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Clearing Canada’s Trucks; Investing in Innovation; Bitter Cocoa Markets

By Paul Page

 

Truck traffic is moving again across a key U.S.-Canada border crossing as authorities consider how to prevent new disruptions. Prime Minister Justin Trudeau is invoking emergency powers to help end a long-running demonstration in Ottawa, the WSJ’s Paul Vieira and Vipal Monga report, and to address blockades that have affected border crossings in western Canada. Auto makers that had curtailed production during the blockade of the Ambassador Bridge at the border linking Detroit and Windsor, Ontario, say their operations are running without problems again. But some officials warn of longer-term impact if manufacturers reconsider the risks in their supply chains. Matt Moroun, chairman of the company that operates the Ambassador Bridge, said Monday that officials in the U.S. and Canada need to develop more robust plans that protect border crossings “and ensure that this kind of disruption to critical infrastructure will never happen again.”

 

Transportation

Trucks in Windsor, Ontario, head toward the U.S. Monday morning. PHOTO: GEOFF ROBINS/AGENCE FRANCE-PRESSE

Shipping delays and rising costs are hitting companies that trade across the U.S.-Canada border. The worries for importers and exports have grown as protests against Covid-19 vaccine mandates have escalated in Canada, according to freight industry firms, although it’s difficult to say how much the new restrictions and the demonstrations have contributed to the shifts at the border. Truckstop.com says spot-market prices to ship goods from Canada to the U.S. in standard heavy-duty trucks jumped 44% to $4.07 a mile in the month ending Feb. 5, and the rate for refrigerated trucks rose by a third over that period to $4.87. Freight-tracking-technology companies said retailers, including supermarkets and consumer-goods merchants, haven’t seen much impact, largely because they have more cushion with inventories than do manufacturers in just-in-time supply chains.

 
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Logistics Technology

An Attabotics “nest” for small robots inside a warehouse. PHOTO: THE BRAND HIGHWAY

The challenges locking down supply chains over the past two years are getting attention from young technology companies and investors. Growing numbers of startups are tackling the most basic dilemmas deep in the operations behind moving goods, and the WSJ’s Christopher Mims writes in a Keywords commentary that the solutions with the greatest promise to make a difference aren’t necessarily those getting the greatest publicity. Instead, innovations aimed at managing warehouses, tracking inventory and helping retailers position goods closer to customers offer important tools to improve the systems that make and move goods around the economy. Investment in tech-focused supply-chain companies totaled $24.3 billion in the first nine months of last year, almost 60% higher than for all of 2020, according to PitchBook. Companies like Attabotics, Veho and others are taking the investment and with their customers and partners adopting new strategies addressing the recent chaos in supply chains.

 
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Quotable

“You see cocoa futures going up and your chocolate bar is going to be more expensive.”

— Peter Mooses, a trader at RJO Futures
 

Commodities

A warehouse at a farmers' collective in central Ivory Coast. PHOTO: ISSOUF SANOGO/AGENCE FRANCE-PRESSE/GETTY IMAGES

This is turning into a bitter year for cocoa buyers. Dry weather in West Africa is triggering concerns over supplies from the key region for the commodity, the WSJ's Hardika Singh reports, boosting prices for the most actively traded futures by 8.4% so far this year and 8% in February alone. The bleak harvest outlook adds new challenges for chocolate makers and sellers already coping with rising labor and other costs, raising the likelihood that the troubles will filter through to consumer markets in higher prices for candy bars and other treats. Cocoa’s climb is the latest sign of volatility in commodity markets that has sent prices for raw materials on a roller-coaster and fractured price planning in supply chains. The price of sugar recently hit a four-year high even as candy makers like Hershey have struggled to increase production to meet surging demand during the pandemic.

 
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Number of the Day

1.078

Cass Freight Index for shipments in January, a 10.8% decline from December to its lowest level since July 2020.

 

In Other News

Japan’s economy rebounded with 1.3% growth in the fourth quarter. (WSJ)

Intel is close to a deal to buy Israeli chip company Tower Semiconductor for nearly $6 billion. (WSJ)

Lockheed Martin has scrapped plans to buy Aerojet Rocketdyne amid pressure from antitrust regulators over the proposed $4.4 billion deal. (WSJ)

Blackstone is selling its Mileway European last-mile logistics properties fund into a new Blackstone group that values the fund at $24 billion. (WSJ)

The U.S. suspended imports of Mexican avocados after an inspector in Mexico's principal producing state received a threatening phone call. (WSJ)

DoorDash will raise its fees on McDonald’s restaurants that are slow to prepare orders in a push to improve efficiency and cut losses. (WSJ)

3M says reduced demand for medical masks will slow its sales growth this year. (WSJ)

Sales of electric vehicles more than doubled in 2021 and China accounted for roughly half of EV sales. (Dow Jones Newswires)

China-based Apple supplier Luxshare Precision Industry is forming a joint venture to develop and make electric vehicles as a contract manufacturer. (Nikkei Asia)

Contract manufacturer Foxconn will make semiconductors in India under a new joint venture. (Economic Times)

Vietnam is keeping factories open even as the country reports record Covid-19 cases. (Reuters)

Bulk and crude exports from Black Sea ports are plummeting this month amid reports of an imminent Russian invasion of Ukraine. (Splash 247)

Robert Maersk Uggla, 43, will become chairman of A.P. Moller-Maersk and Jim Hagemann Snabe will step down as head of the maritime giant’s board. (Seatrade Maritime)

South Korean container line HMM’s net profit increased 40-fold last year to $4.4 billion as sales more than doubled to $11.5 billion. (The Loadstar)

A backup of about a dozen ships has formed off the Port of Virginia after weather-related closures. (Journal of Commerce)

Scorpio Tankers swung to a $234 million net loss in 2021. (ShippingWatch)

Crew abandonment cases in shipping more than doubled last year and are on track to exceed that level in 2022. (Lloyd’s List)

U.S. regulators are considering speeding up the process for issuing commercial driver’s licenses. (Logistics Management)

 

About Us

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

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

 
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