed on to the consumer is through adding value to its products, as well as through “brand building,” to make sure the consumers still feel good about the purchases they make.
Hayes added that woes with driver shortages and increased freight costs are not just limited to animal protein companies such as Tyson, but to all product-based businesses.
Hayes, who took over as CEO of Tyson Foods at the beginning of 2017, made his appearance on CNBC in advance of a presentation made later that day at the Consumer Analyst Group of New York (CAGNY) conference, which is held in Boca Raton, Florida.
Tyson Foods is the largest broiler company in the United States, as well as a leading processor of turkey, pork and beef products.