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Retail’s In-Store Distribution; Freight vs. Passengers; Seoul Crushing Strike

By Paul Page

 

Packages sorted for delivery at at the Macy's flagship store in New York City, PHOTO: JEENAH MOON/BLOOMBERG NEWS

The lines between stores and distribution centers are blurring more than ever this holiday season. More retailers are packing up goods in stores for online orders, the WSJ Logistics Report’s Liz Young writes, as they try to speed along shipments and make more use of their brick-and-mortar properties. Macy’s, Ulta Beauty and Tilly’s are among merchants that have embraced the tactic lately, joining companies including Best Buy and Nordstrom that have advanced variations on the ominchannel strategy. Supply-chain experts warn executing in-store fulfillment carries big challenges ranging from inventory management to training store workers. Ulta Beauty uses 116 of its 1,350 stores to package orders, a sign of the care needed to get sites primed for delivery. Macy’s solution has been to carve out dedicated fulfillment centers within 35 of its U.S. stores, creating what the retailer says is the equivalent of 1 million square feet of distribution space.

 

Quotable

“Recession fears have caused people to say, ‘We’re not going to spend $12 million on a warehouse. What can we do cheaply?’”

— Brendan Witcher, principal analyst at Forrester Research
 
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Transportation

A Union Pacific train moves through Houston in September. PHOTO: BRANDON BELL/GETTY IMAGES

Freight railroads are facing another conflict in their operations, this time with rail passengers. Amtrak is asking federal regulators to investigate Union Pacific over delays its freight trains have inflicted on a route from New Orleans to Los Angeles. The WSJ’s Ted Mann reports the filing at the Surface Transportation Board is Amtrak’s first use of a provision in a 2008 statute to enforce the right of passenger trains to take preference over freight railroads. It’s the latest salvo in a continuing confrontation on the tracks as the passenger service seeks to use new infrastructure funds and White House support to expand train service outside its traditional Northeast stronghold. The provisions in the 2008 law allow for “metrics and standards” to measure whether the freight railroads are meeting their obligations. Amtrak’s first claim is over a service that is its worst-performing route in the country.

 
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Economy & Trade

Trucks parked at a terminal of the Inland Container Depot in Uiwang, South Korea. PHOTO: HEO RAN/REUTERS

Commodity by commodity, South Korea is trying to get its truck drivers back on the road. Seoul is targeting industries crucial to its industrial economy as it orders more striking truckers to end their walkout, the WSJ’s Jiyoung Sohn reports, as the government tries to limit damage to the national economy and to supply chains tied to its big trade sector. South Korean President Yoon Suk-yeol this week expanded a back-to-work order to include the steel and petrochemical industries, after issuing a similar order for the cement sector last week. It is the first time such orders have been used since the government began allowing for them in cases when the national economy is at risk. South Korea is one of many countries where workers across a range of industrial and transport sectors are demanding better pay and working conditions as the costs of goods and services rise.

 
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Number of the Day

1,230,291

Intermodal containers and trailers handled by U.S. railroads in November, down 5.4% from the same month last year but up 15.8% from October, according to the Association of American Railroads.

 

In Other News

Initial unemployment claims in the U.S. ticked upward last week. (WSJ)

Cotton prices have fallen 47% since hitting an 11-year high in May. (WSJ)

Gasoline prices in the U.S. have fallen below the level of a year ago. (WSJ)

Miners are striking deals to sell lithium at prices that are adjusted more frequently. (WSJ)

A letter from Foxconn’s founder played a major role in persuading China’s leadership to loosen the country’s strict Covid policies. (WSJ)

Car dealers say demand for new vehicles may be slipping. (WSJ)

Tesla sold a record of more than 100,000 China-made electric vehicles in November. (WSJ)

Meal-kit company Blue Apron plans to lay off about 10% of its corporate workforce and cut spending. (WSJ)

Industrial conglomerate Tata Group plans to start making semiconductors in India within a few years. (Nikkei Asia)

South Korea’s Hyundai Motor and SK Innovation will build a large electric-vehicle battery plant northwest of Atlanta. (Reuters)

The U.S. Defense Department gave a $50 million contract to self-driving truck startup Kodiak Robotics to automate military vehicles. (CNBC)

Victoria’s Secret is shifting goods from air to ocean as container rates fall. (Supply Chain Dive)

Large mining companies are holding production guidance steady for the coming year. (Lloyd’s List)

Mediterranean Shipping will use Belgium’s Liege Airport as its hub for air cargo operations. (Air Cargo World)

Less-than-truckload rates are holding steady despite falling freight volumes. (Journal of Commerce)

Swedish autonomous truck maker Einride raised $200 million in Series C equity backing and $300 million in debt funding. (TechCrunch)

California-based Pactum raised $20 million from investors including Maersk Line’s venture arm to support its software automating supplier negotiations. (Bloomberg)

Supply-chain issues have left the U.S. Marine Corps without various items for uniforms. (Marine Times)

 

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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