Today's Logistics Report: Shipping's Bet on Trade; Amazon's Soaring Costs; Stores' Opening Hours
May 01 2020 - 1:25PM
Dow Jones News
By Paul Page
Sign up: With one click, get this newsletter delivered to your
inbox.
Shipping companies aren't betting against globalization over the
long term even if as they pull back ocean-going capacity this year.
The turbulent response around the world to the coronavirus
pandemic, with supply chains rattled and shortages of critical
goods in many countries, has some world leaders calling for
reshoring of manufacturing. Ship owners aren't buying it, the WSJ
Logistics Report's Costas Paris writes in a Shipping Matters
column, reasoning that the pandemic and the crumbling trade economy
is a detour from global growth and not a sea change. BIMCO's Peter
Sand says China's sprawling factory sector and its extensive
shipping infrastructure gives the country too big an advantage for
companies to ignore. Germany's Hapag-Lloyd AG is among the
operators committed to ultralarge container ships, and the operator
isn't changing course. Manufacturers may add factories close to
home, the carrier says, but they won't walk away from China.
E-COMMERCE
Amazon.com Inc.'s soaring sales growth in a stormy retail market
is coming at a high cost. The company's sales jumped 26% in the
first quarter as consumers locked down at home by the coronavirus
restrictions rushed to order goods online. The WSJ's Dana Mattioli
reports the company's profit also tumbled 29% to $2.54 billion and
that shipping costs in the normally slower quarter skyrocketed 49%
to $10.94 billion. The results reflect the central role Amazon has
played during the crisis, delivering goods to people stranded at
home by shelter-in-place orders. They also show the rapid
adjustment the company has undertaken. Amazon carried nearly twice
as much inventory on its balance sheet as it counted in the
year-ago quarter, and it is adding 175,000 warehouse and delivery
workers to handle the surge. The company now projects about $4
billion in costs in the second quarter related to the Covid-19
outbreak.
SUPPLY CHAIN STRATEGIES
The doors to U.S. retail stores will soon start cracking open a
bit. Macy's Inc. plans to reopen 68 stores on Monday in states that
have loosened restrictions, the WSJ's Suzanne Kapner reports,
joining a handful of other retailers that are limping back to life
after the coronavirus forced them to shut stores. Macy's Chief
Executive Jeff Gennette expects to open all the company's roughly
775 stores in the next six weeks, assuming continued progress in
lowering infection rates in the U.S. Best Buy is also looking to
open about 200 stores this month, and both retailers will have
sharply restrictive operations meant to keep shoppers and consumers
safe. The opening plans suggest the growing urgency across a retail
sector that's taken big financial hits from the lockdowns meant to
slow the coronavirus spread. Sales at department stores plummeted
nearly 20% from February to March, according to federal
figures.
QUOTABLE
IN OTHER NEWS
Consumer spending fell 7.5% in March, the steepest decline in
records dating to 1959. (WSJ)
At least 30.3 million Americans have filed new unemployment
claims since mid-March. (WSJ)
The eurozone economy shrank at the fastest pace on record during
the first three months of this year. (WSJ)
China's official manufacturing index slipped as factories
reported slackening export demand. (WSJ)
Mexico's economy contracted 1.6% in the first quarter. (WSJ)
The White House is confident China will meet its obligations
under a trade deal and increase imports from the U.S. by $200
billion over 2017 levels. (WSJ)
Boeing Inc. launched a $25 billion bond offering. (WSJ)
Apple Inc.'s revenue ticked up 1% in its second quarter despite
the coronavirus impact in China. (WSJ)
Apparel retailer J.Crew Group Inc. is preparing to file for
bankruptcy protection. (WSJ)
Major restaurant suppliers say orders suggest the industry is
getting ready to resume more normal operations. (WSJ)
Changes in consumer behavior under the pandemic helped push
McDonald Corp's sales down 6% in the first quarter. (WSJ)
Qualcomm Inc. says semiconductor shipments fell 17% in the first
quarter and handset demand declined 21%. (WSJ)
American Airlines Group Inc, is reducing its fleet amid plans to
cut flying by 70% by June. (WSJ)
Small U.S. oil companies are shutting down wells faster than
anticipated. (WSJ)
Shopify launched a shopping platform that connects merchants,
logistics operators and consumers. (TechCrunch)
Shopping network QVC is closing its Lancaster County, Pa.,
distribution center as it consolidates regional operations at a
bigger site in Bethlehem, Pa. (PennLive)
Australia is subsidizing cargo flights used by freight
forwarders to help the country's agriculture exporters. (The
Loadstar)
Maritime insurer TT Club warned that warehousing capacity at
port terminals and inland depots is filling up amid supply chain
upheaval. (Port Technology)
More ships sailing between Europe and Asia are taking the long
route around the Cape of Good Hope to avoid the Suez Canal.
(Lloyd's List)
Tesla Inc. is shifting delivery of its first Semi truck to 2021,
putting the vehicle two years behind schedule. (Commercial Carrier
Journal)
Freight broker C.H. Robinson Worldwide Inc, is furloughing or
reducing hours for 7% of its workforce after cash flow from
operations fell 77% in the first quarter. (Fox Business)
Truckload carrier U.S. Xpress Enterprises Inc. lost $7.3 million
in the first quarter despite a 4.1% gain in revenue. (Chattanooga
Times Free Press)
Werner Enterprises Inc. says an early risk assessment of
customers helped the truckload carrier minimize the pandemic's
financial fallout. (Transport Dive)
Freight forwarder DSV A/S will l ay off 3,000 workers after
reporting slimmer first-quarter margins. (ShippingWatch)
Kuehne + Nagel International AG expects shipping markets to
rebound in the second half of the year. (Lloyd's Loading List)
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 Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
May 01, 2020 13:10 ET (17:10 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Shopify (NYSE:SHOP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Shopify (NYSE:SHOP)
Historical Stock Chart
From Sep 2023 to Sep 2024