Chipotle customers are reporting ingredient shortages as the chain says it is facing high beef and shipping costs

Chipotle
  • Customers say Chipotle locations are out of key ingredients like rice and steak.
  • Chipotle says it is facing high beef and freight costs, but there is no system-wide shortage.
  • Taco Bell, Starbucks, and other chains are also dealing with shortages.
  • See more stories on Insider’s business page.

Some Chipotle locations are running out of key ingredients, according to customers posting online.

While there is no official messaging from Chipotle, customers say that they’ve visited locations that were out of vegetables, guacamole, steak, rice, and even tortillas.

“We aren’t experiencing any supply issues throughout the network, however, occasionally there are spot outages at individual restaurants,” a spokesperson told Insider.

“We are challenged by several industry-wide issues, most notably beef and freight costs, as well as staffing shortages at our suppliers.”

Chipotle locations dealt with shortages earlier in July during a free entree deal. Five Chipotle employees from four states told Insider about running out of ingredients including lettuce, sour cream, cilantro, brown rice, steak, vegetables, corn, and guacamole.

In June, Reuters reported on a New Jersey Chipotle that was out of barbacoa and carnitas during a weekday lunch rush. A nearby location had both ingredients, and Chipotle told Reuters that these were not a reflection of overall supply chain problems.

Read more: How much should you be paid? Browse more than 250,000 salaries from 250 of the country’s largest firms

The entire restaurant industry is facing supply chain issues, causing shortages and impacting customers. Taco Bell is telling customers that it doesn’t have several ingredients, and posts on social media called out shortages of staple ingredients including chicken, beef, and several different types of taco shells. The chain told Insider shortages were due to “national transportation delays,” that are impacting the entire industry.

In June, Starbucks shared an internal memo that the chain was putting 25 items on temporary hold due to supply chain issues. Some stores have displayed signs that say “we are currently experiencing temporary outages of some of our food and beverage items.” These signs were officially distributed from Starbucks corporate to individual stores, a spokesperson previously confirmed to Insider.

Shortages and price hikes are affecting the entire retail sector. Bikes, cars, meat, cheese, and even ketchup are all becoming more expensive, in part thanks to disruptions to the global supply chain from COVID-19, plus a shipping container shortage and port congestion. These factors created what experts called a “perfect storm” in global transportation.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.

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Walmart, Target, and Amazon are among the biggest corporate polluters thanks to overseas shipping

AP120630164321
The Exxon Valdez is one of thousands of ships dismantled at the Alang ship-breaking yard in western Indian state of Gujarat, India.

  • A new study measures the climate pollution retailers emit from overseas shipping.
  • Retail giants Walmart, Target, Ikea, and Amazon are among the top 10 maritime polluters.
  • Walmart generates more greenhouse gas than a coal plant would in a year, The Verge first reported.
  • See more stories on Insider’s business page.

A new report from Pacific Environment and Stand.earth reveals 15 major corporations that emit as much climate pollution from overseas shipping as 1.5 million American homes.

Retail giants Walmart, Target, Home Depot, Ikea, Amazon, and Nike are among the worst polluters, according to the report. Walmart tops the list, generating more greenhouse gas than a coal plant would in a year, The Verge first reported.

“There really hadn’t been an investigation into this pillar of companies’ emissions portfolio,” Madeline Rose, primary author of the report, told The Verge. “Quite frankly, with the climate emergency on our doorstep, we just feel like there needs to be disruption of the data system and there needs to be greater transparency.”

15 retailers maritime pollution

Right now, Americans are buying so many imported goods that shipping companies are racing to build more boats and brands are paying ten times typical shipping prices, Insider reported in July.

The study measures greenhouse gas emissions and air pollution released by the 15 retailers while importing goods overseas to the US.

To calculate the final rankings, researchers tracked cargo ships used by each company as a way of estimating fuel consumption and emissions. The results do not include the cargo ships’ return, meaning the pollution is probably even more severe than the study found.

