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Coronavirus's Silver Lining; Flying Past Boeing; Untangling Rental Logistics
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The Logistics Report won’t publish on Monday, Feb. 17, in observance of the Presidents Day holiday. We’ll resume publishing next Tuesday.
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A fenced-off road near the Alibaba headquarters in Hangzhou, China. PHOTO: AFP VIA GETTY IMAGES
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Today's newsletter was written by WSJ Logistics Report's Jennifer Smith.
E-commerce giant Alibaba Group Holding Ltd. could ultimately benefit from the coronavirus outbreak even as travel lockdowns and quarantines complicate its delivery operations. The epidemic has dampened consumer demand for some goods and stranded workers at home, the WSJ’s Stu Woo reports, leaving factories dark and straining Alibaba’s logistics arm, which is now operating at 20% capacity. The company expects challenges in the short run, but said it is also seeing a significant increase in online purchases of groceries and basic staples as consumers avoid stores. Segments like its online video business could get a bounce as more people are stuck at home, the WSJ’s Jacky Wong writes in Heard on the Street. The greater reliance on home delivery could also spur more small businesses to move more quickly to online sales, including those in smaller and poorer cities that Alibaba is already targeting for growth.
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Airbus SE is hoping to fly past U.S. rival Boeing Co. as the grounding of the 737 MAX jet stretches into a second summer. The European plane maker is planning to ramp up production of its bestselling single-aisle A320neo jet, a MAX competitor, despite delivery delays that are expected to extend into next year, the WSJ’s Benjamin Katz reports. Airbus aims to pump out as many as 67 a month by 2023 from the current target of 63 a month in 2021. But the company has yet to benefit from the MAX grounding because both jets have yearslong order books. Airbus has struggled with production issues on many of its planes, with engine glitches adding to problems. The company is reining in deliveries of its wide-body models
as demand falls, and swung to a full-year net loss of $1.48 billion in 2019.
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“The means of production in the economy has been hampered.”
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— Alibaba Chief Financial Officer Maggie Wu.
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Rent the Runway Inc. is bringing on logistics talent from the e-commerce big leagues to help unknot its tangled supply chain. The clothing rental startup is hiring Brian Donato, a former Amazon.com Inc. operations director, as its chief supply chain officer, the WSJ’s Charity L. Scott reports, and is bringing on board former Walmart Inc. and Amazon transportation executive Michael Indresano. The moves follow operational stumbles last year that delayed shipments, stretched out customer-service wait times and led the company to temporarily stop accepting new orders. Rent the Runway’s logistics has grown more complex as it added monthly subscription plans and new service lines to
its original model of renting out gowns for special occasions. Mr. Donato, who most recently led operations for indoor farming startup Bowery Farming, says he’s not surprised Rent the Runway outgrew its logistics solutions: “With size, everything has the potential to break.”
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Tons of cut flowers American Airlines says it moved from the Netherlands to the U.S. in the two weeks leading up to Valentine’s Day this year.
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U.S. consumer prices excluding food and energy rose 0.2% in January from the previous month. (WSJ)
Germany’s economy stalled in the fourth quarter as government and household consumption slowed. (Dow Jones Newswires)
Canadian National Railway plans to shut down operations in eastern Canada as anti-pipeline blockades stop train passage through a key transportation corridor. (WSJ)
The U.S. charged China’s Huawei Technologies and two of its U.S. subsidiaries with racketeering and conspiracy to steal trade secrets. (WSJ)
Cisco Systems expects its quarterly revenue to decline as global economic uncertainty slows business technology investment decisions. (WSJ)
Strong pet-food sales helped push Nestlé’s net annual profit to $12.9 billion, up 24.4%. (WSJ)
Walmart is shutting its Jetblack personal-shopping service after failing to find investors for the operation. (WSJ)
Online furniture retailer Wayfair is cutting about 3% of its workforce. (WSJ)
Japanese e-commerce conglomerate Rakuten sold $1.4 billion in shares in technology holdings on concerns about valuations in the sector. (Nikkei Asian Review)
U.K. retailer Marks & Spencer plans to close two large distribution centers next year in an overhaul of its logistics strategy. (Daily Mirror)
South Korea’s SM Line is working with Maersk Line and Mediterranean Shipping Co. on the trans-Pacific. (Splash 247)
Indian and Bangladeshi scrapyards are refusing to allow Chinese crews to disembark at recycling locations. (Lloyd’s List)
Cargo growth at the Port of Rotterdam slowed last year. (Journal of Commerce)
Imports at the Port of New York and New Jersey rose 2.6% in 2019 to 3.8 million twenty-foot equivalent units. (DC Velocity)
A California judge denied a preliminary injunction sought by Uber and Postmates in a lawsuit challenging the state’s new gig-economy law. (San Francisco Chronicle)
California carrier Rodgers Trucking is shutting down. (Business Insider)
Amazon bought a 119-acre site in Bolingbrook, Ill., that once housed a mall and indoor amusement park for $50.5 million. (Crain’s Chicago Business)
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