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Supply Chains Roil Shopping; Securing Freight Rail; Seeking New Cycles
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PHOTO: LUKE SHARRETT/BLOOMBERG NEWS
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Today's newsletter was written by WSJ Logistics Report's Jennifer Smith.
Supply-chain costs are undercutting Kroger’s sales boost from the pandemic home-cooking boom. The grocery chain says the push to keep its shelves stocked is squeezing profit, the WSJ’s Jaewon Kang reports, as prices for most products rise and inflation-wary consumers search for ways to stretch their budgets. Kroger’s same-store sales rose 14% from the previous year and the company raised its full-year guidance. But net profit fell nearly 24%, in line with results from other food retailers that are spending more to source and deliver products. The grocer is using more warehouse space and paying higher prices for transport and other services. Kroger is trying to balance the push for profit with
the need to meet anxious consumers halfway. The company is rolling out more personalized discounts, store brands and larger packaging, even as it raises prices for items people have historically been willing to pay up for.
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A Norfolk Southern intermodal train at the Port of Savannah, Ga., in October. PHOTO: OCTAVIO JONES/REUTERS
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Rail operators have new federal marching orders for handling cybersecurity attacks. The Biden administration will require most U.S. freight and passenger rail systems to report certain such incidents within 24 hours of discovering them, the latest effort aimed at prodding private industries to shore up their defenses in the face of mounting ransomware and other offenses. The WSJ’s Dustin Volz and David Uberti write that the new directives will affect some 80% of freight rail systems that are considered vital to economic and national security. The measures also require firms to complete cyber-vulnerability assessments and response plans. Similar rules are being imposed on big airports and airline operators. The
directives follow attacks that disrupted the East Coast’s largest fuel pipeline for days and shut down production at meat processor JBS, as well as a 2017 incident that hobbled operations at ocean shipping giant A.P. Moeller-Maersk.
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A Kent Bicycles assembly line in Manning, S.C. PHOTO: MICAH GREEN/BLOOMBERG
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Inflation keeps cycling upward in one corner of the transportation sector. Bicycle makers beset by rising components and shipping costs are stepping up prices for next year’s models, the WSJ’s Jason Douglas reports, as consumer demand stays strong and border closures tied to the Omicron variant complicate the supply-chain outlook. People hopped on bikes in droves during initial pandemic lockdowns, yet another rapid switch in consumer demand during Covid that knocked manufacturers and retailers off balance. Shortages drove up bike prices in the U.S. by as much as 54% in September compared to 2019. But prices for handlebars, brake levers and other parts have jumped, pushing up the cost of production as shippers
grapple with skyrocketing ocean transport rates. Electric bicycle makers are also competing with other sectors for scarce batteries and chips as supply issues limit businesses’ ability to capitalize on cycling’s newfound popularity.
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$2.93
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Average price per-mile for dry-van transport on the U.S. truckload spot market in November, including fuel surcharges, a record high in DAT Solutions records dating to 2015 and up 57 cents since January.
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The number of Americans filing new claims for unemployment benefits remains near pandemic lows. (WSJ)
OPEC and Russia-led oil producers agreed to continue pumping more crude. (WSJ)
China’s aviation authority issued a directive that brings the Boeing 737 MAX closer to returning to Chinese skies. (WSJ)
Australia became the latest U.S. ally to pass a human-rights sanctions law styled after the Magnitsky Act. (WSJ)
The Federal Trade Commission sued to block Nvidia’s proposed takeover of chip-design specialist Arm. (WSJ)
Dollar General plans to add 1,110 stores next year and open more of its pOpshelf stores selling higher-end goods. (Dow Jones Newswires)
Retailer Lands' End expects to incur about $15 million in added supply chain-related expenses in the fourth quarter on rising airfreight and inbound shipping costs. (Dow Jones Newswires)
A global shortage of cotton is worsening rapidly due to a delayed harvest in the U.S., the largest exporter. (Nikkei Asia)
The U.S. is doubling duties on Canadian softwood lumber to roughly 18%. (Engineering News-Record)
U.S. furnishings giant Ashley Furniture bought truckload carrier Wilson Logistics for an undisclosed sum. (Journal of Commerce)
The Sean John apparel brand founded by musical artist Sean Combs filed for Chapter 11 bankruptcy protection. (Ad Age)
Footwear merchant Allbirds has boosted its inventory 55% to get ahead of potential shortfalls. (Supply Chain Dive)
Amazon is extending to Europe its Freight Partner program enlisting small trucking companies. (The Information)
Food distributor Sysco plans to electrify 35% of its private fleet by 2030. (Transport Dive)
The Panama Canal Authority plans to impose a “greenhouse gas emissions fee” on vessels. (Maritime Executive)
Kirby Inland Marine will pay $15.3 million to settle charges over an oil spill in the Houston Ship Channel in 2014. (Ship & Bunker)
Transport Intelligence projects the global logistics market will grow 12% on an annual basis this year, and 2.3% over the 2019 level. (ShippingWatch)
Clive Data Services says global airfreight volumes contracted 1.2% from October to November. (Air Cargo News)
James Squires will retire as Norfolk Southern chief executive and chairman and Chief Marketing Officer Alan Shaw will succeed him as CEO. (Progressive Railroading)
Cushman & Wakefield expects high demand for warehouse space to continue through 2023. (DC Velocity)
Logistics technology provider 3PL Central acquired CIO Technologies and its CartRover software connecting e-commerce order software to fulfillment management systems. (Modern Materials Handling)
Amazon is building several utility-scale wind and solar power projects around the world. (Progressive Grocer)
Amazon plans to build a 2.8 million-square-foot distribution center in Daytona Beach, Fla. (WESH)
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