Trouble viewing this email?  View in web browser ›

The Wall Street Journal. The Wall Street Journal.
LogisticsLogistics

China’s Rail Sidetracked; Australia Digs Deeper; Consumers Pushing Back

By Paul Page

 

A freight train from Chongqing, China, arrives in Vilnius, Lithuania in April 2020. PHOTO: XINHUA/ZUMA WIRE

Russia’s attack on Ukraine is sidetracking China’s ambitions to export more goods to Europe. Europe-bound rail shipments from China that pass through Russia have been plummeting, the WSJ’s Costas Paris reports, dealing a setback to the $4 trillion Belt and Road initiative aimed at cementing China’s role as a pre-eminent trading force. Although the European Union hasn’t officially banned imports passing through Russia, freight forwarders increasingly are shipping away from the rail corridor to avoid the risk of getting caught up in sanctions. That is a blow to operations that moved around $82 billion worth of Chinese exports into the EU by rail in 2021, a 10-fold increase since 2016. The Ukraine war could also shift sentiment on projects in Europe aimed at expediting Chinese cargo. Germany’s port of Duisburg plans to stop business activity in Belarus and sell its 39% stake in a Europe-Asia rail business.

Here are recent developments following Russia’s invasion of Ukraine:

  • Western leaders vowed to investigate alleged war crimes in Ukraine and impose new penalties on Moscow as Russia continued attacks on the port city of Odessa and other sites. (WSJ)
  • Pressure is growing in the European Union for increased sanctions on Russia, including restrictions on energy imports. (WSJ)
  • Growing numbers of tankers carrying Russian oil are turning off their radio signals to avoid detection on the seas. (WSJ)

For the latest updates from Russia and Ukraine, click here.

 
Advertisement
LEAVE THIS BOX EMPTY
 

Commodities

Rare earths produced by Australia's Lynas Rare Earths. PHOTO: MELANIE BURTON/REUTERS

Australia is taking steps to extend rare-earths supply chains beyond China. Mining company Iluka Resources will use a government loan to build a roughly $900 million refinery at a mining site in Western Australia, the WSJ’s Rhiannon Hoyle reports, potentially providing new capacity to supply some 9% of the world’s market for materials that are critical for a wide range of electronics. It’s the third project approved under the country’s loan program for the minerals sector as Australia and the U.S. seek to shore up supplies of rare earths that now are dominated by China. That market dominance has become a growing security concern. China’s market weight gives Beijing potential sway over makers of various fast-growing technologies. The country in December merged the assets of state companies, creating a single rare-earths titan that is aimed at maintaining China’s influence in the market.

 
Share this email with a friend.
Forward ›
Forwarded this email by a friend?
Sign Up Here ›
 

Quotable

“It’s another sign of how challenging it is to do business in California.”

— Oakland A’s President David Kaval, on a suit by shipping industry groups against a waterfront ballpark project.
 

Economy & Trade

PHOTO: STEFANI REYNOLDS/AGENCE FRANCE-PRESSE/GETTY IMAGES

American consumers are pushing back harder against inflation at stores. Shoppers are cutting their spending on household staples from toothpaste to baby formula, the WSJ’s Sharon Terlep reports, as inflation hits a swath of the economy that had thus far proven resistant to substantial price increases. Analysts and retailers say that shoppers are buying staples in smaller quantities, switching to cheaper, store-name brands and more rigorously hunting for deals. The shift is especially pronounced among lower-income consumers who splurged on household products during the heights of the pandemic. The shift suggests that segments of supply chains that had powered through an upheaval in retail sales may be faltering as prices rise. Part of the shift is because private-label options are more available now after high demand and supply-chain problems led manufacturers to shift production to pricier, higher-margin name brands.

 

Supply Chain Strategies

Birkenstock says it has an obligation to protect its brand. PHOTO: JOHN MACDOUGALL/AGENCE FRANCE-PRESSE/GETTY IMAGES

A retail tug-of-war among suppliers is underway in the footwear aisle. Chunky-sandals specialist Birkenstock is pressuring retailers to stop selling similar styles from other brands, the WSJ’s Suzanne Kapner reports, putting the onus on its commercial customers to help block copycats cutting into its own sales. The request marks an unusual case of a supplier asking its buyers to intercede on its behalf, and it appears to be having an impact. Retailers including Nordstrom and Zappos have stopped carrying some of the styles, which are sold by brands such as Mephisto, Naot, Freedom Moses and Viking Sandals. Mephisto’s CEO calls the tactic “competitive bullying” and says he’s seen orders canceled for models his company had been shipping for years. Companies go to great lengths to protect their brands, and many police online sales. Birkenstock stopped selling directly to Amazon in 2016 and will block third-party sales starting in August.

 
Advertisement
LEAVE THIS BOX EMPTY
 

Number of the Day

4.57

National ratio of loads on the spot truckload market to available trucks in March, down from 7.33 in February and the lowest level for the ratio since January 2021, according to DAT Solutions.

 

In Other News

Shipping-industry groups are asking a California court to halt plans by the Oakland A’s baseball team to build a stadium at the city’s port. (WSJ)

New U.S. orders for manufactured goods slipped 0.5% in February, the first monthly decline in 10 months. (Dow Jones Newswires)

Shanghai extended Covid-19 lockdown measures that have disrupted shipping and manufacturing operations. (WSJ)

U.K. financial regulators is reviewing last month’s breakdown in nickel trading through the London Metal Exchange. (WSJ)

Global coffee products supplier Westrock is going public through a merger with a special-purpose acquisition company. (WSJ)

Car rental agency Hertz will buy up to 65,000 electric vehicles over five years from Swedish auto maker Polestar. (WSJ)

A backup of container ships off the Shanghai and Ningbo ports has grown to 140 vessels. (Lloyd’s List)

Officials will remove nearly 5,000 containers from the Ever Forward in a new effort to refloat the vessel stuck in the Chesapeake Bay. (WJZ)

Clarkson says prices for new vessels at shipyards are rising at the fastest pace in two decades. (Splash 247)

Vietnamese steelmaker Hoa Phat is building a factory to expand into sea container manufacturing. (The Loadstar)

Incoming APM Terminals chief executive Keith Svendsen says he is on the lookout for acquisitions and investments to back “moderate growth.” (ShippingWatch)

PSA International acquired the Ceres container terminal at Canada’s Port of Halifax from Nippon Yusen Kabushiki Kaisha. (Port Technology)

BNSF Railway says it is moving to improve service to agriculture shippers following complaints to federal regulators about Class I services. (Progressive Railroading)

Autonomous middle-mile delivery operator Gatik will work with ChargePoint to build electric-vehicle charging stations across North America. (Transport Dive)

Alaska Airlines has canceled dozens of flights amid a dispute with its unionized pilots. (Seattle Times)

 

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, @pdberger. and @LydsOneal. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
Desktop, tablet and mobile. Desktop, tablet and mobile.
Access WSJ‌.com and our mobile apps. Subscribe
Apple app store icon. Google app store icon.
Unsubscribe   |    Newsletters & Alerts   |    Contact Us   |    Privacy Policy   |    Cookie Policy
Dow Jones & Company, Inc. 4300 U.S. Ro‌ute 1 No‌rth Monm‌outh Junc‌tion, N‌J 088‌52
You are currently subscribed as [email address suppressed]. For further assistance, please contact Customer Service at sup‌port@wsj.com or 1-80‌0-JOURNAL.
Copyright 2022 Dow Jones & Company, Inc.   |   All Rights Reserved.
Unsubscribe