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Port Power on the Blink; Amazon's Rural Expansion; Huawei Rising

By Paul Berger

 

Ship-to-shore cranes at the Port of Los Angeles are being disrupted by power surges and lulls. PHOTO: ERIC THAYER/BLOOMBERG

The Port of Los Angeles has a power problem. Terminal operators at the crucial West Coast port say power surges and lulls are disrupting ship-to-shore cranes and other container-handling equipment. The WSJ Logistics Report writes the disruptions are striking as cargo-handling companies are becoming more dependent on the electric grid amid a transition to cleaner fuels. Some operators are questioning whether the grid is reliable enough to support the port’s goal of phasing out diesel-powered equipment by 2030. The Los Angeles Department of Water and Power, which provides energy to the port, says the nine outages so far this year were caused by a series of unusual events, including equipment failure, bad weather, birds hitting power lines and vehicles hitting electric poles. The utility says it is investing hundreds of millions of dollars to boost power and to improve reliability. It says upgrades will be complete by 2029.

 
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E-Commerce

Amazon is bringing its network of distribution centers closer to rural areas. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES

Amazon.com is delivering its ultrafast parcel service to rural America. The e-commerce behemoth is expanding one- to two-day delivery to small cities and towns across Arizona, Minnesota, Louisiana and Texas. The WSJ’s Sebastian Herrera and Esther Fung report that Amazon is seeking an edge against rivals like Walmart and Temu by boosting sales in less-populated parts of the country. Many Americans have grown used to same-day or next-day Amazon delivery, but rural Americans still wait three to five days for packages to arrive. Amazon will boost delivery times using networks of small warehouses and mom-and-pop shops closer to rural areas and contracted drivers for deliveries. The company, which currently delivers more than two-thirds of its packages, expects to deliver 90% of shipments following the changes. That means it will rely less on the United States Postal Service, which has been raising rates and reducing pickups in some areas.

  • U.S. regulators say Amazon can be held responsible for recalling defective goods sold by sellers on its marketplace. (The Information)
 

Number of the Day

820,584

Loaded import containers, measured in 20-foot equivalent units, processed at the Port of Virginia in the first six months of 2024, a 14% increase over last year.

 
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Economy & Trade

Huawei's new research and development center in Shanghai. PHOTO: CFOTO/DDP VIA ZUMA PRESS

U.S. attempts to weaken Chinese telecommunications giant Huawei have only made it stronger. Washington sanctioned Huawei five years ago and cut off access to U.S. suppliers of advanced technologies, citing national security concerns. The WSJ’s Liza Lin, Stu Woo and Raffaele Huang write the Chinese company has held on to its leading position in the global telecom-equipment market using new chips developed in-house. Huawei is thriving thanks to billions of dollars in subsidies and buying contracts from state-controlled companies for its chips, smartphones and software. It has also flourished by building out its supply chain for components such as semiconductors that are developed and manufactured in China. Huawei is leading a push to develop cutting-edge chips to wean China off of its reliance on U.S. companies like Nvidia and Intel. Its products are becoming popular for Chinese consumers who cite national pride in their desire to buy Chinese.

 

Quotable

“America doesn’t understand that with this blow, they are turning the biggest supporter of the U.S. into its largest detractor.”

— A Huawei executive speaking to the company’s founder Ren Zhengfei.
 

In Other News

Eurozone growth maintained its pace in the second quarter as fears of a slowdown persist. (WSJ)

Germany's economy contracted in the second quarter of the year. (WSJ)

China is planning more aggressive steps to boost consumer spending and head off worsening economic challenges. (WSJ)

The Philippines is pressing ahead with resupply of a military outpost in the South China Sea that has been a flashpoint for tensions with Beijing. (WSJ)

C.H. Robinson Worldwide is selling its European surface transportation business to German freight forwarder sennder Technologies. (WSJ)

Knight-Swift Transportation Holdings is extending its less-than-truckload operations with the acquisition of Dependable Highway Express. (Dow Jones Newswires)

Canadian Pacific Kansas City's second-quarter revenue rose on increased shipping volumes. (Dow Jones Newswires)

Oil and gas giant BP’s underlying profit rose in the second quarter after higher volumes offset lower refining margins. (WSJ)

Tesla is recalling more than 1.8 million vehicles in the U.S. (WSJ)

Prada reported an increase in net revenue for the first half of the year as retail sales rose 18%. (WSJ)

L’Oreal’s earnings rose in the second quarter, driven by growth outside of China. (WSJ)

Spirits maker Diageo expects demand to remain soft after consumers in North and Latin America pulled back spending on alcohol. (WSJ)

Japan’s Isuzu Motors will start selling locally-assembled compact electric trucks in North America in August. (Nikkei Asia)

Chinese suppliers staged a protest at Temu's office in Guangzhou alleging unreasonable platform policies. (South China Morning Post)

The Department of Justice is suing Norfolk Southern for allegedly causing chronic delays on Amtrak routes between New York and New Orleans. (Associated Press)

 

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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