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Shutting Shanghai Factories; Paying Walmart’s Drivers; Tankers Team Up
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The Yangshan deep-water port in Shanghai. PHOTO: ALY SONG/REUTERS
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Manufacturers are struggling to keep some of their China operations going amid widening Covid-19 lockdowns. The restrictions that have been extended across Shanghai are choking off supplies and clogging up truck routes and ports, the WSJ’s Yang Jie reports, heaping more pressure on stretched global supply chains and threatening to trigger more logjams in the coming weeks. The curbs are keeping many workers at home, restricting output at some factories and closing others, including component makers for Apple and Tesla. Two Volkswagen factories, in Shanghai and China’s northeastern province of Jilin, remain closed through Friday. German conglomerate
Thyssenkrupp has pushed back its target to restart production of auto components at its Shanghai plant to April 15. The problems at factories come as shipping and trucking companies are suffering growing delays. Port of Shanghai volumes have plummeted as shippers and logistics companies divert cargo to nearby Ningbo.
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Outside a Walmart distribution center in Saint George, Utah. PHOTO: GEORGE FREY/BLOOMBERG NEWS
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Walmart is flexing its financial scale to take tighter control of its supply chain. The largest U.S. retailer by revenue is raising wages for in-house truck drivers and expanding a program that trains existing workers to become drivers. The WSJ’s Sarah Nassauer reports Walmart is taking the steps to keep its supply chain running smoothly amid a period of disruption that has extended from ocean transport to inland distribution. That will include raising starting salaries for the company's truck drivers to between $95,000 and $110,000 a year, up from an average starting salary of $87,000. Walmart will also offer workers in other Walmart roles training to become certified truck drivers and join the company’s
fleet. It’s the latest sign of how big retailers are using their size to take greater control of their own supply chains as bottlenecks, capacity constraints and rising prices roil logistics operations.
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A tanker off the coast of California. PHOTO: TIM RUE/BLOOMBERG NEWS
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Consolidation is starting to reshape the fragmented tanker market. Norway-based Frontline and Belgium’s Euronav have agreed to merge in a move that would create one of the world’s biggest tanker owners. The WSJ’s Costas Paris writes that the all-stock deal would create a carrier with nearly 150 tankers, including 69 of the very large crude carriers. That would amount to about 10% of the vessels that dominate the major international energy supply chains. Earnings for tanker owners have been in a yearslong slump, with restrictions from the Covid-19 pandemic resulting in lower oil demand. But the order books for new ships are relatively thin amid rising prices for new vessels and
heavy bookings at shipyards for container ships and natural gas carriers. That could drive up rates in an energy market already roiled by the impact of Russia’s invasion of Ukraine, giving the combined tanker business a lift.
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2.13 Million
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rojected container imports, in 20-foot equivalent units, into major U.S. ports in April, down 6.2% from March and 1.1% below the same month a year ago, according to the Global Port Tracker.
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