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Supreme Court Deals Blow to Brokers; Retail Sales Show Resilience; U.S.-China Summit Ends

By Mark R. Long | WSJ Logistics Report

 

The Supreme Court’s ruling could end up benefitting larger trucking companies with greater resources for safety programs. DANIEL ACKER for WSJ

The Supreme Court said a man struck by a truck coordinated by C.H. Robinson can sue the broker for negligent hiring, a ruling that leaves brokerages more exposed to lawsuits in state courts and facing greater costs and verification responsibilities.

The unanimous opinion could direct customers to larger companies that have more resources for safety programs compared with smaller or newer carriers, The Wall Street Journal’s Esther Fung writes. It could also give the biggest players leeway to raise rates. Shares of trucking companies Old Dominion Freight Line, J.B. Hunt Transport Services and Saia rose Thursday, while shares of brokers including C.H. Robinson, RXO and Landstar fell.

In the 2017 incident, a truck driver working for Caribe Transport struck Shawn Montgomery, who sustained permanent and severe injuries, according to court documents. Montgomery then sued C.H. Robinson, which arranged the shipment, arguing that it should have known the carrier was unsafe.

C.H. Robinson argued it was immune to the lawsuit because of the Federal Aviation Administration Authorization Act. However, the Supreme Court declared that the federal law didn’t protect the broker from being sued for choosing an unsafe trucking company. C.H. Robinson said it was disappointed but respected the high court’s ruling.

 
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“The decision imposes an impossible task on brokers–effectively asking them to evaluate the safety of a given motor carrier despite having been deemed safe to operate on public roads by the federal government.”

— Transportation Intermediaries Association
 

Economy

Source: Commerce Department

April's retail sales data sent a reassuring signal: Despite rising gasoline prices, consumers aren't dramatically pulling back from spending in other areas, the Journal’s Matt Grossman writes. Overall, sales were up 0.5% last month compared with March, after rising by 1.6% the month before, according to the Commerce Department. That slowdown isn't as bad as it looks, because the March numbers reflected sharply higher gasoline prices. 

Gas prices didn't climb as fast in April, so the dollars spent at the pump didn't rise as fast either. Sales growth at bars and restaurants picked up, showing that shoppers haven't lost their appetite for going out.

Online sales growth accelerated, too. On the whole, economists studying the numbers estimated that Americans' shopping continued to outpace inflation last month, suggesting that consumers were still contributing to economic growth.

 
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Number of the Day

22%

Increase from a year earlier in April’s price index for imported petroleum and petroleum products, helping fuel a 4.2% increase in the overall import price index over the same period, according to the Bureau of Labor Statistics

 

Air Force One carrying President Trump departed Beijing on Friday. KYODONEWS via ZUMA PRESS

Global Trade

President Trump left Beijing, concluding a summit in which he worked to gloss over his differences with Chinese leader Xi Jinping, but which yielded few concrete changes to the two superpowers’ shaky relationship.

Trump told reporters that the two leaders had made “fantastic trade deals,” without providing details. He said he and Xi want the conflict in Iran to end and for Iran to not have a nuclear weapon. China's government said it had reached “a series of new common understandings” with the U.S., but didn’t say what those entailed.

 

In Other News

  • U.S. jobless claims rose by 12,000 to 211,000 in the week through May 9. (WSJ)
  • The U.K. economy grew 0.6% in the first quarter, outpacing the U.S. and most European peers. (WSJ)
  • Canada’s prime minister said the country needs to double its electricity-grid capacity by 2050, a project forecast to cost over 1 trillion Canadian dollars. (WSJ)
  • Boeing and Toyota donated $1 million each to help fund a new road-trip show starring Transportation Secretary Sean Duffy and his family. (WSJ)
  • Foxconn Technology Group, the world’s largest contract electronics maker, posted strong earnings as it ramped up output of server racks and other advanced equipment for the AI build-out. (WSJ)
  • Semiconductor Manufacturing International, China’s biggest chip foundry, reported weaker-than-expected profit as it expanded capacity amid Beijing’s push for chip localization. (WSJ)
  • Honda reported its first annual loss as a listed company, $2.7 billion, citing about $10 billion in EV losses. (WSJ)
  • U.K. food-and-beverage ingredient company Tate & Lyle said it received a $3.71 billion takeover proposal from U.S. peer Ingredion. (WSJ)
  • Satellite operator Iridium Communications agreed to take full control of Aireon, a company that tracks airplane movements. (WSJ)
  • About half of the cargo-theft incidents in the first quarter involved carriers with previously clean operating histories, according to carrier verifying company Highway. (SupplyChain24/7)
  • German auto-parts maker Schaeffler reached a deal to deploy thousands of robots from the U.K.’s Humanoid in its factories. (DC Velocity)
 

In this week’s Podcast: As President Trump and Xi Jinping meet, we look at whether the two countries are finding a way to manage competition. Also, Juliette Enser of the U.K.’s Competition and Markets Authority on the antitrust watchdog’s enforcement priorities. New episodes every Friday on Apple Podcasts, Spotify and Amazon.

 

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.

 
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