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Consolidating Robots; Dwindling Auto Inventories; Crisis-Driven Procurement

By Paul Page

 

PHOTO: ZEBRA TECHNOLOGIES

The Logistics Report won’t publish on Monday, July 5. Look for the next newsletter Tuesday, July 6.

Automation in the warehouse is triggering behind-the-scenes consolidation in supply chains. The Zebra Technologies acquisition of material-handling startup Fetch Robotics extends the logistics-equipment provider’s reach into warehousing operations, the WSJ Logistics Report’s Jennifer Smith writes, and highlights how the surge in online commerce is driving greater interest in the nuts-and-bolts of distribution. The deal is the latest in warehousing since Amazon kick-started the automation drive with its 2012 acquisition of Kiva Systems. Zebra and Fetch say the combination will help them build an “ecosystem” with connected technology. Automation companies across the logistics sector are moving to tie the physical capabilities of the machines to larger warehouse management systems and the software that helps manage inventory. The idea is to have robots that navigate warehouses and pick up goods also tap into systems that tell them which orders to fill, while employers watch the machines and human workers alike.

 
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Manufacturing

A car carrier at the Port of Charleston, S.C. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS

Supply is a growing concern in a U.S. automotive sector that’s seeing no shortage of demand. Several car makers racked up double-digit sales gains in the second quarter, the WSJ’s Nora Naughton and Mike Colias report, and J.D. Power estimates new-vehicle sales in the first half of the year likely exceeded the pre-pandemic level of two years ago. But the rate of sales also slowed sharply at the end of the quarter, and analysts say that’s likely because inventories are withering as the global semiconductor shortage crimps production. Dealers started June with about 1.5 million vehicles on their lots or en route to stores, down 42% from the same time in 2020 and down 23% from the start of May. Association of American Railroads figures show shipments of cars and auto parts on U.S. railroads were off nearly 71,000 carloads, or 21.3%, from the same period in 2019.

 
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Quotable

“We’ve been in a full-fledged supply crisis since about June of last year.”

— Tyson Jominy, automotive analyst for J.D. Power
 

Supply Chain Strategies

A pharmacist in personal protective gear at Mount Sinai Queens. PHOTO: MARK LENNIHAN/ASSOCIATED PRESS

Hospitals that a year ago were struggling to find personal protective equipment are now scrambling for warehouse space. New York-area hospitals are sitting on stockpiles of masks, pallets of disposable isolation gowns and tons of gloves as they weigh longer-term changes to the supply-chain and procurement practices. The WSJ’s Melanie Grayce West reports the pandemic has forever shifted the way hospitals purchase supplies, requiring procurement departments to diversify their suppliers and dig deeper into where raw materials are sourced. The excess in supplies is partly due to contracts signed during the height of the pandemic. Manufacturers that had to dramatically ramp up production of some products sought large, multiyear contracts to make the shift economically viable. That marked a swing from their longstanding lean inventory approach. Officials say the supplies eventually will be used, while crisis-driven lessons on diversifying vendors and keeping stopgap inventory will likely guide operations in the future.

 
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Number of the Day

17.1%

Year-over-year increase in U.S. imports of American flags in the three months ending April 30, 96.2% of which came from China, according to Panjiva.

 

In Other News

A measure of U.S. manufacturing activity showed supplier deliveries to factories deteriorated again in June. (WSJ)

Growing numbers of trucking companies, warehouse operators and other businesses are offering hiring bonuses of $1,000 for hourly workers. (WSJ)

New U.S. worker filings for jobless benefits fell to a fresh pandemic low. (WSJ)

Oil prices rose above $75 a barrel for the first time since 2018. (WSJ)

South Korea’s exports rose a faster-than-expected 39.7% in June. (MarketWatch)

Officials from 130 countries agreed to an overhaul of the rules for taxing international companies that includes a global minimum rate of 15%. (WSJ)

Amazon says its carbon footprint grew 19% last year. (MarketWatch)

Hennes and Mauritz’s quarterly sales in China fell 28% following the clothing retailer’s conflict with Beijing over forced-labor allegations in the Xinjiang region. (WSJ)

The Covid vaccination campaign drove stronger quarterly sales and profit at Walgreens Boots Alliance. (WSJ)

Nissan will spend $1.4 billion to place a large-scale factory for electric-vehicle batteries in the U.K. (Financial Times)

Gap is closing all its stores in the U.K. and Ireland​ and looking to sell its stores in Italy and France. (Chain Store Age)

Uniqlo owner Fast Retailing will launch in-house production with an apparel factory in Tokyo. (Nikkei Asia)

Analysts say grocers are having a hard time making the economics of micro-fulfillment centers work. (Supply Chain Dive)

Cargo interests say a final agreement to allow the Ever Given to leave the Suez Canal is likely at least a week away. (TradeWinds)

Port terminal operator DP World acquired U.S.-based logistics firm Syncreon in an agreement with an enterprise value of $1.2 billion. (Bloomberg)

European regional container line Unifeeder says its chartering costs have tripled since last year. (ShippingWatch)

Maersk Line ordered a feeder container ship from South Korea’s Hyundai Mipo Dockyards that will be capable of running on methanol. (Lloyd’s List)

Maersk Line is setting up a petrochemicals hub at Saudi Arabia’s King Abdullah Port. (Arab News)

Global air cargo volumes were 1% below the pre-pandemic level of 2019 in the first five months of the year. (Air Cargo World)

Kuehne + Nagel is selling a minority stake in its recently acquired China-based Apex International freight business to a private equity group. (Air Cargo News)

A Colorado company has developed a process to make a beer concentrate that would be easier and cheaper to ship than the liquid variety. (Scientific American)

 

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, @CostasParis. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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