In 2019, Ikea announced an ambitious plan for the company to become “climate positive” – meaning it would reduce more pollution than it creates – by 2030. According to the study, shipping from the world’s largest furniture retailer is the seventh-biggest polluter, a ranking worse than Amazon’s.

Last year, Walmart said it will eliminate its carbon footprint by 2040. This goal does not encompass Walmart’s entire supply chain, and therefore does not calculate emissions released by overseas shipping.

Similarly, Amazon has pledged to be net-zero carbon across its business by 2040. An Amazon spokesperson told Insider that the company includes indirect emissions such as cargo shipping into its carbon footprint calculations, which are published online.

Target’s sustainability goals do take its entire supply chain into account – the company also aims to be net-zero by 2040.

“Major retail companies are directly responsible for the dirty air that sickens our youth with asthma, leads to thousands of premature deaths a year in U.S. port communities, and adds to the climate emergency,” Rose said in a statement. “We are demanding that these practices change.”

Walmart, Target, Ikea, and Amazon did not respond to Insider’s request for comment.

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The global shipping crisis and labor shortages may get worse because of the slow vaccine rollout for seafarers, say experts

Container ship
Slow vaccine rollouts for seafarers risks worsening the existing worldwide shipping crisis.

  • A slow rollout of COVID-19 for seafarers risks worsening a worldwide shipping crisis.
  • Infections on vessels are rising, which could further harm already strained global supply chains.
  • Shipping experts warn of delays and a tightened labor pool leading up to Christmas.
  • See more stories on Insider’s business page.

A slow rollout of COVID-19 vaccinations for seafarers is proving problematic for the beleaguered shipping industry, according to experts.

When outbreaks occur on ships it can endanger marine works and cause further disruption to trade, Bloomberg reported.

Despite efforts to vaccinate seafarers in ports, most are still largely dependent on their home countries to be vaccinated – and more than half of the 1.6 million maritime workers globally come from developing countries such as India, the Philippines, or Indonesia, the outlet reported.

ICS estimates only 35,000-40,000 seafarers are vaccinated – 2.5% of the global pool of maritime workers.

“Supply chains are already stretched from a robust bounce back in consumer demand, semiconductor shortages, and shipping difficulties such as the Suez Canal blockage and Chinese port closures,” Tom Fairbairn, a shipping expert, told Insider.

According to the WHO, more than 80% of global trade by volume is moved by maritime transport. The global economy depends on the world’s two million seafarers who operate the global fleet of merchant ships.

Illness and economic hardship remain a serious problem for these workers amid the pandemic.

A new report by Thetius and sponsored by Inmarsat discussed the future of seafaring, as well as the current problems. It stated: “2020 showed the collective ineffectiveness of the entire shipping industry, including charities, corporates, unions, and even international bodies such as the IMO, to act as a voice for the needs of seafarers during a crisis.”

It added: “Governments around the world have repeatedly failed to act on the crew change crisis, which still exists at the time of writing.”

In May, a seafarer died and several medical workers in Indonesia were ill with the delta variant of COVID-19 after a ship with an infected Filipino crew docked in Central Java on April 25. Around the same time, the shipping industry endured more chaos after an outbreak at one of China’s busiest ports in the province of Guangdong triggered a backlog of shipments at four major ports.

Situations like this are worsening the existing worldwide shipping crisis, which has raised costs and led to shortages of many products, from chicken to semiconductors, as a result of the pandemic, Insider’s Rachel Premack reported.

In an interview with Bloomberg, Esben Poulsson, chairman of the International Chamber of Shipping (ICS), which acts for shipowners said: “With this new delta strain, there’s no doubt it’s setting us back and the situation is getting worse. Demand for products isn’t letting up, crew changes aren’t happening fast enough and governments continue to stick their heads in the sand.”

