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LogisticsLogistics

Booking Freighter Passage; Seeding Higher Costs; Charging Car Parts

By Paul Page

 

A view from the decks of the Hatsu Crystal container ship. PHOTO: DOUG WALSH

Business in a decidedly niche corner of transportation remains on hold nearly two years into the pandemic. Operators of freight vessels still aren’t accepting passengers and show few signs that an option popular with adventurous travelers will return anytime soon. The WSJ’s Katie Deighton writes that some of the handful of travel agents specializing in booking passage on oceangoing freighters are barely hanging on, with cargo cruises still off-limits even as the wider cruise industry lurches forward. The agents have anxious customers waiting to get back on container ships and other vessels that have few comforts but unrivaled ocean views and long stretches removed from civilization. Some smaller shipping companies plan to wade back into the passenger market soon. But large shipping lines have postponed their freighter voyages for the year, amid concerns over Covid-19 outbreaks and the risks of being stuck at sea during supply-chain bottlenecks.

 
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Commodities

Phosphate fertilizer at a warehouse in Russia. ANDREY RUDAKOV/BLOOMBERG NEWS

Rising prices are hitting food supply chains at the very foundation of the agriculture business. High fertilizer costs are weighing on farmers across the developing world, the WSJ’s Jon Elmont reports, making it much more expensive to cultivate crops from avocado and corn to coffee. That is forcing many farmers to cut back on production, signaling global food-price bills could go higher this year after hitting decade highs in 2021. The sector is being hit in part by global energy costs, which can flow through into fertilizer prices. Major fertilizer producers including China, Turkey, Egypt and Russia have also curbed exports, further dimming supplies. Farmers in the U.S. are feeling the pinch, but the impact is likely worse in developing countries, where small farmers have limited access to bank loans. Rising prices and diminished food shipments would exacerbate hunger, which is already acute in some parts of the world.

 
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Quotable

“Soaring virus cases have brought the U.S. economy to a near standstill at the start of the year.”

— Chris Williamson, chief business economist at IHS Markit
 

Supply Chain Strategies

A lithium mine in Zimbabwe. PHOTO: TAFADZWA UFUMELI/GETTY IMAGES

Automotive manufacturers face a new challenge after accelerating their drive toward electric vehicles. Manufacturers now are trying to ensure that the supply chains for their most critical components can keep up. The WSJ’s Jacky Wong writes in a Heard on the Street column that many key battery materials, including processed lithium, are in short supply and that prices for the raw materials are rising sharply. Prices of lithium carbonate have quintupled in China from a year earlier, and other battery materials from nickel to cobalt have also been rising and could remain elevated as new supply will take time to come online. Shortages also are flaring in some lesser known battery components, adding to the risks of concentration in electric-vehicle supply chains already dominated by China. That has made securing material supplies more important as car makers seek to ensure they can keep production lines moving.

 
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Number of the Day

$4.88 Billion

Fourth-quarter freight revenue reported by Orient Overseas Container Line, a 101.4% increase from the same quarter in 2020, on a 16.9% decline in containers transported and a 142.3% increase in average revenue per container.

 

In Other News

Purchasing manager surveys show the U.S. and other economies slowing to start 2022 amid rising Covid-19 infection rates. (WSJ)

Ford shut off customer orders for its Maverick pickup truck because its production lines are strained. (WSJ)

Consumer-goods supplier Unilever plans to cut thousands of jobs as part of a reorganization aimed at speeding up its decision making. (WSJ)

Cathay Pacific faces deeper losses from tighter quarantine rules that are squeezing its cargo capacity. (WSJ)

Boeing is investing a further $450 million in its air-taxi joint venture with Google co-founder Larry Page. (WSJ)

South Korea's economy expanded at the fastest pace in 11 years in 2021 on surging exports. (Korea Herald)

Malaysia’s palm oil exports are slated to drop by around a third this month from December. (Dow Jones Newswires)

Experts say new U.S. factories under reshoring initiatives will use more automation and provide fewer jobs than advocates suggest. (Philadelphia Inquirer)

Canadian truckers are marching to Ottawa to protest a mandate that they be vaccinated against Covid-19. (Reuters)

Steel Dynamics says supply-chain and Covid-related problems have delayed the start of the company's new steel mill in Texas. (Dow Jones Newswires)

China and Vietnam are urging workers to forgo trips home during the upcoming Lunar New Year over fears that new Covid-19 outbreaks will lead to factory shutdowns. (Nikkei Asia)

Container shipping lines are maintaining the bulk of their scheduled services over the Lunar New Year holiday. (Lloyd’s List)

Mediterranean Shipping Co. and Lufthansa want to buy the majority of Alitalia successor ITA Airways. (Financial Times)

Freight transportation congestion is driving growing threats of cargo theft at logistics facilities. (Insurance Business)

FedEx is using predictive data analytics to help manage logistics for its premium services. (Forbes)

Dutch startup EcoClipper is refitting a 110-year-old sailing vessel for cargo service in the North Sea. (Maritime Executive)

 

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, and @pdberger. and @LydsOneal. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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