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Tanker Prices Surging; Retailing’s Unsettled Outlook; PCs Power Down
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A tanker offloads oil at a terminal at China’s Yantai port last month. PHOTO: CFOTO/ZUMA PRESS
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The cost of shipping oil between the world’s ports is surging, providing a boost to tanker operators while continuing to inflate energy prices. Shipbroker Clarksons says average tankers have earned more than $40,000 a day for four months, their longest such stretch in 15 years. And the WSJ’s David Uberti reports the spot price for very large crude carriers recently surpassed $115,100 a day, an eleven-fold increase from last year. The soaring costs are running counter to drivers in the oil sector, where a gloomy outlook has dragged down crude to near its lowest levels of the year. But the fallout from Russia’s invasion of Ukraine is redrawing the world’s supply maps for oil. Tanker experts say
many shipments now spend five times longer in transit to refineries or wholesalers than they would have before the conflict, straining capacity in the global fleet.
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“There doesn’t appear to be any practical upper limit on how high our rates can go.”
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— Anthony Gurnee, CEO of tanker operator Ardmore Shipping
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Best Buy is one of several chains that warned over the summer of a likely spending pullback from pandemic favorites such as home appliances. PHOTO: MICHAEL REYNOLDS/SHUTTERSTOCK
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The supply and demand picture for retailers heading into the holidays is only getting more complicated. Best Buy and Dick’s Sporting Goods reported mixed results in the most recent quarter, the WSJ’s Sarah Nassauer and Dean Seal report, as part of what Best Buy CEO Corie Barry calls an “uneven and unsettled” consumer market. That is complicating inventory planning in a sector looking to boost sales even as companies cope with overstocked shelves. Inventories at Best Buy are down 15% compared with last October, signaling tighter control of stocks, but comparable sales also tumbled 10.4%. Dick’s inventories were up 35% from a year ago, but the merchant’s sales were also higher
and the company says comparisons to last year’s constrained inventory environment are misleading. Instead, Dick’s says its relatively stronger inventory position at the end of June allowed it to meet robust demand during the back-to-school season.
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“Our inventory is healthy and well-positioned.”
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— Navdeep Gupta, chief financial officer at Dick’s Sporting Goods
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HP is expecting a slump in demand to continue. PHOTO: SIMON DAWSON/BLOOMBERG NEWS
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The global market for personal computers is powering down at a rapid pace. PC heavyweight HP is slashing its workforce by up to 10%, saying it expects a sharp slump in demand to stretch into next year. The WSJ’s Denny Jacob reports the payroll reduction of up to 6,000 employees is part of a broader overhaul aimed at achieving $1.4 billion in annualized cost savings. It came after rival Dell Technologies reported sales in its unit that includes laptops and desktops fell 17% last quarter and said the decline would accelerate this quarter. The slump in PC sales, along with declining demand for related high-value goods like semiconductors, is hitting transportation demand. The
International Air Transport Association says global airfreight traffic fell 10.6% in September. Gartner says global PC shipments fell at the fastest pace in more than two decades, and the manufacturers’ outlooks suggest things are getting worse.
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Freight forwarder DB Schenker is reducing its chartered flights because of declining airfreight demand. (Air Cargo World)
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The number of container ships waiting off the ports of Los Angeles and Long Beach on Tuesday, acccording to the Marine Exchange of Southern California, which declared the notorious vessel backup over after more than two years.
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Norfolk Southern will pay around $1.62 billion to acquire a railway line that it now leases from the city of Cincinnati. (WSJ)
The head of a rail union predicted Congress would step in to avert a freight rail strike. (MarketWatch)
Workers at a FoxConn iPhone assembly plant in China clashed with police after protests erupted at the factory. (WSJ)
Chinese e-commerce major JD.com is cutting executive salaries. (WSJ)
South Korea’s LG Chem will build a $3.2 billion plant in Tennessee to make materials for electric-vehicle batteries. (Nikkei Asia)
Home-furnishings seller United Furniture Industries abruptly laid off all its employees and ordered all its over-the-road truck drivers back immediately as part of a shutdown. (WXII)
Major shipping lines say they will pass along to customers the costs of complying with Europe’s new Emissions Trading System. (The Loadstar)
PepsiCo UK will start using fuel derived from cooking oil to power its trucks. (Food Navigator)
ShipMatrix says United Parcel Service and FedEx are delivering more than 96% of their packages on time this month. (Dow Jones Newswires)
Package carriers say they have enough capacity to handle this year’s holiday shipping. (Associated Press)
Semiconductor maker GlobalFoundries named former Cisco executive Ashlie Wallace senior vice president of global supply chain. (Supply Chain Dive)
Zebra Technologies named Tami Froese chief supply-chain officer as the warehouse tech provider wrestles with troubles in its supply chain. (Dow Jones Newswires)
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The Logistics Report newsletter will take a break for Thanksgiving and will be back in inboxes on Monday. Please check our website for breaking developments.
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