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Deadlock at the Ports; Resetting Ship Alliances; Rail’s Growth Sidetracked
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Container ships at the Port of Los Angeles. PHOTO: MARIO TAMA/GETTY IMAGES
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Turning the calendar has done nothing to get West Coast port labor talks moving again. Labor and management negotiators haven’t made progress since the summer on the relatively narrow issues that have stalled the talks. The WSJ Logistics Report’s Paul Berger writes the impasse is delaying discussion of major contract provisions like wages and automation. It also looks likely to extend the talks beyond the time it took to get a deal during the highly contentious 2014-2015 negotiations. There is far less heat around these talks, but the more than 22,000 dockworkers at 29 ports in the longshore union have been working without a contract since mid-summer. That casts a measure of uncertainty on dockside operations
as importers begin to map out shipping plans for the coming months. Lack of progress as this year’s peak season nears could raise pressure on the White House to help break the deadlock.
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A Mediterranean Shipping Co. ship at the Port of Los Angeles. PHOTO: BLOOMBERG NEWS
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Container shipping’s sprawling alliances are due for an overhaul. A.P. Moeller-Maersk and Mediterranean Shipping Co. are dropping their vessel-sharing partnership known as 2M. The WSJ’s Costas Paris reports the decision, effective in 2025, comes as global trade demand is weakening and freight rates are in free-fall, putting the shipping sector under new stresses after nearly three years of booming business. Maersk and MSC struck their agreement in 2015 and rivals have formed similar deals in a bid to save on operating costs. 2M, the Ocean Alliance and THE Alliance now control about 75% of global container-shipping capacity, squeezing
smaller operators in major markets. With the world’s two biggest shipping lines now breaking up, carriers in the remaining alliances may seek new partners. They may also follow the lead from Maersk and MSC executives who said dropping the operating cooperation will give them more room to pursue their separate strategies.
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A Union Pacific terminal in Oakland, Calif., last month. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Profit engines are running quieter at the major U.S. railroads. Executives at Norfolk Southern and Union Pacific are offering tepid outlooks for 2023, the WSJ’s Costas Paris reports, as they brace for a slowdown in demand for manufactured goods and other products along with higher costs. Norfolk Southern is projecting essentially flat business this year, reflecting what CEO Alan Shaw says is the “uncertainty of a challenging landscape.” UP’s fourth-quarter earnings slipped in part because higher operating costs outweighed slim volume growth and stronger pricing. Rail carload traffic has been growing this year, but the intermodal business that includes retail trade is off and a
sharp decline in shipments is a warning signal about weakness in housing markets. The freight railroads also expect wage costs to increase following a new labor agreement, adding momentum to double-digit growth in operating expenses that the carriers saw late last year.
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Union Pacific suspended traffic between Los Angeles and Chicago that use a damaged bridge in New Mexico. (Journal of Commerce)
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Canadian National is forecasting weaker-than-anticipated earnings growth this year after fourth-quarter revenue rose 21%. (Dow Jones Newswires)
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CSX reported better-than-expected profit in its fourth quarter. (Dow Jones Newswires)
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$3,007
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Average revenue per carload for automotive shipments carried by Union Pacific in the fourth quarter, a 17% increase from the year before.
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Striking Amazon workers outside the company’s warehouse in Coventry, U.K. PHOTO: HENRY NICHOLLS/REUTERS
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The labor unrest sweeping across the U.K. and other European economies is reaching warehouses. Workers at an Amazon site in central England went on strike this week, the WSJ’s Trefor Moss reports, signaling potential further disruption for the company in one of its most important overseas markets. Union leaders have already vowed to extend strike to other Amazon facilities in the U.K. in a dispute over pay. Britain has been experiencing its biggest strikes in decades this winter, and workers in France, Germany and Italy have also taken industrial action in recent weeks. Amazon says it employs over 70,000 people in the U.K. Union officials say the mood among Amazon workers in Britain has soured
since the company announced it was closing three U.K. facilities amid a broader logistics retrenchment. Amazon also says it plans to open two new U.K. facilities within three years, creating 2,500 jobs.
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Striking ground handlers forced the cancellation of passenger and freighter flights at Berlin Brandenburg Airport. (Simple Flying)
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The chairman of U.K. retailer Marks & Spencer says "baffling" plans to ease post-Brexit trade will raise costs for supermarkets and their suppliers. (The Telegraph)
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Germany’s government expects the country's economy to grow this year. (WSJ)
Boeing is maintaining plans to increase jet production and deliveries this year despite lingering supply-chain challenges. (WSJ)
Tesla plans a $3.6 billion expansion of its battery and electric-vehicle plant near Reno, Nev. (WSJ)
Tesla reported a record quarterly profit of nearly $3.7 billion for the fourth quarter even as vehicle deliveries slowed. (WSJ)
Australian battery maker Recharge Industries is offering to buy collapsed U.K. supplier Britishvolt. (Financial Times)
SteelAsia Manufacturing and China Baowu Steel Group are building a $2 billion plant in the Philippines. (Nikkei Asia)
Hapag-Lloyd took a 35% stake in India port terminal operator J M Baxi Ports & Logistics. (Dow Jones Newswires)
Abu Dhabi’s AD Ports will work with Turkish steel producer Tosyali on a range of shipping and logistics services. (Splash 247)
Australian logistics software supplier WiseTech Global is buying port trucking-focused transport software provider Envase Technologies. (DC Velocity)
German warehouse-equipment maker Jungheinrich bought Indiana-based logistics automation company Storage Solutions. (Dow Jones Newswires)
Video game retailer GameStop is closing its Shepherdsville, Ky. distribution center. (WDRB)
Milo’s Tea is building a $130 million manufacturing and distribution facility in Spartanburg, S.C. (Associated Press)
Camera buffs are coping with a shortage of 35mm color film. (Vice)
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