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Artificial Holiday Shortfalls; Trucking’s Vaccine Alarm; Kroger’s 30-Minute Plan

By Paul Page

 

A Balsam Hill Christmas tree shop in Cherry Hill, N.J. PHOTO: HANNAH YOON for THE WALL STREET JOURNAL

It’s beginning to look a lot like Christmas supply-chain fiascos, everywhere you go. The logistics disruptions hitting retailers are already buffeting the market for artificial Christmas trees, the WSJ Logistics Report’s Paul Berger writes, with merchants boosting prices by 20% or more for the fake firs that growing numbers of Americans use to deck the halls. Companies like California-based Balsam Hill say they are trying to cover shipping costs that are skyrocketing this year while they wait out lengthy delivery delays for seasonal goods that have desperately short shelf lives. Sellers of Christmas goods are part of the vast array of businesses struggling under the congestion that is locking up supply chains. The suppliers and retailers are hoping to recover from a pandemic-pummeled 2020 season, when inventories fell short of surprisingly strong demand from locked-down consumers. Now, distributors are pining for deliveries to spruce up this year’s earnings.

 
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Transportation

Truck driver Hugo Pena is vaccinated in Carson, Calif., in March. PHOTO: BRITTANY MURPHY/ZUMA PRESS

Big trucking companies are raising alarms over the planned federal Covid-19 vaccination and testing mandate. Executives tell the WSJ Logistics Report’s Jennifer Smith that the plan President Biden unveiled to fight the pandemic spread could push more workers away from their operations at a point when companies are finding it tough to fill seats in trucks. The federal proposal would affect companies with 100 or more employees, a threshold bigger companies say could push vaccine-averse workers to smaller companies or to work as independent owner-operators. The requirement that unvaccinated workers undergo weekly testing may be just as troublesome for some trucking companies. Truckload operators with long-haul drivers on the road for long stretches may find it difficult to manage the logistics of testing. Knight-Swift Transportation CEO Dave Jackson says a testing mandate could slow deliveries and cut into work time that is limited by hours-of-service restrictions.

 
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Quotable

“If it’s sitting on the West Coast on a ship at anchor or still in the Far East, there’s a good chance Christmas is going to come late.”

— Supply-chain consultant Dean Tracy, on seasonal container imports
 

Supply Chain Strategies

Kroger operates more than 2,700 stores and has worked with Instacart on delivery since 2017. PHOTO: SCOTTY PERRY/BLOOMBERG NEWS

Kroger’s latest plan to expand its grocery-delivery business will take about half an hour to execute. The largest supermarket chain in the U.S. is expanding its cooperation with Instacart to deliver food and household staples in as little as 30 minutes. The WSJ’s Jaewon Kang reports the agreement brings the grocery giant deeper into a crowded grocery-delivery market that has been roiled by new entrants and whipsawing demand during the pandemic. The deal brings together two big operators trying to solve problems in delivering food and groceries to consumers’ homes. Retailers have struggled with margin-squeezing pressures from labor and transportation costs. But supermarkets and restaurants have seen delivery as a crucial sales tool during the pandemic, and going through a third-party provider like Instacart may allow grocers to keep their own prices steady while the delivery partner absorbs or passes along the fees to cover the logistics.

 
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Number of the Day

3,832

Cass Freight Index for North American shipping expenditures in August, 9.2% higher than July and up 42.2% from August 2020 to the highest level recorded by Cass Information Systems.

 

In Other News

Inflation in the U.S. cooled slightly from July to August but consumer prices were still up 5.3% from a year ago. (WSJ)

Growth across a range of Chi­nese eco­nomic in­di­ca­tors pulled back sharply in Au­gust. (WSJ)

U.S. median household income fell 2.9% amid economic fallout from the pandemic last year. (WSJ)

The International Energy Agency says the impact of Hurricane Ida and other outages will take a sizable chunk out of global oil production this year. (WSJ)

Amazon plans to add 125,000 employees throughout its U.S. warehouse operations for the holidays. (WSJ)

Chevron is tripling spending in its new low-carbon unit to $10 billion through 2028. (WSJ)

The U.K. will delay imposing checks on European Union goods entering the country until mid-2022. (Financial Times)

United Parcel Service expects supply-chain problems to continue next year after a 2021 full of disruption. (Agence France-Presse)

Kellogg will spend about $45 million over the next three years to restructure its North American supply chain. (Supply Chain Dive)

Australia’s big mining companies are rushing to introduce emissions-free trucks as they shift their focus away from autonomous vehicles. (Nikkei Asia)

Taiwanese hardware maker and household goods retailer Test Rite joined the growing ranks of shippers chartering container ships. (The Loadstar)

Mediterranean Shipping Co. is shifting two vessels from Atlantic services to the overflowing trans-Pacific market. (Journal of Commerce)

Port Houston container terminals were expected to open today after shutting down Tuesday as Nicholas made landfall as a Category 1 hurricane. (NBC)

Knight-Swift Transportation is starting a truck-services operation. (Commercial Carrier Journal)

Google will use project44 as a transportation visibility provider in the company’s new supply-chain twin service. (ZDNet)

Secondhand apparel merchant ThredUp plans to operate a 600,000-square-foot fulfillment center in the Dallas area. (Dallas Morning News)

Warehouse automation startup Ambi Robotics raised $26 million in a Series A funding round led by Tiger Global. (TechCrunch)

Locus Robotics added $50 million in backing from existing investor Tiger Global. (Modern Materials Handling)

 

About Us

Paul Page is editor of WSJ Logistics Report. Write to him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @jensmithWSJ, and @pdberger. and @LydsOneal. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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