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Trucking Hits the Brakes; Foxconn’s Factory Standoff; Airbus Speeds Up
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The Love's Truck Stop in Springville, Utah. PHOTO: GEORGE FREY/AGENCE FRANCE-PRESSE
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Trucking companies see brake lights up ahead in what should be the sector’s peak shipping season. Domestic U.S. shipping demand is receding and freight rates are falling, the WSJ Logistics Report’s Liz Young writes, in a sign that shifting demand by overstocked retailers is unraveling traditional seasonal shipping patterns. The changes are cascading across freight operations, cutting into inbound shipping volumes and bringing fewer goods onto the roads. Trucking executives say the biggest impact so far has been on spot-market business, where one measure shows rates falling from August to September for the first time since 2015. Larger carriers that depend more on long-term contract business are more insulated.
But the weakness in spot demand is filtering into the bigger contract market. Trucking executives expect demand to pick up as those excess inventories are sold off, even if that doesn’t happen until after the holidays.
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The FBI and the securities regulators are investigating U.S.-based self-driving startup TuSimple over whether it improperly financed and transferred technology to a Chinese startup. (WSJ)
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Port truckers in Southern California are scrambling for loads with container imports declining. (New York Times)
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Ruan Transportation acquired Michigan-based dedicated carrier National Truck Brokers. (DC Velocity)
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Workers headed to the Foxconn plant in Zhengzhou in 2017.
PHOTO: IMAGINECHINA/ASSOCIATED PRESS
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China’s attempts to stamp out Covid-19 are creating big strains on one of the country’s crucial manufacturing operations. Apple supplier Foxconn Technology is scrambling to contain a weekslong Covid-19 outbreak at an iPhone factory in central China. The WSJ’s Wenxin Fan and Selina Cheng report the disruption is growing at Foxconn’s main Zhengzhou facility, the world’s biggest assembly site for iPhones. Hundreds of thousands of workers there have been placed under a closed-loop system for almost two weeks, largely shut off from the outside world. Many said they have been confined to their quarters for days and that distribution of food and other essentials has been chaotic. The
disruption at Foxconn is the latest example of the economic and social toll from China’s rigid pandemic policies, including rolling lockdowns and mass testing. The turmoil now threatens to reach one of the world’s high-value, high-stakes supply chains.
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The Airbus A320 assembly plant in Hamburg, Germany. PHOTO: MORRIS MACMATZEN/SHUTTERSTOCK
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Airbus is pushing its suppliers to catch up with the aircraft manufacturer’s ambitious new production plan. The European plane maker plans to ramp up output of its jets over the next year, the WSJ’s Benjamin Katz reports, despite persistent supply-chain disruption and difficulties among components makers in delivering parts. The company plans to lift production of its A320 aircraft to 65 a month by early 2024 from about 50 a month at the end of this year, an effort aimed at striking quickly as its narrow-body grabs market share from Boeing. Still, aerospace supply chains are still reeling from the historic downscaling at the start of the pandemic. Suppliers are scrambling to recover but still
face labor shortages and gaps in raw materials. The delivery delays are troubling both Airbus and Boeing, but Airbus doesn’t want to wait while it has an edge over its rival.
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Icelandair is seeking by the end of this decade to become the first national flag airline to operate all its domestic routes with emissions-free aircraft. (Financial Times)
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A Shein pop-up store in New York City last week. PHOTO: STEPHANIE KEITH/BLOOMBERG NEWS
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Online apparel retailer Shein is giving new meaning to the term fast fashion. The company is on track to generate revenue of $24 billion this year, the WSJ’s Jing Yang reports, putting it within striking distance of its biggest rivals just a decade since its founding in China. Shein, now based in Singapore, has a unique business model that has enabled the company to sell a large assortment of apparel directly to consumers exclusively online at ultralow prices. It says it sells 98% of the products it makes, leaving little inventory to waste. Production is based in Guangzhou, China, with a supplier network of more than 3,000 manufacturers, and ships from there. That puts delivery times behind its rivals, but
that is changing. The U.S. effort is scaling up with plans for three big distribution centers that will get goods to customers faster, and could speed up Shein’s growth.
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209,061
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Truck trailers moving intermodal operations in North America in the third quarter, down 27.7% from the third quarter of 2021, according to the Intermodal Association of North America.
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Supply Chain Sustainability
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Join us on Nov. 9 for a webinar on advancing supply-chain sustainability. Speakers include Sandra MacQuillan, executive vice president and chief supply chain officer at Mondelez International, and Ravi Anupindi, professor of operations and management at Michigan Ross. Sign up here.
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