Truck spot rates (UTZ)
Spot rates for trucking generally decline in January compared to December after the holiday season rush. According to DAT, the last time spot rates increased in January was in 2018. Spot rates for the week of January 10-16 were $3.13 per mile, up 4.7% from December and up 33% YOY. Loads moved on DAT’s freight network increased 35% for dry van and 17% for refrigerated loads for the week.
The Federal Motor Carrier Safety Administration (FMCSA) is preparing to launch a pilot program for 18 to 20-year-olds to become truck drivers. Currently, a truck driver has to be 21 years old. The program was created as part of the infrastructure bill enacted in November. The trial program will accept up to 3,000 apprentices at one time. The drivers have a number of limitations and will have probationary periods of 120 hours and 280 hours with an experienced driver in the passenger seat. The American Trucking Association which supports the program estimates the U.S. needs more than 80,000 drivers. The training and probationary period require a labor investment from the trucking companies. With 3,000 apprentices the program will not be the solution, but it could make a contribution over time. Higher truck rates have been a leading inflationary pressure for many CPG companies. Companies with lower value to container have more exposure to truck rates, but nearly everything in CPG rides on a truck.
Double-digit year for wine (VWE)
Domestic wine sales, including bulk imports increased more than 10% in 2021 to $51.3B according to bw166. Sales in the month of December grew 10% to nearly $5B. Off-premise sales in December decreased 4% YOY while the year decreased 5% according to Nielsen. DTC sales grew 2% in the month of December and 13% in 2021. Vintage Wine Estate’s sales mix is differentiated from most wine companies by having roughly a third each in B2B, DTC, and wholesale.
Wine helps prevent COVID-19 (NAPA)
Researchers at Shenzhen Kangning Hospital and Southwest Hospital conducted a survey on COVID-19 risk and found that red wine drinkers had a lower chance of contracting COVID-19. The study analyzed 473,957 subjects from the U.K. People who consumed red wine between one to more than five glasses a week had a 10 to 17% lower chance of contracting COVID-19. Even low wine consumption had a statistical benefit with one to two glasses consumed per week being associated with a 12% lower risk of contracting COVID-19. Beer drinkers on the other hand had a 7 to 28% higher probability of contracting COVID-19 regardless of how much they consumed compared to non-drinkers. At this point in the pandemic, it is unlikely to change behavior in wine or beer consumption. However, the wine industry has been successful in promoting the idea of wine consumption as part of a healthy lifestyle.
