Today's Logistics Report: Rising Port Waters; Suppliers Raise Prices; Tesla's Slow-Moving Parts

Date : 02/11/2019 @ 3:15PM
Source : Dow Jones News
Stock : Tesla, Inc. (TSLA)
Quote : 294.1  2.87 (0.99%) @ 5:20PM

Today's Logistics Report: Rising Port Waters; Suppliers Raise Prices; Tesla's Slow-Moving Parts

Tesla, Inc. (NASDAQ:TSLA)
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By Paul Page 

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U.S. seaports with a close-up look at the impact of the world's rising sea levels are starting to take their first steps to address the potential impacts on operations. The Port of Virginia is starting to move some critical equipment higher off the ground and other coastal areas are considering similar protections, the WSJ Logistics Report's Erica E. Phillips writes, as they respond to new assessments that project sharp increases in water levels and stronger storm surges in the coming decades. The actions are relatively limited so far, but infrastructure experts expect plans to accelerate as longer-term master plans are written. Virginia is already seeing storm surges and tidal flooding, raising concerns at commercial freight and military facilities in the low-lying Tidewater region. Boston is preparing irs own big infrastructure resilience plan . Other ports like Houston say their docks are high enough to give them ample time to cope with rising waters.

Higher prices are moving through supply chains toward consumers amid signs that last year's skyrocketing transportation costs are coming back to earth. Suppliers of household staples like diapers to toilet paper are raising prices again this year after hiking prices in 2018, the WSJ's Aisha Al-Muslim writes, hoping to offset rising commodity prices and boost profits. The new increases may revive a supply chain tug-of-war over prices from last year, when suppliers sought to pass along rising costs while retailers worried about a consumer backlash. Shoppers have accepted some of those higher prices for consumer staples, however, and in the meantime some logistics costs appear to be receding. Measures of trucking rates have been slipping this year as capacity has grown ahead of demand. Todd Tranausky of research group FTR says lower fuel costs and rising capacity signal "a much better 2019 than shippers expected during much of 2018."

Tesla Inc. is facing a new supply-chain problem now that it's shifting manufacturing and delivery of its Model 3 sedans into a higher gear. As the Silicon Valley auto maker's U.S. sales approach those of other luxury auto makers, the WSJ's Tim Higgins reports Tesla is facing growing challenges getting spare parts in place to maintain and repair the growing electric-car fleet. Car owners have faced waits measured in weeks and months for repairs as service centers await spare parts, underlining Tesla's difficulty in getting its post-sale supply chain moving efficiently and with the urgency of its assembly line. Tesla Chief Executive Elon Musk says the company has been "very silly" about managing parts, storing them at distribution warehouses rather than holding stock at service centers, for instance. Getting the logistics right is crucial given Tesla is targeting a $35,000 threshold to take its Model 3 mainstream.

ECONOMY & TRADE

U.S. tariffs on imported steel are moving through manufacturing supply chains on different tracks. Ohio- based Byer Steel Co. pointed to the support from higher prices in reporting stronger results last year and even handed out bonuses to workers, while St. Louis-based manufacturer Laclede Chain Manufacturing Co. is focused on cutting costs and reducing investment after rising materials costs cut short a growth spurt. The WSJ's Ruth Simon reports the varying responses are part of the complicated impact that the tariffs on steel and aluminum imports have had on the industrial economy, creating opportunities for some and challenges for others. Both companies say business has stabilized since the trade conflict ratcheted up last summer but that planning remains difficult amid uncertainties about U.S. trade policy over the long term. Steelmakers' profits are up, although foreign steel still accounts for a significant share of the U.S. market.

QUOTABLE

IN OTHER NEWS

The U.K. economy grew at the slowest pace in six years in 2018. (WSJ)

Canada added a net 66,800 jobs in January, the biggest one-month private-sector hiring spree on record. (WSJ)

Amazon.com Inc. is re-evaluating a planned campus in New York City amid a backlash to its billions of dollars in tax incentives. (WSJ)

Engineering and regulatory complications are expected to delay safety fixes covering Boeing Co. 737 MAX jets until at least April. (WSJ)

Honeywell International Inc. is introducing aircraft flight-data recorders that can provide accident information in real time. (WSJ)

Soaring palladium prices are triggering rising theft of automotive catalytic converters that use the metal in exhaust-control systems. (WSJ)

Hasbro Inc. and Mattel Inc. posted steep quarterly sales declines as last year's liquidation of Toys "R" Us disrupted the key holiday season. (WSJ)

Brazilian regulators are preparing to toughen mining safety rules following the deadly disaster that killed more than 150 people. (WSJ)

The United States will resume an anti-dumping investigation into Mexican tomatoes. (Reuters)

Cosmetics firm Coty Inc. says it has solved many of its supply chain problems but still has more work to do. (MarketWatch)

Chemicals and plastics producer Sasol Ltd. is pushing back the launch of a Louisiana plant because of rising capital costs. (Bloomberg)

PepsiCo is seeking to promote more women in its supply chain management operations. (Industry Week)

The U.K. scrapped a Brexit-related ferry contract with a freight company without ferries. (BBC)

Several Chinese electric-vehicle battery makers are likely to fail after Beijing ends its subsidy program next year. (Nikkei Asian Review)

The U.S. Postal Service lost $1.5 billion in its fiscal first quarter despite a 2.9% gain in revenue. (DC Velocity)

Trucker Averitt Express is laying off 98 workers in Smyrna, Tenn., after the loss of a Nissan Motor Corp. contract. (Nashville Post)

Container shipping lines face a backlash from customers after sharply increasing rates last year. (Lloyd's List)

U.S. East Coast ports are investing in rail transport after rail lifts rose 7% last year. (Journal of Commerce)

Vietnam's Vinalines Logistics is expanding warehousing for Honda Motor Corp. and adding new refrigerated facilities. (Viet Nam News)

Seaport cargo terminal operator DP World plans to launch a hyperloop project in India. (CNBC)

Hapag-Lloyd AG has developed a steel-floor container it says can carry more weight than conventional shipping containers. (Splash 247)

A Canadian judge cleared a bulk-ship operator of environmental charges stemming from an oil spill off Vancouver. (Maritime Executive)

Amazon is considering placing a distribution center in South Bend, Ind. (South Bend Tribune)

European regulators approved CMA CGM SA's proposed takeover of Ceva Logistics. (Splash 247)

FedEx Corp. is integrating its European express deliveries into TNT's road operations. (Post & Parcel)

More than 7,800 European truck operators are claiming compensation from truck manufacturers found to be operating a price fixing cartel. (Logistics Manager)

Canadian supply chain software company Tecsys acquired Danish transport technology firm Pcsys A/S. (Modern Materials Handling)

The U.K.'s Guardian newspaper switched to recyclable packaging made from potato starch. (The Guardian)

ABOUT US

Paul Page is editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @CostasParis , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Write to Paul Page at paul.page@wsj.com

 

(END) Dow Jones Newswires

February 11, 2019 10:00 ET (15:00 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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