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LogisticsLogistics

Supply Chains in Demand; Defining American-Made; Shifting Energy Trade

By Paul Page

 

A Foxconn factory in San Jeronimo, Mexico. PHOTO: PAUL RATJE/BLOOMBERG NEWS

Countries ranging from Mexico to India and Cambodia are stepping up their competition for a greater role in the world’s reconfiguring supply chains. China-based business executives are in high demand as they circle the globe looking for factory space or local tie-ups to reduce their dependence on China and its vast factory floor. The WSJ’s Jason Douglas and Stella Yifan Xie report governments are pulling out the stops to welcome the businesses, as they seek to turbocharge economic development and create millions of new jobs. The competition is part of a broad realignment of supply chains that is only now taking shape and has the potential to change the way goods are manufactured and shipped in the coming years. The countries are competing on subsidies, tax breaks and other perks to convince businesses that they can duplicate the well-oiled manufacturing machine that China has honed over decades.

  • Mattel is maintaining some production in China even as it launches manufacturing in Mexico, as the toy maker focuses on flexibility in a volatile geopolitical environment. (The Economist)
 
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Supply Chain Strategies

The QCells solar energy manufacturing factory in Dalton, Ga. PHOTO: MEGAN VARNER/REUTERS

Efforts to build a green energy supply chain in the U.S. are running up against a tough question: what exactly does it mean to be “made in the U.S.?” What qualifies as made in America is one of the biggest questions still hanging over the U.S. law offering hundreds of billions of dollars in tax credits and other incentives for clean-energy projects. The WSJ’s Phred Dvorak reports the issue goes to the heart of the complexity of supply chains, given that almost all clean-energy projects require at least some parts that are manufactured overseas. That has spurred tussles among companies including steelmaker Nucor and power company NextEra Energy as they angle for green dollars. It’s also hanging over Virginia-based power company AES, which says it is ready to order more than $1 billion in solar panels, if a manufacturer will commit to building a factory in the U.S.

  • Ford expects to lose about $3 billion on its electric-vehicle business this year. (WSJ)
 
 
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Quotable

“We’ve for too long let our supply chains drift overseas, particularly to China.”

— John Podesta, senior adviser to President Biden for clean energy
 

Commodities

North Africa’s massive oil-and-gas reserves and proximity to Europe make it an attractive alternative to energy supplies from Russia. PHOTO: APP/ZUMA PRESS

The transforming global energy supply chain is turning toward North Africa. Global oil-and-gas giants including Halliburton and Chevron are among those ramping up their presence there after years of underinvestment in the region. The WSJ’s Chao Deng and Benoit Faucon report that the energy companies are betting it is worth drilling again in some of the hardest places to do business as demand from Europe grows. Western oil executives say they see a more stable political climate in countries such as Libya, where fighting between local militias has been subdued following nearly a decade of civil war. Investments in projects such as a $1.4 billion oil field and refinery in Libya supported by Halliburton and Honeywell International have the potential to provide another boost for the booming tanker sector. Libya has the largest known oil reserves in Africa and Algeria holds the third-largest recoverable shale resources in the world.

  • Frontline owner John Fredriksen won a seat on the board of rival tanker operator Euronav. (Splash 247)
 
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Number of the Day

1%

United Nations Conference on Trade and Development forecast for annual growth in goods trade in the first quarter.

 

In Other News

Sales of new homes in the U.S. rose in February for the third straight month. (MarketWatch)

New filings for unemployment claims in the U.S. decreased slightly in the past week. (WSJ)

Japanese industrial conglomerate Toshiba plans to go private in a $15 billion deal with investors. (WSJ)

Quarterly sales revenue at General Mills rose 13% as higher prices offset flat volumes of food purchases. (WSJ)

Walmart is laying off hundreds of workers as it cuts back operations at five fulfillment centers. (Reuters)

European lawmakers agreed to rules setting targets and incentives for maritime operators to slash emissions from fuel in the coming years. (Maritime Executive)

Germany’s Port of Hamburg was closed to large ships as unionized workers began a one-day strike. (The Loadstar)

Annual operating profit at the parent of Orient Overseas Container Line jumped 37% to $10.1 billion despite declining box volumes. (Port Technology)

Values of bulk shipping’s largest vessels are rising rapidly. (TradeWinds)

A hacker group gained access to customer data at the Maersk Line website. (ShippingWatch)

The Port of Virginia expects to expand rail capacity at the Norfolk International Terminals by 35% by next year. (Progressive Railroading)

Hundreds of truck drivers say Miami-area carrier Flagship Transport has stopped paying them and isn't responding to the operators. (CBS Miami)

Three companies announced plans to build distribution centers totaling a combined 1 million square feet in West Columbia, S.C. (Post & Courier)

A survey found a growing share of companies plan to increase their spending on supply chain technology this year. (DC Velocity)

The U.S. Marine Corps rewrote its plans for wartime logistics for the first time in more than 25 years. (Breaking Defense)

 

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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