Trouble viewing this email?  View in web browser ›

The Wall Street Journal. The Wall Street Journal.

LogisticsLogistics

Sponsored by
Blue Yonder

Trucking’s Tight Capacity; Supply Chain’s Squeezed; Looking for Chips

By Paul Page

 

A truck stop in Greenville, S.C. PHOTO: RICHARD SHIRO/ASSOCIATED PRESS

There’s no relief in sight from a squeeze on truck availability that is buffeting U.S. shipping markets. Freight operators and their shipping customers say they are bracing for a capacity crunch to persist through the end of the year, the WSJ Logistics Report’s Jennifer Smith writes, leaving transportation costs high and supply chains scrambling to keep up with a surging American consumer economy. New truck orders have been rising, but those vehicles won’t enter fleets anytime soon and deliveries may be delayed further by the global semiconductor shortage. Truckers say they’re struggling to find drivers and many are raising pay while fleets and shippers alike appear to be depending more on freight brokerage operations to find capacity. Recent measures show spending on freight transport growing at nearly twice the rate of volumes, suggesting that trucking companies are in the driver’s seat when it comes to pricing.

 
Advertisement
LEAVE THIS BOX EMPTY
 

Supply Chain Strategies

Companies are ctiing the availability of shipping containers as one of the constraints on growth. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS

The tightness in U.S. supply chains goes beyond the highways. From factories to home builders, a growing array of companies say they are struggling with supply constraints, the WSJ’s Thomas Gryta and Theo Francis report, and that concerns including the availability of workers and rising raw materials prices could curb their growth in the short term. Experts say the challenges are part of the havoc in supply-and-demand patterns in the wake of the pandemic, with imbalances spreading across many sectors and businesses unable to catch up. Port congestion and a shortage of shipping containers are adding to the squeeze. Supply shortages should ease as global production picks up to meet demand, but companies are trying to avoid lost sales or market share. Companies like J.B. Hunt Transport are adding shipping capacity, but such investment carries costs that experts believe will be passed along to shipping markets.

 
Share this email with a friend.
Forward ›
Forwarded this email by a friend?
Sign Up Here ›
 

Quotable

“We continue to be operating in a very disruptive environment because of container shortages coming from Asia, port congestion, trucking shortages.”

— Chris Peterson, finance chief at consumer-products manufacturer Newell Brands
 

Manufacturing

PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS

A global chip shortage that has hobbled auto makers is reaching more sectors. Manufacturers of home appliances, heavy-equipment, servers and, well, even sex toys, are struggling with semiconductor stocks. The squeeze is even companies like freight operators and retailers that don’t use chips as their core business, the WSJ’s Eun-Young Jeong and Dan Strumpf report, as queues for the key components grow longer. The tight supply for many chips is likely to persist through this year, with the shortfalls leading to missed business opportunities in a global economic recovery that is gaining momentum. Freight railroad Kansas City Southern says cutbacks at Mexican automotive plants due to the semiconductor crunch were behind an 18% drop in first-quarter freight volume. More chips are on the way, with one forecast projecting a 13% increase in global shipments this year. But some widely used, inexpensive semiconductors are almost nowhere to be found.

 

Transportation

Mohammad Aisha and the MV Aman. PHOTO: THE WALL STREET JOURNAL

Mohammad Aisha began his work on the MV Aman facing a long stint at sea that he assumed would be limited by the terms of international seafarer contracts. The 29-year-old Syrian’s time on the bulk steamer finally ended last month after four years trapped on the vessel, often completely alone in a legal limbo after the ship was abandoned near the mouth of the Suez Canal following a financial dispute. The WSJ’s Joe Parkinson and Drew Hinshaw write that the ordeal of the Aman’s chief mate is an extreme example of a humanitarian issue weighing on the maritime industry, where it’s estimated that nearly 1,000 sailors were abandoned at sea last year. The seafarers are caught in the middle when ship owners operating in the gray areas of international simply abandon a vessel when they run out of money, leaving crew members unpaid and unable to get home or feed themselves.

 
Advertisement
LEAVE THIS BOX EMPTY
 

Number of the Day

$51 Billion

Approximate sales by U.S. food-delivery businesses in 2020, up by $28 billion from 2019, including $19 billion “purely from the pandemic,” according to an academic paper.

 

In Other News

U.S. household income rose at a record 21.1% pace in March while spending increased 4.2%. (WSJ)

Fresh data show the eurozone fell into a recession this winter but recent indicators suggest the economy is poised to bounce back. (WSJ)

Big oil companies are returning to profitability as they recover from the pandemic-driven destruction of oil and gas demand. (WSJ)

Creditors of Sears Holdings, including suppliers during the retailer’s bankruptcy, are still waiting for more than $80 million in payments. (WSJ)

Tesla is facing delays in getting production started at its Berlin gigafactory. (Reuters)

Groceries and restaurants are seeing salmon supplies shrinking. (Bloomberg)

Starbucks is considering helping suppliers who are struggling to add staff, including distribution and transportation providers. (Supply Chain Dive)

U.K. supermarket chain Tesco will offer supply-chain finance services to suppliers based on sustainability targets. (Logistics Manager)

Cargill says it has cut 1.5 billion gross metric tons of carbon emissions from its shipping operations since 2017. (MarineLInk)

The logistics arm of Chinese e-commerce platform JD.com won the go-ahead for a $4 billion initial public offering in Hong Kong. (Nikkei Asia)

Australia’s wheat exports more than doubled in the first two months of 2021. (Lloyd’s List)

France’s CMA CGM is ordering 22 containerships in deals with Chinese shipyards worth a total of $2.3 billion. (Splash 247)

Hyundai LNG Shipping has ordered seven liquefied natural gas carriers over the past month at a cost of $1.43 billion. (TradeWinds)

First-quarter profit at Cosco Shipping Holdings jumped to $2.39 billion as container line revenue nearly doubled. (Journal of Commerce)

Full-year profit at container line Ocean Network Express rose to $3.5 billion over the past fiscal year from $105 million the year before. (The Loadstar)

Port terminal manager DP World launched a wholesale digital trade platform in Africa aimed at facilitating trade. (Container Management)

Expedited trucker Forward Air agreed to acquire Atlanta-based J&P Hall Express. (CDL Life)

Walmart Canada is opening a distribution center in Moncton as part of its broader supply-chain investment in the country. (Supermarket News)

 

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, @jensmithWSJ, @CostasParis. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
Desktop, tablet and mobile. Desktop, tablet and mobile.
Access WSJ‌.com and our mobile apps. Subscribe
Apple app store icon. Google app store icon.
Unsubscribe   |    Newsletters & Alerts   |    Contact Us   |    Privacy Policy   |    Cookie Policy
Dow Jones & Company, Inc. 4300 U.S. Ro‌ute 1 No‌rth Monm‌outh Junc‌tion, N‌J 088‌52
You are currently subscribed as [email address suppressed]. For further assistance, please contact Customer Service at sup‌port@wsj.com or 1-80‌0-JOURNAL.
Copyright 2021 Dow Jones & Company, Inc.   |   All Rights Reserved.
Unsubscribe