Today's Logistics Report: YRC's Big Bailout; Resetting Free Trade; Delivery on Ice
July 02 2020 - 11:19AM
Dow Jones News
By Jennifer Smith
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The U.S. government is pointing to national security concerns in
bailing out trucker YRC Worldwide Inc. The Treasury Department is
lending the troubled trucker $700 million in coronavirus stimulus
funding, the WSJ's Kate Davidson and Jennifer Smith report, and
taking a 29.6% stake in the business under a Cares Act provision
for companies deemed essential to national security. YRC is the
fifth-largest U.S. trucking company, moving goods for big shippers
like Walmart Inc. and Home Depot Inc. and handling 68% of
less-than-truckload services for the Defense Department. One of the
few big unionized carriers left, YRC has struggled under heavy debt
and was trying to turn its business around when the coronavirus
pandemic crashed freight volumes. Stephens Inc. analyst Jack Atkins
says the federal loan "removes the risk of a bankruptcy" for YRC,
which plans to use the funding to make up missed pension and
healthcare payments and to refresh its aging fleet.
ECONOMY & TRADE
Don't expect the U.S.-Mexico-Canada Agreement to usher in a new
era of North American trade peace. Ongoing tensions over tariffs
and other issues that prolonged negotiations are complicating the
rollout of the updated version of the North American Free Trade
Agreement, the WSJ's Josh Zumbrun reports, and ramping up
uncertainty for cross-border supply chains. Lingering sore points
include rules still being finalized that require auto makers to
keep more of their factories in the U.S. and Canada, and concern
that the U.S. could impose new levies on metals as aluminum imports
from Canada surge. The USMCA keeps much of the groundwork laid by
NAFTA but adds provisions for digital trade and safeguards meant to
bolster standards in Mexican factories. U.S. labor groups worry
Mexico won't follow through on those requirements, while lawmakers
from farm states question how far Canada will go to open up its
dairy market.
SUPPLY CHAIN STRATEGIES
Coca-Cola Co. is getting out of the chilled delivery business.
The drinks giant is discontinuing its Odwalla juice brand and the
230-truck refrigerated fleet that delivers Coke's fresh beverages
to stores, the WSJ's Jennifer Maloney writes, one of the biggest
moves yet by food companies resetting their supply chains by
narrowing product lineups. Supply-chain disruptions and volatile
swings in consumer demand during quarantines are prompting food and
consumer-goods makers to rethink their offerings and prune
underperforming products. Coke said declining smoothie sales
contributed to challenges for Odwalla. The decision to pull the
plug will cut about 300 jobs and dismantle a network that also
carried Coke's fresh orange juice and single-serve Fairlife milk to
retailers. Those trucks will be sold and Coke will seek other
routes to market for the remaining products.
QUOTABLE
IN OTHER NEWS
Global manufacturing activity showed fresh signs of recovery in
June despite weak demand. (WSJ)
Oil prices neared their highest level since early March on
supply cuts and recovering fuel demand. (WSJ)
The U.S. House passed a $1.5 trillion infrastructure bill that
is heavily opposed by Senate Republicans. (WSJ)
U.S. vehicle sales fell by about one-third in the second
quarter, less sharply than anticipated. (WSJ)
The U.S. warned companies with suppliers and customers in China
of risks linked to human-rights violations there. (WSJ)
Autonomous trucking startup TuSimple is working with logistics
operators including U.S. Xpress Enterprises to build a nationwide
freight network. (WSJ)
The U.S. filed suit to seize four tankers-worth of gasoline Iran
is sailing to Venezuela. (WSJ)
Investigators say regulators' sluggish response to the first
Boeing Co. 737 MAX crash contributed to a second deadly crash.
(WSJ)
Mitsubishi Aircraft reported an annual loss of $4.9 billion as
it seeks to build Japan's first passenger jet. (WSJ)
Apple Inc. is closing dozens of stores around the U.S. amid
mounting coronavirus infections. (WSJ)
General Mills's quarterly sales jumped 16% on strong demand for
consumer staples. (WSJ)
Macy Inc.'s reported a 45% decline in sales for the most recent
quarter. (WSJ)
Nordstrom is laying off thousands of workers as it copes with
pandemic-related losses. (Seattle Times)
British retailers including Harrods and John Lewis are laying
off thousands of workers as they prepare to permanently close
stores. (The Guardian)
El Al Israel Airlines canceled all its flights world-wide and
ordered aircraft back to Israel. (Jerusalem Post)
Spain's Port of Valencia is expanding container handling
capacity with plans for an "environmentally advanced" new terminal.
(Port Technology)
Lloyd's Register withdrew classification for sanctioned vessels
linked to Venezuelan cargoes, a key step demonstrating U.S.
pressure on marine service providers. (Lloyd's List)
British charity the Seafarers Hospital Society says suicide has
become the number one source of deaths on ships. (Splash 247)
Danish shipping company J. Lauritzen split the company into two
separate entities and CEO Mads Peter Zacho resigned.
(ShippingWatch)
Warehouse demand in the U.K. hit a record high in the second
quarter. (Bloomberg)
Innovo Property Group paid $34.1 million for a single-story
warehouse in Long Island City, Queens. (Commercial Observer)
Electric-truck maker Workhorse Group received $70 million from
an unnamed backer to ramp up vehicle production. (DC Velocity)
Chicago-area intermodal drayage provider Mark-It Express
Logistics acquired Sava Transportation. (Journal of Commerce)
ABOUT US
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 Jennifer Smith at jennifer.smith@wsj.com
(END) Dow Jones Newswires
July 02, 2020 11:04 ET (15:04 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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