Today's Logistics Report: Freight Networks Overfilling; Financing for Suppliers; Waiting for Delivery
By Paul Page
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A sudden snapback in freight demand has distribution networks
out of the U.S. West Coast bursting at the seams. The crush of
imports is straining capacity at seaports and in supply chains
heading inland, the WSJ Logistics Report's Jennifer Smith writes,
raising shipping prices for retailers and complicating efforts to
replenish inventories following the coronavirus pandemic upheaval.
Industry executives say the restocking is coming just as companies
are also starting to line up goods for the coming holiday season.
The surge marks a sharp turnaround from the downturn that hit
freight markets in the spring and summer, when truckers and
railroads slimmed down operations in the face of weak demand.
Intermodal demand off the West Coast is especially high. Union
Pacific Corp. has even raised surcharges on some of rail lanes for
spot-market shippers looking to get goods on board, a move that
seemed unthinkable just a few months ago.
SUPPLY CHAIN STRATEGIES
Some companies are trying something different to protect their
businesses from the economic fallout from the coronavirus pandemic.
Big manufacturers with complex global networks for parts and
services are paying their suppliers early, the WSJ's Vipal Monga
and Nina Trentmann report, as they try to reduce the risk of supply
chain disruptions. Companies including Lockheed Martin Corp. and
Micron Technology Inc. are pumping money into smaller businesses
that could fail otherwise, effectively deepening ties with their
suppliers. In one case, Lockheed started paying invoices to jet
parts maker Perfekta Inc. in half the time it usually takes,
helping the Wichita, Kan., company avoid a new round of layoffs.
Such moves go against a tide of tough cash-management practices
that have only gained strength during the recent crisis. On
average, large nonfinancial U.S. companies took 60 days in the
second quarter to pay suppliers, according to Hackett Group, a
Spending hundreds of millions of dollars on digital technology
hasn't proved to be enough for Kroger Co. The nation's biggest
grocer has poured money into projects ranging from a self-driving
grocery delivery robot to a big investment in automated
fulfillment, but the WSJ's Jaewon Kang reports that Kroger was
unable to meet higher demand when the pandemic caused a tsunami of
customers to order groceries online for the first time. The chain
has added new features aimed at e-commerce since March, but it has
lagged behind its competitors in responding to the upheaval in
customers' buying habits. The struggles show how complicated it can
be to implement the right technology in the digital age. In
Kroger's case, the company's wide-ranging investments may have
slowed adoption of technology for grocery delivery that are perhaps
less ambitious but more practical. That's left the grocer still
seemingly in catch-up mode in e-commerce.
IN OTHER NEWS
Economists in a survey expect the U.S. economy to expand at an
annualized rate of 23.9% in the third quarter, up from earlier an
The number of Americans seeking and collecting unemployment
benefits remains at historically high levels. (WSJ)
The euro has appreciated by more than 10% against the dollar in
recent months. (WSJ)
A large fire broke out at the Port of Beirut, near the site of
last month's massive explosion. (WSJ)
U.S. regulators proposed a $13,494 fine for meat supplier
Smithfield Foods for failing to protect workers from the
New York-based discount retailer Century 21 entered bankruptcy
protection and plans to close its 13 department stores. (WSJ)
The owner of Garage and Dynamite clothing stores filed for
bankruptcy protection and will close some locations. (WSJ)
European lawmakers are preparing to consider new environmental
rules governing ships calling at European ports. (Lloyd's List)
Tesla Inc. plans to start exporting cars made at its Shanghai
factory to Asia and Europe. (Bloomberg)
Shares of Nikola Motor Inc. tumbled on a short-seller's report
the electric-vehicle maker is an "intricate fraud." (Financial
Volkswagen AG's Traton trucking arm sweetened its takeover offer
for Navistar International to $43 per Navistar share, up from $35.
Uber Freight chief Lior Ron says transport supply growth is
lagging behind freight capacity growth. (Yahoo Finance)
Contract rates for trucking are rising amid tight capacity.
(Journal of Commerce)
Amazon.com Inc.'s Japan business will return about $18.8 million
to suppliers after having them shoulder the costs of the retailer's
discounts. (Nikkei Asian Review)
Walmart Inc. is testing grocery delivery by drone with unmanned
vehicle provider Flytrex. (Supermarket News)
E-commerce retailer 1-800-Flowers is adding 10,000 workers for
the holiday season, 2,000 more than last year. (Chain Store
Food supplier Nestlé is investing $30 million in a Closed Loop
Partners investment fund aimed at recycling. (Supply Chain
Lehigh Valley, Pa., residents are protesting plans for an
industrial park that would include large distribution centers.
(Allentown Morning Call)
Pompano Beach, Fla., residents and city planners are questioning
plans for a 1.2 million-square-foot distribution center for an
unnamed client. (Orlando Sentinel)
Japan ended the search for 42 crew members missing since the
sinking of a livestock carrier. (Splash 247)
Paul Page is editor of WSJ Logistics Report. Follow the WSJ
Logistics Report team: @PaulPage , @jensmithWSJ and @CostasParis.
Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at firstname.lastname@example.org
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September 11, 2020 10:57 ET (14:57 GMT)
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