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L.A.'s Slow Start; Dreamliner Delays; Trucker Shortage Hits IKEA

By Paul Page

 

PHOTO: KYLE GRILLOT/BLOOMBERG NEWS

Today's newsletter was written by WSJ Logistics Report's Jennifer Smith.

The clock doesn’t appear to have started yet on the move to 24/7 operations at the Port of Los Angeles. Executive Director Gene Seroka says he doesn’t know how quickly the busiest U.S. gateway for container shipping can extend its hours, adding “we’re not going to create artificial deadlines” on a move that the White House hopes will ease supply-chain strains. The WSJ Logistics Report’s Paul Berger writes that ramping up operations may be easier said than done, with jammed up inland transport networks and warehouses adding to broader logistics woes for retailers ahead of the holidays. Port officials are talking with terminal operators and big importers about how to roll out the extended hours, which haven’t gained much traction in a pilot at the neighboring port of Long Beach. The backlog off the port complex now extends to 60 container ships, with 25 more set to arrive in coming days.

 
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Supply Chain Strategies

A 787 Dreamliner under maintenance at an All Nippon Airways hangar in Tokyo this year. PHOTO: TORU HANAI/BLOOMBERG NEWS

Another production problem is tripping up Boeing’s efforts to fix its manufacturing operations. The latest stumble involves weaker-than-expected titanium parts on some of the aircraft maker’s 787 Dreamliners, the WSJ’s Andrew Tangel reports, adding to snafus that have left Boeing stuck with more than $25 billion of the jets in its inventory. The titanium issue doesn’t pose an urgent safety risk to planes currently flying, people familiar with the company’s plans said, and was discovered as part of a continuing audit. Aviation regulators are pushing Boeing to address production and culture problems more quickly and are probing a series of alleged quality-control lapses across the company’s commercial-airplane unit, such as allowing unqualified personnel to sign off on quality checks. Boeing disputes some of those claims and says the company is making progress and raising its own standards. The plane maker expects to resume Dreamliner deliveries in November at the earliest.

 
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Quotable

“We are struggling to have the goods in the right place at the right time.”

— Tolga Öncü of Ingka Holding B.V., IKEA’s main holding company.
 

Supply Chain Strategies

IKEA said it has its products in warehouses in most cases, but fewer ways to get them to stores. PHOTO: GETTY IMAGES/GETTY IMAGES

Transport strains are causing empty shelves at the world’s largest furniture seller. IKEA says a significant share of its flat-pack furniture products and housewares are stranded at warehouses, the WSJ’s Trefor Moss reports, as a shortage of truck drivers in the U.K. and elsewhere hampers distribution. IKEA has estimated that about 10% of its items aren’t available in the U.K., and the company says that level is typical of the situation in other markets. The shortages aren’t yet crimping sales, and the company says it has enough other products to provide alternatives for shoppers. IKEA reported a 6.3% increase in revenue in the most recent fiscal year, with digital sales accounting for about 30% of total revenue, up from 18% the previous year. The struggles of a retailer known for its supply-chain savvy highlight the challenges other shippers face as pandemic-driven disruptions look likely to extend into 2022 and beyond.

 
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Number of the Day

$3.586

Average per-gallon price for diesel fuel across the U.S. for the week ended Oct. 11, up $1.191 over a year ago and the highest weekly price since December 2014, according to the Energy Information Administration.

 

In Other News

Initial U.S. jobless claims fell below 300,000 for the first week since the pandemic began in March 2020. (WSJ)

The International Energy Agency increased its forecast for oil-demand growth as rising natural-gas and coal prices push power plants into using oil instead. (WSJ)

A federal grand jury indicted a former Boeing pilot in a case tied to crashes of the plane maker’s 737 MAX jets. (WSJ)

Toyota supplier Nippon Steel sued the auto maker for allegedly using stolen technology for a material in electric motors. (WSJ)

Smelters facing growing pressure to curb emissions cut zinc and aluminum production as energy costs soar. (WSJ)    

Taiwan Semiconductor Manufacturing plans to build a new chip factory in Japan. (WSJ)

More than 10,000 unionized Deere & Co. workers went on strike after rejecting a tentative labor deal. (WSJ)

Activist investor Jana Partners wants Macy’s to spin off its e-commerce business. (WSJ)

Australian mining company South32 is buying a 45% stake in a Chilean copper mine as demand rises for the commodity in low-carbon technologies. (WSJ)

A measure of U.S. wholesale prices rose 0.5% in September, the slowest pace in nine months. (MarketWatch)

Terminals at the ports of Seattle and Tacoma are extending hours to address cargo ship congestion in Puget Sound. (Seattle Times)

Hyundai Motor wants to develop its own semiconductors. (Reuters)

Uniqlo parent Fast Retailing expects its profit to rise 3% this fiscal year, to the equivalent of $1.54 billion. (Nikkei Asia)

Clive Data Services says spot airfreight rates on Asia to Europe lanes rose 30% in the past five weeks. (Lloyd's Loading List)

A.P. Moller-Maersk’s venture-capital arm invested in Vertoro, a Dutch alternative-fuels technology startup. (Splash 247)

Japan-based Nippon Express will use high-speed ferries to Osaka and Kobe to bypass container shipping and air cargo bottlenecks in Shanghai. (The Loadstar)

Discount retailer 99 Cents Only Stores is working with Instacart to provide two-hour delivery from stores in California, Arizona, Nevada and Texas. (Chain Store Age)

Amazon places products from its house brands and those exclusive to its marketplace ahead of competitors in its search results, an investigation found. (The Markup)

Autonomous trucking startup Embark Trucks said carriers have reserved 14,200 trucks equipped with its technology. (Forbes)

Flatbed hauler PGT Trucking plans to lease 100 Nikola hydrogen-powered fuel cell electric trucks. (FreightWaves)

Executives at S&P 500 companies have mentioned the phrase “supply chain” about 3,000 times on investor calls this year. (Bloomberg)

 

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, @pdberger and @LydsOneal. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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