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The reason shipping costs are skyrocketing

The reason shipping costs are skyrocketing
Nathaniel Meyersohn May 14, 2018

The biggest companies in America face the same dilemma: A truck driver shortage is squeezing profits.

Hasbro (HAS), Kellogg (K), Mondelez (MDLZ), Coke (KO), and Monster (MNST) have told Wall Street in recent weeks that higher freight and shipping expenses are eating into their profit margins. Rising costs will force them to absorb the hit or raise prices.

For these companies and hundreds of others, it's getting more expensive to move goods around the country because qualified truckers are in short supply in a tight labor market.

"There are more attractive options out there for potential truck drivers in a strong economy," said Gus Faucher, chief economist for PNC Financial. "It's difficult to find new workers to expand."

Trucking is a vital link in the supply chain. It's how Coke gets its sodas to grocery stores and how Hasbro sends toys to Amazon and Walmart distribution centers.