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Shippers Strike Back Against Fees; Chip Making Expands in India

By Paul Berger

 

Containers at the Port of Los Angeles. PHOTO: APU GOMES/AFP VIA GETTY IMAGES

Shippers are fighting back against carrier fees. Some importers were hit with huge extra charges during the Covid-19 pandemic on top of sky-high shipping costs as truckers struggled to pick up and return boxes on time, often for reasons beyond their control. Now, importers are taking advantage of changes introduced by the Federal Maritime Commission and the recent Ocean Shipping Reform Act to challenge the fees, the WSJ Logistics Report’s Paul Berger writes. Shippers say the new rules are helping them challenge the fees and that an increasingly muscular Federal Maritime Commission appears to be nudging carriers toward greater leniency. The FMC has received about 250 complaints under a new expedited claims process and almost $800,000 in fees has so far been refunded or waived. The regulator is also growing its roughly 130-person workforce by about one-third and intends to boost its oversight, enforcement and investigative activities.

 

Quotable

“I don’t like being a victim and I felt like I was victimized without recourse.”

— Ryan Frey, a lithium battery importer, on detention and demurrage charges.
 
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Manufacturing

An employee assembles and inspects mobile phone parts at a factory in Sri City, India.

PHOTO: KAREN DIAS/BLOOMBERG NEWS

A shift in major electronics supply chains is accelerating. Apple’s main manufacturer Foxconn Technology Group is considering tripling its Indian workforce to 100,000 people in a bid to expand its supply chains outside of China. The WSJ’s Rajesh Roy, Yoko Kubota and Philip Wen report that Foxconn could boost iPhone production at its existing plant in India and at new facilities to around 20 million units a year by 2024. Foxconn Chairman Young Liu recently visited several Indian cities and met with Prime Minister Narendra Modi as the company considers next steps. India has long trailed regional rivals in advanced manufacturing because of concerns over the country’s challenging bureaucracy, protectionist rules and underdeveloped infrastructure. But companies are open to new options as Apple presses suppliers to expand outside of traditional hubs after China’s Covid-19 lockdowns hurt production and as U.S.-China relations grow increasingly strained.

 
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Number of the Day

8.4%

Decline in U.S. intermodal volumes in February compared to a year ago, the 12th straight monthly drop, according to the Association of American Railroads.

 

In Other News

Federal Reserve Bank of San Francisco President Mary Daly says interest rates will likely need to be raised further and stay higher for longer. (MarketWatch)

U.S. officials are growing concerned that Chinese-made cranes at American ports could give Beijing a spying tool. (WSJ)

Artificial intelligence and semiconductor executives in China are playing a bigger role at political meetings as Xi Jinping’s priorities shift amid rising competition with the U.S. (WSJ)

Officials are investigating why a Norfolk Southern train left a track near Springfield, Ohio, on Saturday, the company’s second derailment in the state in recent weeks. (WSJ)

The freight railcar that federal investigators say likely caused last month’s derailment in Ohio was handed off among four railroads before its fateful trip. (WSJ)

Amazon is pausing construction on its second headquarters project near Washington, D.C., as part of cost-cutting measures. (WSJ)

Caterpillar has agreed to not close additional union-represented plants under a new tentative contract deal with the United Auto Workers union. (WSJ)

Boeing denied its CEO a bonus, citing production issues. (WSJ) 

Nordstrom is winding down and liquidating its operations in Canada under court protection, closing 13 stores and laying off about 2,500 workers. (WSJ)

A man survived at sea on a drifting sailboat for more than 20 days with nothing to eat but ketchup and seasoning. (WSJ)

Old Dominion Freight Line revenue fell in February as tonnage dropped. (Dow Jones Newswires)

Cars are giving the chip sector a boost as demand for other semiconductors uses wanes. (WSJ)

Ford Motor plans to increase production of six models this year, half of them electric. (Associated Press)

Chip supplier MKS Instruments expects at least a $200 million hit to revenue after a ransomware attack disrupted its supply-chain operations last month. (Supply Chain Dive)

Online grocery retailer Ocado is pausing the rollout of new distribution centers in the U.K. after reporting an annual loss the equivalent of $601 million. (The Guardian)

Lufthansa Cargo saw record revenue for the third year in a row, despite global trade demand falling 16% in December. (Air Cargo Next)

Environmental groups are calling on retailers like Walmart, Target and Home Depot to abandon polluting vessels. (Lloyd’s List)

CMA CGM reported a fourth-quarter profit of $3.04 billion, down 3.7% compared to the year-ago quarter. (TradeWinds)

DP World is investing $38 million at Brazil’s Port of Santos. (Splash 247)

 

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, @ByLizYoung and @PDBerger. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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