The forecast growth in the world merchant fleet over the next decade, and its anticipated demand for seafarers, will likely continue the trend of a shortage in the supply of officers, according to the ICS.

This is why Fairbairn warns: “Those down the supply chain must be prepared for further disruption in the critical run-up to Christmas.”

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Fast food has gotten way more expensive in the last year

McDonald's
  • Fast food prices are rising across the industry.
  • Dunkin’, McDonald’s, and Taco Bell have seen the biggest increases, according to analysts.
  • Shipping issues, labor shortages, and weather events all contribute to rising prices.
  • See more stories on Insider’s business page.

Prices at fast-food chains will continue to rise as ingredients and labor grow more expensive.

Chipotle raised prices across the menu by about 4% in June, a move the company says was prompted by increased wages for workers.

The average Chipotle meal will cost 30 to 40 cents more than it did before, and a spokesperson told Insider that the price hike will compensate for the recent wage increases for workers. In April, the fast-casual chain said it would raise average hourly wages to $15 per hour by the end of June, an increase of $2 over the $13 an hour average pay.

Nearly every fast food and fast-casual chain will likely follow, according to analysts at Gordon Haskett in a report released Thursday.

Read more: Kraft Heinz employees and analysts say 3G Capital’s cost-cutting business strategy is setting it up for failure. Here’s how the private equity firm’s playbook left it playing catchup to its rivals.

Analysts looked at 24 restaurant chains over the span of a year and found 17 of them are currently running price increases, and price increases, on the whole, are growing in both size and frequency. Quick service restaurants have seen the largest increases, averaging 6% compared to 3% at fast-casual and 1% in casual chains. Most of these increases have been implemented since March 2021.

Based on Gordon Haskett analysis, the greatest price increases have been 10% at Taco Bell, 8% at McDonald’s, and 8% at Dunkin’, follow by Chipotle and The Cheesecake Factory. Exact prices vary by market. Applebee’s, Papa John’s, Red Robin, and a few others have not adopted any price increases over the past year.

Labor costs are partially the cause of these rising prices. A truck driver shortage is making transportation more expensive, while restaurants, grocery stores, and factories are all struggling to keep fully staffed. Processing plants and farms are facing the same problems, for example, chicken farms don’t have enough employees, so they’re struggling to process birds quickly.

Labor costs might have increased for restaurants over the last year, but so did the price of ingredients. US consumer prices hit their highest level in 13 years in May, increasing 5% over the previous year. Staple Chipotle items, like corn and avocados, grew more expensive this year as demand rose and shipping delays drove prices further up. Experts say rising food costs are a combination of growing demand as consumers increase spending and supply chain struggles. Shipping delays and severe weather events have made crucial commodities more expensive and difficult to obtain.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.

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FedEx slumps as the carrier beats earnings estimates but says costs tied to increased shipping demand and labor are soaring

FedEx
Boxes containing the Moderna COVID-19 vaccine are loaded into a truck for shipping at the McKesson distribution center in Olive Branch, Miss., Sunday, Dec. 20, 2020.

FedEx fell on Friday by as much as 5.6% after its latest earnings report revealed labor and logistical pressures eating away at margins, even as the company slightly beat analyst earnings expectations.

The stock slid as the market opened on Friday, immediately falling by over 3%. It continued to fall to an intraday low of $286.52 before paring some losses.

The US labor shortage has cost the courier on wages and shipping efficiency, pushing up labor costs and depressing on-time shipping rates. In response, FedEx said it would boost capex by 20% and open 16 new facilities by the end of the year. In spite of the reopening pressures, the company’s sales rose 30% in the fourth quarter of 2020, as delivery demand remained sturdy.

Thursday’s reported earnings came in just cents above expectations, leading some analysts – who had become accustomed to consistent overperformance – to describe the results as a disappointment.

FedEx CEO Fred Smith expressed optimism for future quarters, saying that continued strong sales in conjunction with ongoing investments in the firm’s delivery network would soon result in better margins.

