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LogisticsLogistics

Winning Mexican Suppliers; Labor’s Amazon Foothold; Battlefield Logistics

By Paul Page

 

A truck parts factory in San Luis Potosi, Mexico. PHOTO: MAURICIO PALOS/AGENCE FRANCE-PRESSE

Mexico is looking like a big winner in an ongoing effort to make supply chains more resilient. Procurement technology firm Jaggaer says it’s seeing a sharp upturn in bids going to Mexican suppliers, the WSJ Logistics Report’s Lydia O’Neal writes, while Asia factories that formed the backbone of globalization are seeing purchasing bids pull back. The 514% annual increase for Mexican factories last year comes as more companies look at resetting their supply chains following a series of shocks that highlighted the fragile nature of global supply networks. Many are studying big actions such as shifting factory locations to get closer to end users, a process labeled near-shoring. Such shifts can take years and billions of dollars to put into place, however. The new data shows more immediate movement in fundamental decisions in procurement and sourcing that make up the building blocks of supply chains.

 
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E-Commerce

Workers at Amazon's Staten Island warehouse lined up to vote in the union election last month. PHOTO: JUSTIN LANE/EPA-EFE/SHUTTERSTOCK

Organized labor has a long-sought foothold at America’s signature e-commerce and logistics giant. An Amazon warehouse workers’ vote in New York is the first major union victory at the nation’s second-largest private employer. The results are galvanizing activists who have already gained votes at two other Amazon facilities, the WSJ’s Sebastian Herrera and Allison Prang report, and have stepped up their efforts as Amazon has expanded its logistics footprint and become a pacesetter for logistics wages and hiring. Amazon says it is evaluating options that could include filing objections over the role of federal labor regulators in the vote. Still, the vote could prompt other workers to follow suit after a period of heavy stress in logistics operations, the WSJ’s David Harrison writes. The pandemic highlighted the critical role workers such as warehouse employees and drivers plau in the economy, often for relatively low pay.

 
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Quotable

“What they were actually trying to do was logistically bonkers.”

— Phillips O’Brien, professor of strategic studies at the University of St. Andrews in Scotland, on Russia’s military operations in Ukraine
 

Supply Chain Strategies

The destroyed An-225 Mriya freighter aircraft at the Antonov airport near Kyiv, Ukraine. PHOTO: VADIM GHIRDA/ASSOCIATED PRESS

Russia’s faltering invasion of Ukraine is providing a vivid lesson in military logistics, but not one that Moscow had intended. Western intelligence assessments suggest Russia’s failure to supply and maintain troops in the field has critically hobbled its war effort. The WSJ’s Stephen Fidler and Thomas Grove report the logistics shortcomings come in fundamental areas of warfare principles, including the inability to transport fuel and ammunition as well as food and clothing for soldiers at the front. Military logistics has often complemented developments in private-sector supply chains, including strategies and technology.  Some military experts say Russia’s tactics in its multipronged offensive contrast with recent U.S. military actions that devoted far greater resources to logistics and the transportation of essential materials. One expert says military planners may have been misled by the “lavish logistical system” employed by the U.S. that may have made such operations appear deceptively easy.

 

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

Ukraine authorities and independent rights groups say they are uncovering evidence of war crimes perpetrated by Russian forces, including mass graves of civilians, and Russia-launched missile attacks on the critical port city of Odessa. (WSJ)

Russia’s factories cut production and jobs in March while prices rose sharply and new orders declined. (WSJ) 

Shipping containers are piling up at the Port of Rotterdam as dockworkers refuse to handle Russian cargoes. (Bloomberg)

Container line CMA CGM is preparing to acquire industrial logistics operator Gefco from majority owner Russian Railways. (The Loadstar)

European natural-gas prices slipped as trader nervousness about Russian President Vladimir Putin’s threat to cut exports eased. (WSJ) 

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

 

Transportation

Zipline uses 11-foot wide, fixed-wing drones to parachute-drop packages. PHOTO: ZIPLINE

Delivery drones are already looking for landing spots. After years of hype about flying robots dropping orders at your doorstep, the WSJ’s Christopher Mims writes in a Keywords column that a handful of companies have started commercial operations in the U.S. involving dozens or hundreds of deliveries a day at each location. The companies are vying to be Americans’ choice for super-quick deliveries, once federal regulators enable broader rollouts. The operations by companies like Zipline, Flytrex and the Wing unit of Google parent Alphabet are still small in scale. But the operations mean that regular people now can try these services in some locations. The companies, using different technological approaches and business models, are demonstrating that the industry has worked out some of the kinks that have delayed widespread drone delivery. That suggests that drone research is closer to having a meaningful impact on the expedited delivery business.

 
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Number of the Day

4,900

Decline in U.S. trucking payrolls from February to March, the first drop in 22 months, according to the Bureau of Labor Statistics

 

In Other News

The U.S. economy added 431,000 jobs in March and the share of Americans looking for jobs ticked up. (WSJ)

Growth in U.S. factory activity slipped to its lowest level in 18 months and a measure of new orders tumbled 7.9 points. (MarketWatch)

The pace of wage growth in the U.S. has cooled over recent months. (WSJ)

Eurozone inflation jumped a record 7.5% in March. (WSJ)

Western nations and their allies have agreed to join the U.S. in releasing oil from their reserves. (WSJ)

U.S. auto sales pulled back in the first quarter as supply-chain disruptions weighed on factory production. (WSJ)

Tesla expanded deliveries 68% in the first quarter from a year ago but the output of 310.000 cars was flat compared to the fourth quarter. (WSJ)

A bird-flu outbreak in the U.S. is triggering a surge in egg prices as stocks decline. (WSJ)

U.S. lawmakers will seek to iron out differences in legislation passed by the Senate and House to overhaul shipping regulation. (Reuters)

The U.S. is preparing to process Jones Act waivers for crude transport as it releases oil from its strategic reserve. (TradeWinds)

People with chronic illnesses and disabilities are struggling to secure needed medical equipment and medicines. (Washington Post)

Danish retailer Flying Tiger Copenhagen is suing freight forwarder DSV over high shipping rates and the lack of capacity. (ShippingWatch)

British authorities launched criminal and civil investigations into P&O Ferries over its firing of some 800 workers without notice. (The Guardian)

FedEx CEO Fred Smith says the carrier plans to put autonomous trucks on highways this summer. (CNBC)

Volvo Trucks North America will build its 126 electric vehicles for Maersk Line unit Performance Team at its Dublin, Va., plant. (Roanoke Times)

Amazon started using five heavy-duty electric trucks in its U.K. operations. (Motor Transport)

Vietnamese auto maker VinFast will build a factory in North Carolina to make electric cars. (Associated Press)

Freighter operator ASL Aviation is set to double its fleet with an order for 20 converted 737-800 aircraft. (FlightGlobal)

Hershey is cutting the number of products it distributes to cope with production challenges. (Supply Chain Dive)

Laos is using its strong regional rail connections​ to advance efforts to turn the capital city Vientiane into a Southeast Asian logistics hub. (Nikkei Asia)

 

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.

 
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