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Logistics Hiring Retreats; Shein’s New Marketplace; Tesla’s Faded Factory

By Paul Page

 

FedEx is among companies that have cut payrolls in the past year. PHOTO: ANGUS MORDANT/BLOOMBERG NEWS

Payrolls in the goods-distribution arena are starting to get in line with dimming logistics activity. Package carriers, freight companies and warehouse operators cut more than 14,000 jobs in the U.S. last month, the WSJ Logistics Report writes, accelerating a decline in employment in a sector where businesses were competing fiercely for workers barely more than a year ago. The pullback follows trends in the broader economy, where the hiring growth in the service sector is far outpacing job expansion at goods-producing companies. The retreat in logistics hiring suggests that businesses are aligning their operations for a muted peak shipping season after sharp and abrupt shifts over the past three years in imports and consumer demand. The Logistics Managers’ Index has dropped to a record low for four straight months and the Global Port Tracker estimates that U.S. imports in the first half of year were down 22%.

  • Hiring in the U.S. slowed in June but wages rose and the unemployment rate fell. (WSJ)
  • The Teamsters union says differences over wages for part-time workers are a major hurdle in talks with trucker Yellow. (Supply Chain Dive)
  • Striking unionized dockworkers and employers at British Columbia ports resumed their negotiations. (CBC)
 
 

Quotable

“Up until last year, the carriers started hiring peak-season workers early, even in August. I don’t see that kind of urgency this year.”

— Parcel industry consultant Cathy Roberson
 
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E-Commerce

Workers ironing Shein T-shirts at one of the fast-fashion giant’s subcontractors in China. PHOTO: GILLES SABRIÉ FOR THE WALL STREET JOURNAL

Fast-fashion’s surprising new behemoth is preparing to take on some of the biggest names in e-commerce. Discount Chinese apparel seller Shein is pivoting from selling just its own branded apparel to becoming a marketplace platform for a wide range of third-party sellers. The WSJ’s Shen Lu writes the company, now based in Singapore, is recruiting sellers after launching its marketplace in Mexico, Brazil and the U.S., with plans to roll it out in Europe later. But by opening up to third-party sellers and general merchandise, Shein is introducing complexities to its established supply chain. Analysts say it requires discipline to manage other merchants and ensure adequate logistics for tens of thousands of new products. Shein is entering a part of e-commerce dominated by Amazon and its sprawling logistics network, and will go head-to-head against Temu, which uses Chinese third-party sellers to ship extremely low-price wares to shoppers worldwide.

  • A former Amazon warehouse operations manager in Georgia was sentenced to 16 years in prison for stealing $9.4 million from the company. (USA Today)
 
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Manufacturing

Tesla’s factory in Buffalo was built by New York state. MALIK RAINEY FOR THE WALL STREET JOURNAL

Not all factory investments turn into crucial fixtures in goods supply chains. New York has spent nearly $1 billion on Elon Musk’s ambitious plan for what was supposed to be the largest solar-panel factory in the Western Hemisphere. Eight years after the ceremony launching construction in Buffalo, N.Y., the WSJ’s Julie Bykowicz and Ted Mann write that the solar-energy unit behind the plan is averaging just 21 installations a week and most of the workers at the site are lower-paid desk-bound data analysts working on other Tesla business. The suppliers that then-Gov. Andrew Cuomo predicted would flock to a modern manufacturing hub never showed up and most of the solar-panel manufacturing equipment the state bought has been sold off or scrapped. The gap between promised activity and production comes as America’s governors are swept up in an arms race of awarding packages of taxpayer money to attract industrial megaprojects.

  • Some U.K. manufacturers frustrated by customs delays and added bureaucracy since Brexit are investing in European operations. (Reuters)
 
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Number of the Day

5.9 Million

Forecast loaded container imports, in 20-foot equivalent units, into major U.S. ports in the third quarter, down 8.3% from last year’s July-September period, according to the Global Port Tracker.

 

In Other News

Producer prices in China fell at the fastest pace in more than seven years. (WSJ)

President Biden is expected to nominate former Federal Aviation Administration deputy chief Mike Whitaker as head of the regulator. (WSJ)

The U.S. Postal Service raised the price of a First-Class stamp by 3 cents to 66 cents. (WSJ)

Bed Bath & Beyond is abandoning an effort to find a buyer for the Buybuy Baby retail chain that would continue to operate at least some of the stores. (WSJ)

The International Maritime Organization adopted a compromise plan targeting emissions but included loose timing and vague wording on goals. (Lloyd’s List)

The IMO plans to adopt a carbon pricing mechanism by 2025 once it has studied potential plans. (TradeWinds)

A Romanian port is being swamped with grain shipments as a deal to allow Ukraine exports through the Black Sea nears collapse. (Reuters)

California awarded $1.5 billion in grants to upgrade the state’s ports. (Sourcing Journal)

The Dutch government won a legal battle to reduce the number of flights at Amsterdam’s Schiphol airport. (Financial Times)

Levi Strauss direct-to-consumer revenue rose 13% in the second quarter while wholesale revenue fell 22%. (Retail Dive)

A new report identifies human rights violations and environmental abuses by Chinese-invested companies involved in mineral supply chains. (Supply Chain Brain)

Louisiana-based Dupré Logistics acquired rival freight broker Interstate Transport. (Transport Dive)

Japanese diaper-materials supplier Nippon Shokubai is switching its manufacturing business to electric-vehicle batteries. (Nippon Asia)

 

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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