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LogisticsLogistics

Trade Under Siege: Vessels Wary of Red Sea; U.S.-Mexico Bridges Closed

By Paul Page

 

Containerships moving through the Suez Canal. PHOTO: REUTERS

Shipping companies are in no rush to return to the Red Sea now that the U.S. has pieced together a multinational task force to protect commercial traffic. A.P. Moller-Maersk quickly said it still plans to send its vessels around the Cape of Good Hope in southern Africa instead, and others plan to follow the longer path. The WSJ’s Costas Paris, Joe Wallace and Gordon Lubold report the response shows that shipping firms, oil companies and insurers remain jittery following missile and drone attacks by Houthi forces in Yemen—including two on Monday. The attacks have occurred near a stretch called Bab el-Mandeb, or the Gate of Tears. Stephen Gordon of Clarksons says traveling from Asia to Northern Europe around the southern tip of Africa extends journey times to 40 days from 31 days. It also takes twice the fuel to go around Africa, adding tens of millions in costs.

  • Container lines are imposing new surcharges to account for longer voyages around Southern Africa. (The Loadstar)
  • Maersk CEO Vincent Clerc says it could take weeks for a U.S.-led naval operation to make the Red Sea safe again for its ships. (TradeWinds)
  • Appliance supplier Electrolux set up a task force focused on alternatives to transport through the Suez Canal while IKEA warned of potential production shortages. (Reuters)
 
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Quotable

“Everybody and their grandmother is inside Costco during the holidays. The lines are spilling out into the aisles. It’s insane.”

— Shiana Warren, who delivers for Uber Eats, Instacart and DoorDash
 

Transportation

Members of the Mexican Army at the Union Pacific International Railroad Bridge at Piedras Negras, Coahuila state, Mexico, in October. PHOTO: ALEJANDRO CEGARRA/BLOOMBERG

Railroads and their shipping customers are urging the U.S. to quickly reopen several bridges that have been closed along the U.S. border with Mexico. American immigration authorities took the unusual step of closing several crossings and ports of entry in an effort to contain a surge in illegal migration that is overwhelming border communities in Texas, Arizona and California. The WSJ’s Alicia A. Caldwell and Santiago Pérez report that Customs and Border Protection closed a pair of Texas railway bridges, including one in Eagle Pass that is a major point for cross-border commerce. The National Grain and Feed Association called for the crossings to be reopened as the closure is affecting the flow of grains and oilseeds to “one of the United States’ most important export markets and trading partners.” Union Pacific says the closed sites represent 45% of the railroad’s cross-border business and “there isn’t enough capacity at our other four gateways to reroute them.”

 

Number of the Day

113.7

The American Trucking Associations’ for-hire truck tonnage index for November, down 1% from October and off 1.2% from a year ago in the ninth straight annual decline.

 

In Other News

Construction of new homes in the U.S. rose in November at the fastest pace since May. (MarketWatch)

FedEx cut its full-year outlook after quarterly revenue slipped 2.6% to $22.2 billion. (WSJ)

DHL Express and Teamsters members reached a tentative agreement that ends a 12-day strike at the Cincinnati airport. (Dow Jones Newswires)

American air-traffic-control facilities are short on controllers, leading to delayed flights and adding potential safety risks. (WSJ)

Volkswagen reached a deal with workers on job cuts that will help the automaker save up to $4.37 billion next year. (WSJ)

The European Union and the U.S. will extend a truce on steel and aluminum imports for 15 months. (BBC)

Foxconn launched two experimental satellites as part of its push into the space industry. (Nikkei Asia)

AI-generated Amazon product reviews are inaccurately describing some items and exaggerating negative feedback. (Bloomberg)

Turkish industrial parts supplier Norm Fasteners is adding its first U.S. plant outside Lansing, Mich. (Modern Distribution Management)

Bulk vessel owner Harim Group was named the preferred bidder for South Korean flag carrier HMM. (Korea Herald)

Japan’s Mitsui OSK Lines ordered five LNG-fueled bulk vessels for transports between Australia and Asia. (Splash 247)

Deutsche Bahn expects to complete the sale of its freight forwarding business DB Schenker next year. (ShippingWatch)

Referral and signing bonuses for truck drivers have declined over the past year. (Trucking Dive)

BWT Logistics is buying North Carolina-based freight broker International Express Trucking. (DC Velocity)

Longtime Penske Logistics executive Jeff Jackson will replace the retiring Marc Althen as president. (Commercial Carrier Journal)

 

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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