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LogisticsLogistics

Seeking Shipping Visibility; China's Alarm Signals; Spreading Chips

By Paul Page

 

The Port of Los Angeles. PHOTO: MARIO TAMA/GETTY IMAGES

The White House is focusing on fundamental freight operations as it seeks to untangle U.S. supply chains. The Biden administration is launching a pilot program to have companies share data on goods movement, the WSJ Logistics Report’s Paul Berger writes, an effort aimed at improving shipment flows by shedding light on dark corners of distribution channels. The administration has lined up 18 companies to take part, including ocean carriers, shippers and freight forwarders, and hopes to have a completed platform for its Freight Logistics Optimization Works later this year. Officials are targeting a sore point in supply chains. Maritime shipments change hands several times in transit but companies along the way often don’t trade information that can make transport most efficient. With much of the freight sector already focused on visibility, any effort that can help manage inventories is likely to win shipper support.

 
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Economy & Trade

Automatic guided vehicles at an automated terminal in China’s Qingdao Port. PHOTO: COSTFOTO/ZUMA PRESS

China’s latest Covid-19 crackdown is starting to touch shipping operations amid fears of new disruptions to supply chains. Freight forwarders and Maersk Line say warehouses across the key exporting city of Shenzhen are closed until March 20, the WSJ’s Sha Hua reports, and companies are warning that truck movements around major hubs including Shenzhen, Shanghai, Tianjin and Qingdao are likely to slow as drivers are screened for Covid. Shenzhen is requiring freight trucks entering from neighboring hard-hit Hong Kong to change drivers at three designated border checkpoints in an effort to curb the spread of Covid-19. Operations at Shenzhen’s big container terminals are moving, but the shutdown of warehouses and stalled truck operations suggest the flow of goods may slow in the coming days. Major manufacturers including Apple supplier Foxconn and Toyota have already idled some factories, shutdowns that will reverberate across global supplies.

Here are developments following Russia’s invasion of Ukraine:

A delegation of European leaders arrived in Kyiv as Russia lobbed more missiles at the embattled capital. (WSJ)

Oil prices have retreated to below $100 a barrel. (WSJ)

OPEC says Russia’s invasion of Ukraine is likely to deal a severe blow to the global economy. (WSJ)

The U.K. government moved to sever normal trade links with Russia and Belarus. (WSJ)

The European Union approved a fourth set of sanctions against Russia. (WSJ)

Russia’s ban on exports could affect about 15% of global trade in solid finished fertilizers, hitting the market for smaller bulk ships. (Lloyd’s List) 

Volga-Dnepr is considering major staff cuts after sanctions against Russia grounded most of the airline’s freighters. (The Loadstar)

Volkswagen warned that the prospect of a protracted war in Ukraine raised questions about the auto maker’s business outlook this year. (WSJ)

Caterpillar is still using Russia as a supply route after the company said it had suspended business with the country. (Bloomberg)

For the latest updates from Russia and Ukraine, click here.

 
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Quotable

“We need to be able to start seeing around corners.”

— Port of Los Angeles Executive Director Gene Seroka, on a White House-led initiative to share information across supply chains.
 

Supply Chain Strategies

Intel will double the manfuacturing capacity at its microchip plant in Ireland. PHOTO: NIALL CARSON/ZUMA PRESS

Intel is pushing the expansion of its global semiconductor supply chain into Europe. The chip giant plans to invest $36 billion in production and research facilities across Europe, the WSJ’s Asa Fitch reports, adding to the expansion of semiconductor manufacturing around the world to meet surging demand. Construction of two factories at a single chip-making complex in Germany will start next year, with production slated for 2027. It’s the second multibillion-dollar plant investment Intel has announced in 2022, following notice of a sprawling chip-making facility in Ohio. Intel is among a raft of chip companies responding to unprecedented demand for digital products and a global chip shortage that has amplified the need for more manufacturing. The moves are reconfiguring semiconductor supply chains now largely focused on production in Asia. Intel’s expansion is likely to trigger still more actions as suppliers look to get closer to the industry heavyweight.

 
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Number of the Day

$5.250

Average U.S. price per gallon for diesel in the past week, up more than 40 cents from the week before and more than $1 per gallon over the last two weeks to a record high, according to the Energy Information Administration.

 

In Other News

U.S. producer prices moderated in February but remain up 10% on an annual basis. (WSJ)

China’s industrial output accelerated in the first two months of the year and retail sales outpaced forecasts. (WSJ)

Authorities are still trying to free the Evergreen container ship that ran aground in the Chesapeake Bay. (WSJ)

Saudi Arabia is in talks with Beijing to price some of its oil sales to China in yuan. (WSJ)

North American rail shippers are bracing for disruptions from a potential strike starting this week against Canadian Pacific Railway. (Reuters)

American energy producer Venture Global LNG has struck supply deals that would make it China’s biggest source of liquefied natural gas. (Nikkei Asia)

U.S. apparel manufacturer Bella+Canvas plans to open a fabric facility outside Montgomery, Ala. (Sourcing Journal)

Specialty retailer Party City plans to charter vessels and lease containers to shorten lead times for its imports. (Supply Chain Dive)

CMA CGM added a megaship and a mid-sized vessel to its order book. (TradeWinds)

Lufthansa is launching intra-Europe freighter operations with A321 aircraft. (Air Cargo News)

Retailer H&M’s sales expanded 18% in the past quarter before currency adjustments. (Women’s Wear Daily)

Department store chain Belk is closing its Jonesville, S.C., fulfillment center and laying off more than 300 workers. (Charlotte Observer)

Cold-storage provider Lineage Logistics acquired MTC Logistics and its sites near three U.S. ports. (DC Velocity)

 

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

 
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