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Dialing Back Rebound Projections; Canada’s Growing EV Supply Chain

By Paul Page

 

An intermodal train near Emporia, Kan., this month. Intermodal rail-truck volumes fell more than 15% last week. PHOTO: MARK REINSTEIN/ZUMA PRESS

The much-anticipated rebound in demand in the second half of the year may be a bit farther off. Freight and logistics operators are starting to dial back their expectations for a recovery in time for the traditional fall peak shipping season, as retailers signal more caution in an uncertain consumer economy and volumes moving through supply chains tail off more than anticipated. The WSJ Logistics Report’s Liz Young and Paul Berger write that big shipping customers including Nike, Target and Kohl’s remain guarded in ordering from suppliers as they continue to dig out from a glut of inventory. Nike says paring inventories remains a “top priority” as the sportswear apparel supplier focuses on improving its financial picture. Logistics executives have projected a recovery as supply-chain disruptions have eased and companies return to more traditional inventory replenishment cycles. Several say they remain optimistic, but note the broader economy looks increasingly uncertain.

  • U.S. container imports from Asia hit a three-year low in February. (Journal of Commerce)
  • Orient Overseas Container Line is projecting a recovery in shipping demand later in 2023. (ShippingWatch)
  • The American Trucking Associations’ for-hire truck tonnage index increased sequentially for the third straight month. (Fleet Owner)
 
 

Quotable

“Whatever your macro outlook was a week ago, it’s lower today.”

— Stephens analyst Jack Atkins in a March 17 note on the shipping outlook
 
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Supply Chain Strategies

Aluminum is unloaded at the port in Bécancour, Quebec. PHOTO: STEPHANIE FODEN for THE WALL STREET JOURNAL

Efforts by the U.S. and its allies to reduce their dependence on China for critical minerals used in electric-vehicle batteries are triggering something of a boom in Canada. Multinational companies are pumping billions of dollars into the country’s electric-vehicle manufacturing sector, lured by government incentives, access to raw materials and cheap renewable energy. The WSJ’s Vipal Monga reports Volkswagen is the latest to join the rush, with plans to build a battery-cell plant in Ontario that could rank as the largest investment ever made in Canada’s auto sector. The factory, along with plans from other automakers, mining companies and chemical producers, highlights how an electric-vehicle supply chain is forming in the country. Canada has had to pay up to win the investments, scrambling to keep up with the U.S., which has unveiled a raft of subsidies and tax breaks meant to draw capital investment in the EV industry.

  • Volvo plans to build its new electric passenger car in China and export it to Europe and Japan. (Nikkei Asia)
 
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Number of the Day

226,046

Intermodal truck-rail units moved by U.S. railroads in the week ending March 18, a 15.2% decline from the same week a year ago and the fourth straight double-digit weekly decline, according to the Association of American Railroads.

 

In Other News

The Federal Reserve raised its benchmark interest rate another quarter-percentage point while signaling growing uncertainty over future increases. (WSJ)

European officials rolled out proposals aimed at forcing companies to back up environmental and sustainability claims with scientific evidence. (WSJ)

Norfolk Southern CEO Alan Shaw told a congressional panel the railroad’s stock buybacks haven’t left the carrier short of funds for safety improvements. (Bloomberg)

The finance heads of the world’s largest commodity trading houses expect to report record profits for 2022. (Financial Times)

Shipping supplies company Uline is seeking to build a 1.4 million-square-foot distribution center in Kenosha, Wis. (Kenosha News)

Alphaliner says Maersk Line has idled 29 ships with total capacity of more than 281,000 20-foot containers. (The Loadstar)

Delivery slots at China’s three major shipyards​ are filled into 2027. (Seatrade Maritime)

Rates for bulk shipping’s largest capesize vessels are declining on reduced steel output from China. (TradeWinds)

Five shipping groups are seeking common action to set safety standards for the transport of lithium-ion batteries. (Splash 247)

Southeast Asian logistics provider Ninja Van’s net loss more than doubled to about $181.5 million in its most recent fiscal year. (DealStreetAsia)

Federal authorities recovered $1.1 million from two San Diego-area logistics companies found to be underpaying workers. (Industrial Distribution)

Ralph L. Roberts, founder of less-than-truckload company R+L Carriers, died this month at 77. (Truckers News)

 

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 Twitter at @WSJLogistics.

 
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