Shares of FedEx were trading at $291.46 at 2:08 p.m. ET, down 3.79%.

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Yes, Amazon delivers on Sunday – but not everywhere

amazon boxes packages delivery
If you live in the right location, Amazon will deliver to you on Sundays.

  • Yes, Amazon does make deliveries on Sunday – but not everywhere in the United States.
  • If Amazon delivers on Sunday in your area, you’ll likely see it as a shipping option when you order something.
  • You can also contact UPS or USPS directly for more information, since they handle Amazon’s Sunday deliveries.
  • Visit Insider’s Tech Reference library for more stories.

Amazon has become one of the biggest companies in the world by offering quick shipping nearly everywhere in the country. And in most places, “quick” even means delivering on Sundays.

Yes, Amazon delivers on Sunday

Unlike traditional mail, Amazon makes package deliveries every day of the week, Sunday included. These Sunday deliveries are available to all customers where the service is available, regardless of Amazon Prime membership.

If you choose to have your package delivered to an Amazon Locker, there’s a chance that it’ll be delivered there on Sunday too.

Amazon does this by partnering with UPS and the United States Postal Service. UPS and USPS both receive packages from Amazon, and then make the “last mile” delivery to your doorstep. But don’t expect them to deliver any other kinds of packages – Amazon is the only company that they deliver on Sunday for (aside from the occasional USPS Priority mail).

UPS driver
Amazon outsources many of its deliveries to companies like UPS and USPS.

However, there are some restrictions.

Sunday deliveries aren’t available in all areas

UPS and USPS only launched Sunday delivery a few years ago, and it still isn’t available everywhere in the United States. This means that if you live in certain areas – especially more rural areas – Sunday delivery won’t be an option for you.

Amazon doesn’t keep a public list of areas with Sunday delivery; when asked for comment, an Amazon spokesperson simply said it’s available in areas where their “delivery partner and carrier network supports Sunday delivery service.”

Amazon delivery
As time goes on, more cities will support Sunday deliveries.

If you go to checkout with an order and then see “Sunday” as an option under Review items and shipping, it’s definitely available in your area.

But the surefire way to find out if you’re living in the right area for Sunday deliveries is to call UPS and USPS directly. If you connect to a representative and give them your address, they should be able to tell you if your address is eligible for Sunday deliveries.

The best ways to contact Amazon for help when you have a problem with your accountHow to report a missing package on Amazon with the online retailer or a third-party sellerHow to easily reorder items you’ve bought on Amazon in 2 waysHow to change your Amazon account password or reset it if you’ve forgotten it

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Boat sales are up, and owners say they’re getting harder to rent and repair

Person dancing on charter yacht
Yacht sales are up.

  • Boat prices are up 10% this year as demand increases.
  • Demand shot up during the pandemic as boats were viewed as a safe way to spend time outside.
  • The same shipping industry woes are to blame for shortages on other goods like lumber and furniture.
  • See more stories on Insider’s business page.

Boats are becoming more expensive and harder to find across the US, from small vessels to large yachts.

Boat prices are up, and customers are left waiting months longer than anticipated for their purchases. In Michigan, which is a hub for boaters due to the surrounding Great Lakes, one dealership is displaying signs warning would-be customers to “Buy now before they are gone,” WXYZ Detroit reported.

The state’s largest pontoon dealer has only one new pontoon for sale, and the sales manager spoke of “inventory shortages” to WXYZ. The dealership is also promoting trade-ins and “cash for boats,” similar to the run on used cars going on that has increased prices at the fastest ever rates. Boat prices have risen about 10% over the last year, the sales manager said.

For customers looking to buy new, wait times start at three to even six months, or longer for specialty or unusual orders.

Even the rich aren’t immune to shortages as yachts in particular become harder to find. “People just aren’t putting their boats up for sale,” Charles Corbbishley of RCR Yachts told Rochester First. He says buyers for new boats are on wait lists that go through 2023.

