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The Two-Canal Problem; Drones Gaining Lift; Resetting E-Commerce

By Paul Page

 

Some apparel companies shipped their spring fashions by air instead of sea to ensure items arrived on time. PHOTO: MARTIN BERNETTI/AGENCE FRANCE-PRESSE/GETTY IMAGES

Western importers are getting hit by two of the biggest concerns in supply chains today on different sides of the world. The Suez Canal and the Panama Canal, two crucial channels for global trade, have become major chokepoints, leaving ocean carriers and their shipping customers to shift operations. The WSJ’s Costas Paris reports that they’re also getting lessons in how to brace their supply chains for the impact of both geopolitics and climate change. A prolonged drought has slashed the number of crossings at the Panama Canal, leading to longer waits and heftier tolls. Traffic at the Suez is sparser than ever as Yemen’s Houthi rebels attack vessels and carriers take longer routes around Africa. Some shippers say they are absorbing the delays in part because of lessons from supply chaos during the pandemic. Now, says IKEA stores owner Ingka Group, stocks in warehouses “are in good shape.”

  • The U.S. sent a military logistical support vessel to assist with construction of a temporary port to handle Gaza relief shipments. (WSJ)
 
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Logistics Technology

Drones being checked for flight-worthiness at a Wing facility in Frisco, Texas. PHOTO: ANDY JACOBSOHN/AGENCE FRANCE-PRESSE/GETTY IMAGES

Delivery drone operators say their growths are clearer than ever as hurdles begin to fall away. U.S. regulators over the past year have given drone companies including Alphabet unit Wing and Zipline permission to fly their devices beyond an operator’s visual line of sight. The WSJ Logistics Report’s Liz Young writes the regulatory clearances are leading more retailers, restaurants and healthcare systems to expand existing drone delivery and launch pilot programs. Routine use of delivery drones in the U.S. has largely eluded operators as the technology has developed, although it is more widely used in some other countries. Logistics experts caution drones still have a long way to go before they become entrenched in commercial parcel distribution in the U.S. Cost of delivery remains a major concern, and the growing services may give operators a chance to see if both the technology and the economics can work.

  • Calgary-based last-mile delivery startup Ziing bought Metroland Parcel Services, its second acquisition this year. (Globe and Mail)
 

Quotable

“It’s not just hard to fly these drones on a technological level, on a regulatory level, it’s also just simply extremely hard to fly them in a cost-effective manner.”

— Matthias Winkenbach of MIT’s Center for Transportation and Logistics.
 
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E-Commerce

Temu was nearly unheard of a year ago. Now, the Chinese-founded e-commerce company has become the most-downloaded app in the U.S. A WSJ video report breaks down how its continued growth could redefine online retail, just like Amazon’s speedy delivery did.

 

Number of the Day

7.8%

Projected year-over-year growth in U.S. container imports into major U.S. ports in the first half of 2024, according to the Global Port Tracker, an upgrade from an earlier forecast of 5.3%. 

 

In Other News

The U.S. economy added 275,000 job in February. (WSJ)

Industrial production in Germany ticked up 1% in January. (WSJ)

The Justice Department is undertaking a criminal investigation of the blowout of a door on a Boeing 737 MAX on an Alaska Airlines flight. (WSJ)

An investigation shows shipping executive Angela Chao died after accidentally putting her Tesla in reverse and driving into a pond at her Texas ranch. (WSJ)

Goodyear Tire & Rubber will close a Malaysia plant at the end of June as part of a plan to cut costs by about $1 billion. (WSJ)

Meal-kit maker HelloFresh says investments in new fulfillment centers and production capacity are cutting into earnings. (WSJ)

Consumer-products distributor Unilever is targeting its suppliers and its customers in new, tougher emissions-cutting goals. (Bloomberg)

Tesla lagged behind its Chinese rivals in deliveries of electric vehicles in the country in the first two months of the year. (South China Morning Post)

Taiwan’s Yang Ming swung to a $43 million loss in the fourth quarter. (The Loadstar)

Prices in dry-bulk shipping’s largest capesize vessels jumped to a 12-week high. (TradeWinds)

Customs snarls in the Philippines are causing delays in imports that can last as long as a year. (Nikkei Asia)

American Eagle Outfitters took a $98.3 million charge on its Quiet Platforms logistics unit as the retailer “refocused” the operation. (Supply Chain Dive)

U.K. sports-fashion retailer Frasers is putting online luxury retailer Matches into administration just two months after acquiring it. (BBC)

Criminal gangs in Spain are targeting olive oil shipments as prices for the “liquid gold” rise. (Financial Times)

 

About Us

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

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on X at @WSJLogistics.

 
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