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Hurdles for Robots; Amazon Dropping the Box; Dimming U.S.-China Trade

By Paul Page

 

The Long Beach Container Terminal at California’s Port of Long Beach has incorporated automation. PHOTO: RINGO CHIU/ZUMA PRESS

For some shipping executives, port bottlenecks during the pandemic were the latest sign of a harsh truth regarding U.S. supply chains. American ports lag behind gateways in Asia and Europe in their use of automation, the WSJ Logistics Report’s Paul Berger writes, and container terminals don’t appear to be moving closer to deploying robots on the docks even as pressure grows to speed distribution. Automation at Southern California ports offered modest stability during pandemic-era disruptions. But officials say American ports face big hurdles in adding robots, including space constraints, the tough economics of getting a return on hefty investments and, most prominently, fierce opposition from organized labor. Dockworker unions have dug in against expanding automation, and they argue that ports run by people are just as productive as robotic operations. To some, the measures suggest that automation may not be the supply chain panacea that some executives hope for.

  • ABI Research projects demand for automated guided vehicles at seaports worldwide will grow at an average annual rate of 26% through 2030. (DC Velocity)
 

Quotable

“It’s time we put companies out of business that push automation.”

— International Longshoremen’s Association President Harold Daggett
 
CONTENT FROM: Cathay Pacific Airways
Cathay Cargo is using innovation to stay ahead of the curve.

With unprecedented travel restrictions, supply chain disruptions and rising fuel prices, it's no secret that aviation has had a tough few years. In this conversation with Tom Owen, learn how one of the world's busiest cargo airlines is leveraging technology to produce leading solutions and navigate these turbulent times.

Discover More

 

E-Commerce

Amazon has built its network including fulfillment centers like this one in Melville, N.Y., to reduce the distance packages need to travel for delivery. PHOTO: JOHNNY MILANO/BLOOMBERG NEWS

Amazon is taking a new, more extreme approach to efforts by retailers to pare the packaging on its goods. The e-commerce giant is shipping out millions of orders without any extra packaging whatsoever beyond the manufacturer’s boxes or wrapping that hold the goods. The WSJ’s Sebastian Herrera writes the package-free option is the company’s next frontier in overhauling its delivery processes, one the company says customers have asked for. Companies have long sought to reduce the packaging that can add costly weight and size to shipments, an effort that has grown as the boom in online commerce has filled homes, trash bins and recycling centers with tons of cardboard. There are practical hurdles. A new television set on a doorstep may be an inviting target for “porch pirates.” And Amazon needs to help its suppliers create packaging sturdy enough to ship on its own while not adding extra material.

 
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Economy & Trade

China's Tianjin Port earlier this year. PHOTO: ZHAO ZISHUO/ZUMA PRESS

Trade lanes between the U.S. and China are thinning out. A deepening confrontation between the U.S. and China is eroding trade ties between the world’s two largest economies, the WSJ’s Anthony DeBarros and Yuka Hayashi report, with goods from China accounting for the smallest percentage of U.S. imports in 20 years. Trade data shows buyers instead are turning to Mexico, Europe and other parts of Asia for wares ranging from semiconductors and smartphones to clothing. China’s 13.3% share of U.S. goods imports during the first six months of this year is the lowest since 12.1% for the year in 2003. A basket of 25 other Asian nations including India, Thailand and Vietnam now account for nearly a quarter of U.S. imports, while Mexico and Canada have pushed past China as the largest U.S. trade partners. The shift carries important implications for trans-Pacific maritime trade and the shipping capacity deployed on the routes.

 
 

Number of the Day

230,225

Loaded container imports into Georgia’s Port of Savannah in July, in 20-foot equivalent units, down 8.5% from last year but 27.6% ahead of June and 16.7% ahead of July 2019.

 

In Other News

U.S. producer prices ticked up 0.3% in July after a flat reading in June. (MarketWatch)

A measure of U.S. consumer confidence slipped this month from a 22-month high. (MarketWatch)

The International Energy Agency raised its forecast for global oil supplies next year while moderating its demand expectations. (WSJ)

U.S. Steel rejected an unsolicited buyout offer from rival steelmaker Cleveland Cliffs that would significantly reshape the domestic steel industry. (WSJ)

Nikola is recalling most of its battery-powered trucks after an investigation indicated a defective battery part likely caused a fire in one of the vehicles. (WSJ)

A crop considered a weed is being studied as a possible source of renewable diesel or sustainable jet fuel. (WSJ)

South Korea’s Posco plans to move production of battery materials from China to South Korea to qualify for U.S. tax incentives. (Financial Times)

The Macy’s department store chain is reshaping its supply chain with a goal of creating more “inventory productivity.” (Logistics Management)

Freight railroads are pushing back plans to join a federal safety program​ as they seek to overhaul the effort. (New York Times)

China's securities regulator approved trading of Shanghai container freight index futures on the Shanghai International Energy Exchange. (Reuters)

Deloitte resigned as auditor of India’s Adani Ports amid concerns over some transactions flagged by a short-seller. (Indian Express)

Taiwanese container carriers Yang Ming and Wan Hai Lines fell into the red in the second quarter. (Journal of Commerce)

China surpassed Greece as the world’s largest ship owner by tonnage. (TradeWinds)

Dutch authorities seized a record eight tons of cocaine on a ship from Ecuador at the Port of Rotterdam. (Associated Press)

Rapid capacity growth in airfreight and ocean markets is cutting deeply into profit margins at freight forwarders. (The Loadstar)

The U.S. and China agreed to roughly double the number of passenger flights permitted between the countries. (South China Morning Post)

Korean Air’s quarterly operating profit fell 36% as cargo revenue declined 56% amid “intensified competition” and falling freight rates. (Simple Flying)

GXO resumed logistics services for U.K. retailer Wilko after the company went into the British version of bankruptcy. (Motor Transport)

Longtime Aramark supply chain leader John Orobono died at 72. (Philadelphia Inquirer)

 

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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