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Parcel Pressures Easing; Digital Sales Logging Off; No Second Servings

By Paul Page

 

A USPS facility in Los Angeles. PHOTO: MARIO TAMA/GETTY IMAGES

Note: The Logistics Report newsletter will take a break for Thanksgiving on Thursday and Friday. We'll be back in your inbox on Monday.

Parcel carriers are breathing a little easier over the peak holiday shipping season. FedEx, United Parcel Service and the U.S. Postal Service may wind up having a much easier time dealing with the holiday crunch than some forecasters predicted. The WSJ’s Paul Ziobro reports the pressure is easing thanks to factors in the market and within the companies, but mostly because consumers fearing supply-chain strains have been heading to stores and buying earlier. The carriers have also braced themselves after last year’s frantic holiday period, with capacity in place along with more workers on hand this year thanks to Covid-19 vaccines. Carrier executives say they are cautiously confidence, and there has been no repeat of last year’s restrictions on customers. ShipMatrix estimates the daily shortfall between industry capacity and packages will be about 1.3 million between Thanksgiving and Christmas. Last year, the daily deficit was 7.2 million parcels.

 
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E-Commerce

Americans are back to buying appliances in person. PHOTO: JOE RAEDLE/GETTY IMAGES

The e-commerce surge appears to be losing some of its momentum. U.S. consumers are spending freely heading into the holidays, and the WSJ’s Sarah Nassauer reports that more goods are being sold in stores as consumers return to bricks-and-mortar stores that staggered under Covid-19 restrictions during last year’s upended holiday shopping season. E-commerce sales at Best Buy declined last quarter and online business at Dick’s Sporting Goods was flat compared with last year. The latest retail figures compare with enormous growth a year ago, but the retailers’ reports follow government data showing overall U.S. e-commerce sales fell 10.1% in October from last year. The figures suggest some pre-pandemic equilibrium is returning to the retail sector and that companies may tap the brakes on wholesale changes in distribution strategies to meet digital demand. Many retailers say they’re focused now on getting inventory in place for consumers, wherever they show up.

 
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Quotable

“Uncomfortable stability is the phrase of the moment.”

— Tim Morris, head of the UK Major Ports Group
 

Supply Chain Strategies

Frozen turkeys in New Hope, Pa., last week. PHOTO: MATT ROURKE/ASSOCIATED PRESS

Second helpings are off the table at some supermarkets. Two big grocery chains in the southeastern U.S. are limiting the number of Thanksgiving staples customers can buy, the WSJ’s Jennifer Calfas reports, in a reminder to consumers that supply-chain snarls are still roiling retailers as the holiday season unfolds. Publix Super Markets limited its customers to no more than two individual items from a menu of Thanksgiving ingredients. Winn-Dixie restricted shoppers to one turkey apiece while encouraging customers to “only purchase what they need.” That’s a contrast with a holiday typically marked by abundance, and it suggests there are still strains in food supply chains farms to processing plants. For supermarkets, the holiday is the first big test of the season of their ability to fill shelves and staff stores.

 
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Number of the Day

2,995,176

Containers, in 20-foot equivalent units, imported into the U.S. in October, up 2.7% from the year before to a record level, according to Panjiva.

 

In Other News

Surveys of purchasing managers in the U.S. and Europe show strong business demand is leading to record price increases. (WSJ)

The U.S. and several other countries will tap their national strategic petroleum reserves in an attempt to bring down fuel prices. (WSJ)

Turkey’s lira tumbled as much as 18% against the dollar to a fresh record low. (WSJ)

Lumber futures prices have jumped 44% in a week on supply concerns because of the British Columbia flooding. (WSJ)

A federal jury found that companies that own CVS, Walgreens and Walmart pharmacies were liable for contributing to the opioid epidemic in two Ohio counties. (WSJ)

The Justice Department is seeking to block U.S. Sugar’s proposed purchase of rival Imperial Sugar on antitrust grounds. (WSJ)

Gap says supply-chain disruptions shaved about 8% off the apparel retailer’s sales for the quarter. (WSJ)

J.M. Smucker’s third-quarter sales expanded but gross margins fell sharply on rising costs. (WSJ)

U.S. gasoline barges are heading to Vancouver, British Columbia, to mitigate fuel shortages in the wake of widespread flooding. (Vancouver Sun)

Amazon is adding a layer of “upstream” warehouses to feed its distribution centers. (The Loadstar)

Walmart made its first delivery with a drone that was operated from an Arkansas store. (Supermarket News)

Tupperware will idle some factories after lower-than-expected demand left the company with too much inventory. (Supply Chain Dive)

Textile manufacturers face a reduced cotton harvest in 2022 along with increased demand. (Sourcing Journal)

China has blocked public access to shipping location data, citing national security concerns. (Financial Times)

Strong liquefied natural gas demand has pushed spot rates for LNG carriers to as much as $424,000 per day. (Lloyd’s List)

Cosco Shipping is taking a minority stake in Chinese express carrier SF Holdings. (Journal of Commerce)

California’s Port Hueneme will use a U.S. Navy yard to handle some overflow container volume. (Maritime Executive)

Shipping line Hapag-Lloyd is asking customers to divert refrigerated cargoes from China’s Dalian port because of Covid-19 lockdowns. (Port Technology)

Detlef Trefzger will step down as CEO of freight forwarder Kuehne + Nagel and management board member Stefan Paul will succeed him. (Dow Jones Newswires)

Japanese developer Daiwa House Industry will launch an international logistics business in Southeast Asia. (Nikkei Asia)

Chief supply chain officers are the new stars of the C-suite. (Business of Fashion)

 

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

 
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