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Toyota to Boost U.S. Hybrid Output; Kroger Revamps E-Commerce

By Mark R. Long | WSJ Logistics Report

 

Toyota said it would expand hybrid capacity at plants in five states, including Kentucky, where the Camry has been made since 1988. JIM WEST/ZUMA PRESS

Toyota Motor said it would invest $912 million to boost production of hybrid vehicles in the U.S. to meet growing demand. The Japanese automaker said this investment would expand hybrid capacity at five factories across West Virginia, Kentucky, Mississippi, Tennessee and Missouri, as well as bring production of the hybrid Corolla to the U.S. for the first time.

The investment would create 252 new manufacturing jobs, and is part of Toyota’s pledge to invest up to $10 billion in the U.S. over the next five years, the WSJ’s Kelly Cloonan writes. Toyota has been doubling down on its hybrid strategy in the U.S. and recently opened a $14 billion plant in North Carolina that makes batteries mainly for hybrids. Meanwhile, Tokyo has committed to invest over half a trillion dollars in the U.S. as part of a trade deal with the Trump administration. 

Toyota currently assembles about half of the vehicles it sells in the U.S., with North American manufacturing facilities building 76% of the vehicles it sells in the U.S.

  • Rockwell Automation plans to build a plant near its headquarters in Milwaukee as the factory-automation company expands the capabilities of its equipment and software with generative AI. (WSJ)
  • Forklift maker Toyota Industries Corp. plans to unify all warehouse automation-related organizations in Europe and the U.S. under the Toyota Automated Logistics unit. (DC Velocity)
 
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E-Commerce

Kroger plans to lean more heavily on its store network and third-party delivery partners under a new e-commerce plan. KROGER via REUTERS

Kroger said it will close three automated fulfillment centers and expand partnerships with DoorDash, Uber Eats and Instacart as part of an overhaul of its e-commerce operations. The Journal’s Connor Hart writes that the grocer will book a $2.6 billion charge from closing the facilities and from underperformance of its automated fulfillment network.

The closures in Florida, Maryland and Wisconsin are expected to have a neutral effect on same-store sales, excluding fuel, with the changes increasing e-commerce operating profit by about $400 million next year. Under its new strategy, the company will lean more heavily on its store network and third-party delivery partners.

The Cincinnati company said it had expanded its partnership with Instacart, its primary delivery fulfillment provider, and broadened its relationship with DoorDash. Kroger plans to launch on Uber Eats early next year.

 
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Quotable

“Our customers tell us that they remain on the sidelines due to uncertainty and perhaps the hesitation to make larger financial commitments amid an uncertain economic environment.”

— Home Depot CFO Richard McPhail, as the company trimmed its full-year outlook
 

Global Trade

China could exploit the U.S.’s dependence on Chinese supply chains for products such as pharmaceuticals and electrical equipment, according to a new report to Congress that urged lawmakers to force industries to disclose such risks.

Earlier this year, China choked off the supply to the U.S. of rare earths that are crucial for making everything from cars to jet engines, the Journal’s James T. Areddy writes. The U.S.-China Economic and Security Review Commission warned in its annual report that Beijing’s huge industrial base affords it similar leverage over other U.S. supply chains, such as for lithium-ion batteries, foundational semiconductor chips and components used by power utilities.

 

Number of the Day

2.04 Million

Loads posted to the DAT One truckload spot market in the week ended Nov. 14, down 5% from the week before, but above 2 million for the 10th straight week as shippers prepare for the holidays

 

In Other News

The cargo ship Dali hit the Francis Scott Key Bridge on March 26, 2024. MARYLAND NATIONAL GUARD via AP

The National Transportation Safety Board said a loose wire led to a power failure on the containership that crashed into Baltimore's Francis Scott Key Bridge in 2024, killing six people, Reuters reported. The estimated cost to rebuild the bridge doubled to $4.2 billion-$5.2 billion, according to Maryland officials, who also pushed back forecast completion to late 2030, Politico writes.

 
  • The U.S. shed an average of 2,500 private-sector roles in the four weeks ended Nov. 1, ADP said, a sign job losses slowed heading into this month, while Labor Department data showed initial jobless claims reached 232,000 in the week ended Oct. 18. (WSJ)
  • The Trump administration will give Constellation Energy a $1 billion federal loan to restart the Three Mile Island nuclear power plant in Pennsylvania. (WSJ)
  • A judge overseeing the First Brands bankruptcy case said he intends to approve the appointment of an examiner to investigate claims of potential financial irregularities at the auto-parts supplier. (WSJ)
  • AkzoNobel and Axalta Coating Systems reached an agreement for an all-stock merger that would create a global paint giant with a combined market value of about $17 billion. (WSJ)
  • China’s Xiaomi said its quarterly profit more than doubled on higher revenue from its Internet-of-Things business and fast-growing EV division. (WSJ)
  • PDD Holdings, the Chinese owner of shopping app Temu, reported a 9% increase in quarterly revenue and warned of volatility ahead. (WSJ)
  • CMA CGM and partner AD Ports will add container capacity of nearly 1 million 20-foot-equivalent units at Abu Dhabi’s Khalifa Port. (Journal of Commerce)
  • SASI World, IAS Group and e-Smart Logistics are joining to launch a new air-logistics network called e-Smart Avia. (The Loadstar)
  • Denmark’s DSV has overtaken Germany’s DHL as the world’s biggest freight forwarder by revenue. (ShippingWatch)
  • Federal agents arrested 30 drivers with commercial licenses alleged to be in the U.S. illegally near the New York border. (Transport Topics)
 

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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