Like many shortages going on right now, a few causes converged to make boat buying difficult. Boating saw a rise in demand at the beginning of the pandemic that has continued since, The New York Times reported. In 2020, people increasingly spent their money socially distant activities that felt safe, like furniture upgrades and even new homes. Boats are similarly a way for people to enjoy the outdoors and spend time with family without interacting too closely with strangers.

Along with new demand, boaters faced all the same supply chain disruptions that shocked the rest of the global market. As Rachel Premack explained for Insider, some factories shut down in the early days of the pandemic, slowing production of nearly everything. Then came a shipping container shortage, making logistics even more complicated. Port congestion and Texas storms earlier this year only made things worse.

Getting a boat is hard, and keeping it in good shape isn’t any easier. Parts for maintenance and repairs are impacted by the same shortages as boats themselves.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.

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We may be underestimating just how much the shipping crisis will raise prices of consumer goods, a leading economist says

Port of New York and New Jersey visit
High shipping costs are spurring shortages of products ranging from semiconductors and fireworks to chicken and Starbucks drinks.

  • Rising shipping costs could make Starbucks drinks, fireworks, and lumber harder to come by.
  • The impact of this on product prices could be underestimated, an economist told Bloomberg.
  • Some companies are already hiking up the prices of goods like burritos and groceries.
  • See more stories on Insider’s business page.

People might not be aware of the full impact the current shipping crisis will have on higher prices for consumer goods, a leading economist told Bloomberg.

Even if companies pass the cost of rising shipping fares straight to customers, this will only have a slight effect on headline inflation – but its full impact might be being overlooked, Volker Wieland, economics professor at Frankfurt’s Goethe University in Frankfurt and a member of the German government’s council of economic advisers, said.

“Even if the order of magnitude is smaller than estimated, the dynamic builds over a year and has significant effects,” he told Bloomberg.

“That means there’s a danger we’re underestimating the impact.”

Read more: Experts identify 4 logistics winners after $1 trillion of online spending during the pandemic – and 3 losers that missed out

A shortage of workers, lack of shipping containers, and massive port traffic jams caused by growing demand for imported goods are all causing shipping costs to soar, Insider’s Rachel Premack reported. According to the Drewry World Container Index, shipping containers cost nearly four times as much as they did this time last year.

Ports face other problems, too. Authorities introduced stricter COVID-19 measures after a recent coronavirus outbreak in Guangdong, South China, causing congestion at four major ports.

The shipping problems, in turn, are spurring shortages of products ranging from semiconductors and fireworks to chicken and Starbucks drinks. Prices hikes could follow, too, as some companies, including Costco and Chipotle, have already warned that they may pass some of the the higher freights costs to their customers, while analysts told Bloomberg that the prices of low-cost and bulky goods, like toys and cheap furniture, could soar in the coming months.

The shipping crisis means that customers could also have less access to international products, too.

Jordi Espin, strategic relations manager at the European Shippers’ Council, told Bloomberg that olive growers in Europe could no longer afford to export to the US.

And Europe has stopped most anchovy imports from Peru because they’re no longer competitive compared to local products, he said.

HSBC trade economist Shanella Rajanayagam told Bloomberg that he expects consumer demand to shift from goods to services as the global economies reopens.

But Rajanayagam warned that the higher shipping costs could stay post-pandemic, and that producers could become more willing to pass these higher costs on to consumers.

Insider’s Kate Duffy reported that the shipping disruptions could lead to a shortage of goods for the holiday season.

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Home Depot has contracted its own container ship, trying to sidestep a global shipping crisis that threatens to disrupt holiday orders

home depot customer shopper washing machines
  • Home Depot has contracted its own container ship to bring its products to the US.
  • Home Depot is among many retailers hit by a global shipping crisis that has led to delays and rising prices.
  • Experts say holiday season shopping may be disrupted by limited stock and higher prices.
  • See more stories on Insider’s business page.

