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Breaking Up Alibaba; Halting Warehouse Plans; Tracking Tech Reaches Stores

By Paul Page

 

A trader works at the post where Alibaba is traded at the New York Stock Exchange this week. PHOTO: BRENDAN MCDERMID/REUTERS

The Chinese business empire focused on e-commerce that entrepreneur Jack Ma built over two decades is being effectively dismantled. Alibaba says it plans to split itself into six independently run companies, each of which could seek IPOs. The WSJ’s Raffaele Huang and Clarence Leong report the reorganization marks a dramatic overhaul of one of China’s largest private companies, one that was once valued at over $800 billion but now is worth about a quarter of that. The split comes after Chinese authorities signaled recently they were winding down a regulatory clampdown aimed at reining in the country’s powerful tech sector. It culminates a shift inside Alibaba to become more nimble after Mr. Ma stepped back from the company’s helm in 2019. That centralization drive was aimed at creating a sprawling ecosystem from payments to logistics, but the so-called Alibaba economy has faced challenges beyond its home market.

  • Amazon is starting to warn online shoppers about frequently returned items as it tries to rein in returns. (The Information) 
 

Quotable

“If you don’t change yourself, you will be defeated by the times.”

— Alibaba Chairman and CEO Daniel Zhang
 
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Logistics Technology

An apparel sales floor in Jersey City, N.J. PHOTO: KENA BETANCUR/GETTY IMAGES

Inventory management systems are heading to the sales floor. Apparel retailers are starting to roll out advanced technology capable of tracking individual items as they move through busy store environments that can mark a dead end for inventory visibility. The WSJ Logistics Report’s Liz Young writes apparel merchants American Eagle Outfitters, Victoria's Secret and Nordstrom are among those implementing a new generation of radio frequency identification, or RFID, chips to close an information gap in supply chains that grows as shoppers try on and move around merchandise. The efforts are being driven in part by the booming growth in e-commerce sales in recent years, and a push by retailers to use their stores to help fulfill online sales. That raises the stakes on tracking inventory. RFID technology has grown more refined, and chips have gotten smaller and cheaper, making tracking at that level a better proposition.

 
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Government & Regulation

A warehouse in Perryman, Md., where some residents have sued to block another proposed warehouse. PHOTO: MATT ROTH FOR THE WALL STREET JOURNAL

The spread of mega-warehouses across the U.S. is starting to hit a regulatory wall. A growing backlash against traffic and other quality-of-life issues has been forming around the country, and the WSJ’s Kate King reports that elected officials from Southern California to the Cleveland suburbs to Bloomingdale, Ga., have passed moratoriums on warehouse development. Harford County, Md., between Philadelphia and Baltimore, is weighing a six-month bar on new warehouse construction in a region that until now has had few restrictions on industrial development. The efforts follow years of dramatic expansion, with about 1.6 billion square feet of warehouse space built nationwide since early 2020 and another 825 million square feet still under development. Warehouse development across the U.S. has declined in recent months as costs have increased and e-commerce sales growth has retreated. Several big projects are in the works, however, if elected officials let them go forward.

 
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Transportation

The Feb. 3 derailment of a Norfolk Southern freight train in East Palestine, Ohio, was just one of over 1,000 that happen every year. In a WSJ video report, the National Transportation Safety Board’s Michael Hiller explains the most common reasons trains come off the tracks and what can be done to prevent derailments.

 

Number of the Day

41.3

ACT Research’s index for U.S. truck volume for February, down from 51.6 in January and the eighth straight month the measure has been in contraction.

 

In Other News

U.S. imports fell 2.3% in February even as retail inventories jumped 0.8%. (MarketWatch)

A measure of U.S. consumer confidence increased slightly this month. (MarketWatch)

Electric vehicle startup Lucid Group plans to lay off about 1,300 employees, or 18% of its workforce. (WSJ)

Apple introduced a buy now, pay later service in the U.S. (WSJ)

Same-store sales at Walgreens increased 3.3% last quarter. (WSJ)

Pitney Bowes says overall U.S. parcel volumes contracted 2.2% last year while the sector’s revenues expanded 6.5% over 2021. (Supply Chain Dive)

Royal Mail management is threatening to take the operator into the U.K. version of bankruptcy as talks with unionized workers on the brink of collapse. (The Guardian)

The growing orderbook for methanol-capable ships signals growing acceptance of the fuel in the maritime sector. (Lloyd’s List)

Chevron is ordering up to six new liquefied natural gas carriers. (TradeWinds)

The Poseidon Acquisition consortium completed its $10.9 billion buyout of Seaspan parent Atlas. (Splash 247)

Canadian National is developing a multimodal transload facility in Calgary, Alberta, aimed at trans-Pacific trade. (Railway Age)

Yusen Logistics workers in the U.K. staged a strike in a dispute over pay. (Motor Transport)

Startup Venti Technologies raised $29 million in a Series A funding round backing its technology for automated vehicles in logistics operations. (TechCrunch)

Norway’s largest pension fund wants to change the makeup of A.P. Moller-Maersk’s board and amend the shipping company’s management salary and bonus program. (ShippingWatch)

 

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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