Zebra CEO says freight costs have moderated, component shortages still a headwind

Zebra Technologies chief executive Anders Gustafsson told CNBC’s Jim Cramer on Friday that while the company has seen freight costs come down, shortages of components like semiconductor chips continue to cause issues.

“Over the past two years, we’ve seen kind of a migration of some of the issues. Now, it started off with freight being the issue that we talked about, the cost that we incurred, that has moderated. It was somewhat better in Q1 than it was in Q4 – our cost per kilo was coming down, not to what it was pre-pandemic but it certainly was down,” Gustafsson said in an interview on “Mad Money.”

I have added that the company is forecasting to hold at these levels for the rest of the year.

Yet, “component shortages, semiconductor shortages, and we’re now spending a lot more money on securing long-lead time parts and having to expedite them to our facilities and then expediting the finished goods to our customers,” the CEO said.

And while the company has had to pay for more expensive shipping options as a result of the supply chain delays, it expects to see improvement later in the year, according to Gustafsson.

“We are putting everything basically on air freight versus putting it in a container on ocean [freight]which obviously would be much cheaper, but as we go through the year, we expect that we will get better supply and we will be able to put more things on ocean,” he said.

Shares of Zebra rose 6.36% on Friday.

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