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New Threat to Food Supply Chains; Tesla Accelerates Europe Expansion

By Paul Page

 

A U.N.-chartered ship loads grain at Port Yuzhne, east of Odessa on the Black Sea coast. PHOTO: OLEKSANDR GIMANOV/AGENCE FRANCE-PRESSE

Russia’s withdrawal from the Black Sea grain shipping agreement is raising concerns about global food supply chains. The deal that was signed a year ago helped stabilize the flow of commodities including wheat, corn and sunflower oil following Russia’s invasion of Ukraine, the WSJ’s Jared Malsin writes, after Ukrainian exporters were allowed to resume shipments from three ports around the city of Odesa. The World Food Program bought more than 80% of its wheat this year from Ukraine through the initiative and has used the deal to charter ships carrying grain for crisis-hit countries including Sudan, Somalia and Afghanistan. Moscow now is shutting down the maritime corridor used by grain ships and will no longer guarantee safety for vessels in the northwestern Black Sea. Operations in the shipping corridor have all but stopped, with no new ships authorized to operate since June 27, according to the U.N.

  • Russia escalated economic hostilities with the West with the seizure of local operations of Carlsberg and Danone. (WSJ)
 
 

Quotable

“Any supply disruption to Spain will be felt as higher prices for consumers on European supermarket shelves approximately four months from now.”

— Michaël Tanchum, a food security expert and a fellow at the Middle East Institute
 

Ukraine has exported more than 32 million tons of food products since last August. In a video report, the WSJ looks at what led to the end of Black Sea export and the prospects for resuming trade flows. 

 
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Supply Chain Strategies

Tesla’s factory outside the German capital. PHOTO: SEAN GALLUP/GETTY IMAGES

Tesla is accelerating its expansion in European electric-vehicle supply chains. The automaker is seeking approval to double the size of its factory in Berlin after only 15 months of operations at the site. The WSJ’s William Boston reports the growth would give the site capacity to produce up to one million electric cars a year, potentially making it the largest auto manufacturing facility in Germany. It’s the latest sign of the rapid growth in EV supply chains, from the mining of minerals to the assembly lines. Tesla produces its Model Y electric SUVs at the plant, which opened early last year, and it was the bestselling vehicle in Europe in the first quarter. Tesla held only 2.6% of the overall European car market in the first five months of the year, but the factory expansion suggests it is in a hurry to grow.

  • Ford is slashing prices for its electric F-150 Lightning pickup up to nearly 17%, amid swelling inventories and softening demand. (WSJ)
 
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Number of the Day

346,000

Loaded container exports through the Port of Hong Kong’s main Kwai Tsing Container Terminals in June, in 20-foot equivalent units, 24.1% below the level in June 2022, according to Hong Kong Marine Department figures.

 

In Other News

A measure of U.S. consumer sentiment jumped this month at the fastest pace since 2005. (MarketWatch)

New York state manufacturing activity expanded at a slower pace this month. (MarketWatch)

FedEx named former Atlas Air CEO John Dietrich as its chief financial officer, replacing Michael Lenz. (WSJ)

U.S.-based companies won relief from two pieces of the global minimum tax deal, and the changes will delay or reduce the taxes they are set to pay abroad. (WSJ)

Barnes & Noble Education warned that its long-term viability may be in jeopardy if the textbook seller can’t improve its liquidity. (WSJ)

A bankruptcy judge approved the sale of nearly 200 David’s Bridal stores out of bankruptcy to Cion Investment. (WSJ)

United Parcel Service began training management employees to carry packages in case the Teamsters union strikes. (Barron’s)

The head of the Teamsters says he asked the White House not to intervene if UPS workers walk out. (Associated Press)

Japan and India are discussing cooperation on building semiconductor and hydrogen fuel supply chains. (Nikkei Asia)

The U.K. became the 12th member of a Pacific trade alliance as China and Taiwan press their efforts to join the group. (Reuters)

DHL Supply Chain began operating Boohoo’s 1.1 million-square-foot distribution center near Elizabethtown, Pa., the U.K. fashion retailer’s first U.S. warehouse. (PennLive)

Belgian officials are considering barring night flights at Brussels Airport, potentially restricting freighter operations. (The Loadstar)

U.K. shipbroker Clarksons is in talks to acquire rival Maersk Broker. (TradeWinds)

 

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 Twitter at @WSJLogistics.

 
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