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Racing for Construction Customers; Paring Back Inventories for Profits

By Paul Page

 

Building-materials companies are competing more aggressively for construction and remodeling professionals. PHOTO: WAYNE PERRY/ASSOCIATED PRESS

Competition in the construction-supplies sector is turning into a delivery race. Industrial materials supplier Ferguson is building a warehouse network aimed at getting goods to project sites and professional contractors more rapidly. The WSJ Logistics Report’s Liz Young writes the aim is to bring some of the speed and efficiency of consumer retail delivery to the construction market, a sector marked by volatile demand in recent years. Overall U.S. construction spending is on the upswing, but residential construction has slowed as high interest rates bite into demand. Ferguson’s plan is to add a network of smaller warehouses across North America to get more of its plumbing and heating materials closer to projects. The company has four of those facilities and plans to add three more by next year. Home-improvement retailer Home Depot is also pushing that professional market with its plan for distribution centers dedicated to bulky construction materials.

  • Nearly half of Amazon and Walmart warehouse workers who participated in a survey say they feel like they’re being watched at work. (Seattle Times)
 
 
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Quotable

“It’s imperative that we mitigate risks like geopolitical strife and trade fragmentation to maintain economic growth and stability.”

— World Trade Organization head Ngozi Okonjo-Iweala, on a report projecting that world trade will rebound this year and next.
 

Supply Chain Strategies

Lands’ End sells most of its goods online, but operates 26 stores. PHOTO: LANDS’ END

Lands’ End is betting that slashing its inventory will help swing the company back to profitability. The casual clothing retailer has been in the red on an annual basis for two straight years following a pandemic-driven roller coaster that boosted demand and pushed more merchandise through its supply chain. The WSJ’s Kristin Broughton reports Lands’ End now is focused on carrying less stock and updating its offerings more frequently with new fabrics and fits. The idea is to improve gross margins, not necessarily sales volume, by keeping fewer goods in stock to go through price-cutting cycles. Lands’ End trimmed inventory by 29% over its past fiscal year, to $301.7 million. That was also well below the $569.2 million in inventory the retailer held in the quarter ending in July 2022, when consumer spending was shifting and companies were scrambling to pare their stocks.

  • Lamb Weston’s shaky transition to a new enterprise resource planning system battered its inventory management and cut into the food supplier’s sales. (Supply Chain Dive)
 
 

Number of the Day

2,145,341

U.S. container imports in March, up 15.7% from the year before and 20.6% above the prepandemic level in March 2019, according to Descartes.

 

In Other News

Consumer inflation in the U.S. rose 3.5% last month from a year ago. (WSJ)

Delta Air Lines expects strong summer travel demand after swinging to a $37 million profit in the first quarter. (WSJ)

U.K. grocer Tesco is projecting rising profits on improving consumer demand as inflation tapers off. (WSJ)

Embattled fashion retailer Esprit is in talks with an international private-equity firm on prospective investment. (WSJ)

Taiwan’s exports jumped 18.9% in March, the fastest pace in two years. (Bloomberg)

Authorities plan to open a third temporary channel to the Port of Baltimore this month. (Associated Press)

The Global Port Tracker projects container imports into major U.S. ports will grow 11% in the first half of this year. (Logistics Management) 

Rates in new trans-Pacific container contracts are coming in substantially below initial asking prices. (Splash 247)

Malaysia’s Port Klang plans to nearly double container capacity in coming decades to lure maritime trade from neighboring Singapore. (Nikkei Asia)

Sri Lanka’s Hambantota International Port began container operations as an alternative to Colombo. (The Loadstar)

Six senior executives have left tanker and dry-bulk ship operator Norden in the past month. (ShippingWatch)

Truckers Schneider National and C.R. England and equipment makers Cummins, Paccar and Daimler Truck took part in a $120 million funding round for fleet management tech provider Platform Science. (DC Velocity)

A joint venture of Chevron and Bunge broke ground on an oilseed processing facility in Louisiana. (Biodiesel)

 

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 X at @WSJLogistics.

 
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