Home Depot, hoping to sidestep a global shipping crisis, has contracted its own ship to transport its goods.

The home-improvement store is one of many retailers grappling with shipping delays and rising costs caused by supply-chain problems. According to data from the Journal of Commerce, cited by CNBC, Home Depot is the third-largest importer by sea freight in the US.

“We have a ship that’s solely going to be ours,” Home Depot president and COO Ted Decker said in an interview with CNBC. “It’s just going to go back and forth with 100% dedicated to Home Depot.”

A breakdown in the freight supply chain, created by falling demand in the first half of 2020 followed by a surge at the end of the year, has led to delays, port traffic jams, and blockages. A lack of containers and dock workers is making this worse.

For retailers, this means a risk of low stock, especially as we approach the holiday season.

“Right now, they are all trying to figure out ‘How do we mitigate that risk to make sure that we’ve got the product here in time for when those holiday season sales start?'” Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, told CNBC.

“That could mean moving up timing for when you bring your product in, which could further lead to additional congestion and delays,” he said.

Experts say that this crisis will also lead to higher costs for customers, as retailers hike the prices to recoup the cost of shipping, which in some cases is ten times more than before the pandemic.

Clorox, Coca-Cola, Procter & Gamble, and General Mills are among major brands to have announced recent price hikes.

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Cheap furniture and toys could soon get much more expensive as retailers are hit by rising shipping costs

Ikea
Cheap furniture makers and sellers such as Wayfair or Ikea could be impacted.

  • Bulky or low-cost items could be hardest hit by price hikes as shipping costs continue to rise.
  • This could include toys and furniture, experts told Bloomberg.
  • Retailers are spending up to ten times more than they would have pre-pandemic to ship items across the ocean.
  • See more stories on Insider’s business page.

Toys and cheap furniture are among consumer goods that could get more expensive in the coming months as retailers continue to grapple with surging shipping costs.

According to experts quoted in a Bloomberg report, low-cost and bulky goods are more vulnerable to price hikes: They take up more room on a shipping container and have thinner margins to absorb rising costs.

Gary Grant, founder of UK toy shop The Entertainer, told Bloomberg that in his 40 years in the industry he has “never known such challenging conditions from the point of view of pricing.”

Grant said that The Entertainer has had to stop selling some items, including a giant teddy bear imported from China, because it would have to double the price for shoppers to make up for higher freight costs.

“If they are bulky products it means you can’t get very many in the container and that will have a significant impact on the landed price of the goods,” he told Bloomberg.

Low-cost furniture makers and sellers such as Wayfair or Ikea could also be hit.

Alan Murphy, the CEO of a consultancy company in Copenhagen called Sea-Intelligence, said that the cost of shipping is now making up about 62% of the retail value of some items sold by low-cost furniture makers.

“You simply can’t survive on this,” he told Bloomberg. “Someone is bleeding very hard.”

The shipping crisis is causing some retailers to spend as much as ten times more than they would pre-pandemic to ship items across the ocean.

As reported by Insider’s Rachel Premack, this is because of a breakdown in the freight supply chain. Demand dried up in the first half of 2020 and then came back at the end of the year, leading to port traffic jams and blockages. A lack of containers and dock workers has made it worse.

Many brands are now scrambling to find a space on a ship, and are being forced to pay top dollar for it, Premack reported, using Nike as an example. According to shipping expert Simon Sundboell from eeSea, Nike would have paid $2,000 for a 40-foot container pre-pandemic. Today, it could be paying as much as $20,000 for that same-sized vessel, Sundboell said.

If you have a story to share please contact this reporter via encrypted messaging app Signal at +1 (646) 768-4716 using a non-work phone, by email to mhanbury@businessinsider.com, or Twitter DM at @MarySHanbury.

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