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Yellow Rejects Bidder; Peaking Parcel Dangers; Apple’s India Suppliers

By Paul Page

 

Yellow still has dozens of terminals and tens of thousands of pieces of equipment to be sold. PHOTO: PAUL HENNESSY/ZUMA PRESS

An effort to bring failed trucker Yellow back from the ashes is effectively over. Attorneys for the bankrupt business rejected an offer to revive the company and rehire thousands of its former workers. The WSJ Logistics Report’s Paul Berger writes that Yellow’s lawyers wrote to the group seeking to resurrect the company shortly after an auction in bankruptcy court raised nearly $1.9 billion for a swath of terminals around the country. The rejection underscores the difficulty in trying to build what would essentially be a new less-than-truckload operation in the U.S., even with Yellow’s extensive assets. A dozen of the company’s rivals have scooped up many of the most prized facilities, with XPO alone putting $870 million on the table for 28 sites. Three others are spending more than $200 million, and truckload carrier Knight-Swift Transportation is putting out $51.3 million to expand its growing LTL business.

 

Quotable

“In our view, the bid contemplates a nonviable enterprise that understates start-up costs…and overstates potential revenue and earnings.”

— Yellow attorneys, in a notice to bidders seeking to revive the failed trucker
 
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Transportation

FedEx has nearly 7,000 independent contractors in its Ground unit, and many are small-business owners. PHOTO: TED S. WARREN/ASSOCIATED PRESS

Peak season is becoming dangerous for many parcel workers. FedEx issued a security alert to thousands of its package-delivery contractors, the WSJ’s Esther Fung reports, following growing reports of attacks on parcel vans that include theft of shipments and even carjacking of the entire vehicle. Videos have been posted on social media and aired on television in recent weeks showing attacks on drivers, raising alarms at FedEx, United Parcel Service and Amazon. The number of package thefts increases in the final months of the year because there are more shipments on the road. It is unclear if there is a higher rate of truck robberies this peak season compared with earlier years, but industrial security specialists say cargo theft is on the upswing. Security firm CargoNet says thefts in the trucking sector in the U.S. and Canada were up nearly 60% in the third quarter from a year ago.

  • Unionized workers at DHL’s Cincinnati airport hub walked off the job to protest what they said are unfair labor practices. (WSJ)
  • UPS's chief marketing and customer experience officer, Kevin Warren, is leaving the company and UPS is eliminating the CMO role. (WSJ)
 
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Supply Chain Strategies

An assembly line at a factory of Rising Stars Mobile India, a unit of Foxconn, in Tamil Nadu, India, in 2019. PHOTO: KAREN DIAS/BLOOMBERG NEWS

Apple’s supply chain and the broad ecosystem of suppliers behind it is gravitating toward India. The consumer electronics behemoth and its suppliers aim to build more than 50 million iPhones in India annually within the next two to three years. The WSJ’s Rajesh Roy and Yang Jie report the plan will still leave China as the world’s dominant iPhone producer, but with a diminishing share as Apple adds another tens of millions of units to its India production in the coming years. Apple is emblematic of a move among companies worried about overdependence on China to shift parts of their supply chains elsewhere, most often to Southeast Asia and South Asia. Despite challenges, people involved in the supply chain say Apple and its suppliers, led by Foxconn, generally believe the initial push into India has gone well and are laying the groundwork for a bigger expansion.

  • Apple is working with Chinese assembler BYD to shift iPad product development resources to Vietnam. (Nikkei Asia)
 

Number of the Day

2.9%

Year-over-year decline in weight per less-than-truckload shipment at Old Dominion Freight Line in November, partly offset by a 0.6% increase in daily shipments

 

In Other News

China’s exports edged up 0.5% after six straight months of decline, while imports fell 0.6%. (WSJ)

U.S. wholesale inventories slipped 0.4% in October, extending a downward trend seen since the start of the year. (WSJ)

Dollar General’s same-store sales dropped 1.3% last quarter as earnings dropped more than 47%. (WSJ)

Online luxury stores are grappling with flagging demand and widening losses. (WSJ)

Lucid Motors is designing an electric-vehicle battery that would be smaller but charge faster than current batteries. (WSJ)

A growing number of China's big automakers are seeking semiconductors from domestic sources to avoid U.S. trade restrictions. (Nikkei Asia)

Global carbon dioxide emissions from burning coal, oil and gas reached a new record this year. (Financial Times)

Vessel tracking figures suggest large numbers of cargo ships have diverted away from the drought-struck Panama Canal. (Splash 247)

The U.K. sanctioned four companies linked to 82 tankers that have been used in Russia’s “dark fleet” crude transport. (Lloyd’s List)

CMA CGM is boosting its list rates on Asia-Europe lanes by a third next month as container lines seek to reverse spot pricing declines. (The Loadstar)

Maersk Line will deploy its first large methanol-fueled containership on an Asia-Europe string starting in February. (gCaptain)

Amazon is raising fees for third-party sellers using its fulfillment centers. (Supply Chain Dive)

Canadian National is buying short line Iowa Northern Railway. (The Gazette)

Aurora Innovation plans to use as many as 20 autonomous trucks to haul loads without operators on board starting next year. (Trucking Dive)

A California robotics firm flew an autonomous cargo plane last month with no pilot on board. (DC Velocity)

Japan Airlines is launching a 767 freighter operation in February, 13 years after withdrawing from dedicated cargo business. (Air Cargo News)

 

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.

  • Companies are taking a second look at their nondisclosure provisions as SEC heightens its scrutiny.
  • The European Union’s coming rules on AI may shape corporate use of AI systems.
  • OpenAI’s new board may still confront the same old problem: A nonprofit board overseeing a for-profit business.
  • Podcasts are turning to visual ads across billboards, streaming platforms and the internet to gain traction.
 

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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