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FedEx’s Singular Structure; Walmart’s Supply-Chain Bets; Russia's Jets
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The FedEx Express main hub at Memphis, Tenn., International Airport. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS
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FedEx is hoping a changed business structure makes the company more efficient and better aligned with a changing parcel market. The delivery giant is combining its Express and Ground delivery units into a single business, the WSJ’s Esther Fung reports, in a departure from the divided structure that has been championed by founder Fred Smith and derided by investors and analysts. FedEx CEO Raj Subramaniam says the move will help the parcel carrier adjust to a business model driven by e-commerce instead of one largely focused on business-to-business services. More immediately, it should mean a single point of service rather than having separate Ground and Express trucks serving the same location.
That will mean blending an Express labor force with a Ground operation that works under a contractor model. FedEx expects the reorganization to be done next summer and integrating the air-ground network will take several years.
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“What I’m saying is, we want to make fewer trips to Mars.”
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— FedEx Ground CEO John Smith, on a projection that drivers at various FedEx units will cover 3.4 billion miles this fiscal year, or the equivalent of 100 trips to Mars.
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Walmart has set a goal of moving 55% of fulfillment-center volume through automated facilities. PHOTO: GEORGE FREY/GETTY IMAGES
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Walmart is stepping up investments in supply chain and technology as the retailer reshapes its distribution network. The company expects to expand operating profits faster than sales growth over the next three to five years. The WSJ’s Jinjoo Lee writes in a Heard on the Street column that the bullish outlook is driven in part by investments that Walmart believes will reduce costs and result in better delivery speed and accuracy. The retailer more than doubled its capital expenditures on supply chain and technology compared with 2017. Much of the spending is targeted at improving fulfillment capabilities at its stores. Walmart has already seen faster picking speeds on online orders, and it is trying to automate
more of those operations both in stores and at dedicated fulfillment centers. The investments in automation come as Walmart is trimming its labor force at its distribution centers.
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Aviation, a major pillar of Russia’s economy, is profoundly dependent on Western assistance.
PHOTO: MARINA LYSTSEVA/REUTERS
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Russia’s commercial aircraft fleet is running late for a checkup. Hundreds of Russian jets from Western suppliers have reached maintenance milestones without access to the parts, software and technical skills needed to carry out critical maintenance. The WSJ’s Benjamin Katz and Georgi Kantchev report U.S. and European sanctions have cut off Russian carriers from contact with jet makers Boeing and Airbus, along with maintenance partners and many of the suppliers for the planes’ key parts, from engines to landing gear. Russian airlines have kept flying amid buoyant demand for domestic flights, but the maintenance issues are raising safety concerns among industry executives and
regulators. The Western aircraft are due for both biannual checks and more intensive “D” checks due every six to 10 years. The concerns over maintenance are separate from the freighters operated by Russian carriers that have been grounded by restrictions on aircraft lessors.
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Commodities traders Cargill, Louis Dreyfus and Viterra are winding down their grain export operations in Russia. (Agence France-Presse)
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19,000
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Net orders for Class 8 heavy-duty trucks in North America in March, down 11% year-over-year and off 18% from January in the fifth decline in the past six months, according to FTR.
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