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LogisticsLogistics

Disrupting Cross-Border Supply Chains; Crude Oil Prices Keep Gushing

By Paul Page

 

Trucks heading into the U.S. queue up in Mexico near the Zaragoza-Ysleta border crossing bridge last week. PHOTO: JOSE LUIS GONZALEZ/REUTERS

Disruptions at the U.S.-Mexico border are turning the commercial crossings into supply-chain chokepoints. Trucks and trains were delayed for several days over the past week amid a series of incidents tied to the surge of migrants trying to get into the U.S. The WSJ Logistics Report’s Paul Berger writes the disruptions were the latest in a series of bottlenecks and backups that have hit logistics operations even as manufacturers and importers look at moving their sourcing to Mexico to make their supply chains more resilient. Logistics executives say the trade flows across the border come with uncertainty, however, with political and economic tensions buffeting operations. One logistics operator said a customer that had shifted some manufacturing to Mexico kept some production overseas because of the persistent border backups. Companies say they shift goods to other crossings when bottlenecks arise, but that can be a complicated operation involving multiple companies.

  • Freight broker Uber Freight has added six offices and 1,000 workers in Mexico to meet cross-border demand. (Dow Jones Newswires)
 

Quotable

“There’s just too much uncertainty at the U.S.-Mexico border.”

— Jordan Dewart, president of Redwood Logistics Mexico
 
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Commodities

Investors have signaled they won’t pour money into companies seeking to increase drilling.

PHOTO: PAUL RATJE/AGENCE FRANCE-PRESSE/GETTY IMAGES

Don’t look for the fracking industry to come to the rescue of oil buyers. Surging global demand coupled with output cuts by Saudi Arabia and Russia have sent crude prices to levels not seen since last August, with some analysts projecting prices could soon hit $100 a barrel. The WSJ’s Benoît Morenne and Collin Eaton report that U.S. shale companies aren’t rushing to drill more, a break from past years when frackers flooded the market with crude. In the oil-rich U.S. Permian Basin, the number of rigs drilling for crude has declined by about 12% since the end of April, according to Baker Hughes—even as U.S. oil prices jumped by about $13 a barrel. Some executives say most shale producers plan to stand pat even as global oil prices increase further. At the pump, diesel prices ticked down last week for the first time in two months.

  • Rates for very large crude carriers are picking up after what analysts say was a “disastrous” September. (TradeWinds)
 
 

Number of the Day

258,419

Intermodal shipments carried by U.S. railroads in the week ended Sept. 23, up 1.2% from the same week a year ago and the highest weekly level for the box traffic since the week ended Oct. 29, 2022, according to the Association of American Railroads.

 

In Other News

Revised figures show the U.S. economy grew at a 2.1% annual pace in the second quarter. (MarketWatch)

United Parcel Service is buying MNX Global Logistics, adding to the growing logistics-sector investment in healthcare supply chains. (WSJ)

Citi says UPS is eyeing cuts to nondriver jobs after the signing of the company's contract with the Teamsters. (Dow Jones Newswires)

Federal prosecutors accused an agriculture data service of allowing meatpackers to illicitly share information and inflate prices. (WSJ)

Swedish electric-vehicle battery startup Northvolt plans to build a factory in Canada. (Financial Times)

Chinese smartphone maker Xiaomi is increasing production in India. (South China Morning Post)

Dubai has become the new operating hotbed for Russia’s shadow tanker fleet. (Splash 247)

Disrupted trade patterns have left some 150,000 empty shipping containers stuck in Russia. (The Loadstar)

Diana Shipping ordered two large bulk vessels with methanol fuel capability from a Chinese shipbuilder. (ShippingWatch)

U.S. regulators gave Zipline the authority to operate delivery drones beyond a worker’s line of sight. (Supply Chain Dive)

Spanish rail company Renfe tabbed a unit of Mediterranean Shipping to help it revive its faltering rail business. (Railway Gazette)

Miami-based Xtreme Holdings plans to launch an airline called 7Air Cargo with 737 freighters. (Cargo Facts)

Deutsche Bahn will sell its DB Schenker freight forwarding operation as a complete unit rather than break apart the business. (Air Cargo News)

Taiwan authorities fined golf ball manufacturer Launch Technologies for storing 30 times the legal limit of hazardous material after a major factory fire killed nine people. (Associated Press)

Hyzon Motors, maker of hydrogen fuel-cell electric vehicles, agreed to pay $25 million to settle securities fraud charges. (Reuters)

GE Appliances completed a $450 million upgrade of its dishwasher manufacturing plant in Louisville, Ky. (DC Velocity)

A food delivery robot company working for Uber Eats in Los Angeles gave police a video from one of its robots as part of a criminal investigation. (404 Media)

 

Executive Insights

Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful. They are unlocked for WSJ subscribers.

  • The race to hire warehouse workers and package carriers for the holidays is slowing to a crawl.
  • It’s photons over electrons in an effort to eke out better chip performance. 
  • Rite Aid is looking to close roughly 400 to 500 stores in its proposed bankruptcy, while a group of bondholders wants to liquidate more.
  • Fat and well-funded, U.K. pensions increasingly don’t need private-equity investments. 
  • 🎧 Jack Hartung, CFO of Chipotle Mexican Grill, talks about inflation and other financial pressures on the fast-casual restaurant’s business strategy. 
 

About Us

Paul Page is editor of WSJ Logistics Report. Reach him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on X at @WSJLogistics.

 
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