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Amazon Delivers a Warning; Railroads Off Track; Recruiting With Automation
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Amazon's Staten Island fulfillment center in New York City. Photo: PETER FOLEY/SHUTTERSTOCK
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Amazon is heading into the holiday season talking about cost cuts rather than sales growth. The e-commerce leader is projecting that sales in the current quarter would be far below expectations, the WSJ’s Sebastian Herrera reports, sending a new shock wave across the retail sector and offering a stark sign of how shifting economic forces are battering companies that thrived during the pandemic. Amazon’s sales last quarter rose 15% from a year earlier, while its $2.9 billion net profit marked its first quarterly profit this year but a 9% decline from the year before. The company also jolted observers with its projection for revenue of $140 billion to $148 billion in the fourth quarter—analysts had expected more
than $155 billion. CEO Andy Jassy said Amazon is building “a stronger cost structure for the business moving forward.” That plan includes cutbacks in the company’s sprawling logistics network.
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Shopify’s third-quarter revenues jumped 22% to $1.4 billion but the e-commerce company’s operating loss widened to $345 million. (WSJ)
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Japan's cross-border e-commerce is booming again, with smaller companies joining the market to take advantage of the yen's sharp decline and technology advances. (Nikkei Asia)
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A BNSF rail yard in Galesburg, Ill. PHOTO: SHAFKAT ANOWAR/ASSOCIATED PRESS
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Clouds are forming again over U.S. freight rail operations. Members of another railroad union rejected a tentative contract agreement reached with carriers, the WSJ’s Esther Fung reports, reviving concerns that the labor peace brokered by the White House to avert a potential strike is looking more fragile. The vote by the Brotherhood of Railroad Signalmen sends the two sides back to the negotiating table. Failure to agree on a revised deal could result in a walkout as early as December. Of the 12 labor unions involved in bargaining, six have ratified their agreements. Two of the largest unions, the Brotherhood of Locomotive Engineers and Trainmen and the Transportation
Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers, are still in the process of ratification and are expected to announce results in mid-November, right after a standstill agreement to forestall strikes or a management lockout expires.
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Canadian National Railway raised its annual profit outlook after third-quarter revenue jumped 26%. (Financial Post)
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Canadian Pacific Railway’s third-quarter revenue rose 19% on strong gains in potash and intermodal transports. (Progressive Railroading)
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An Amazon logistics center in Suelzetal, Germany. PHOTO: RONNY HARTMANN/AGENCE FRANCE-PRESSE
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Some companies are considering a new factor as they weigh supply-chain technology investment. Firms including Mondelez International and Nordstrom say their upgrades in warehouse robotics and other forms of automation are helping them recruit more tech-savvy workers. The WSJ Logistics Report’s Liz Young writes that the introduction of artificial intelligence and other sophisticated technologies is changing the nature of the workforce across supply chains, from white-collar management positions to the jobs on the warehouse floor. It is the flip side of automation efforts often undertaken to cut payrolls. Mondelez Chief Supply-Chain Officer Sandra MacQuillan's new recruits are
showing more interest in things like the snack-foods supplier’s “no-touch” distribution centers and factories. Companies say the investments also help open the remaining warehouse jobs to a wider array of workers since robots at some sites now do more of the heavy lifting.
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Bed Bath & Beyond plans to close 150 stores and cut staff by a fifth, including in its supply-chain operations. PHOTO: GABBY JONES/BLOOMBERG NEWS
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Sue Gove spent her first day as permanent CEO of Bed Bath & Beyond with the troubled retailer’s suppliers. The company hosted roughly 500 suppliers virtually and at its Union, N.J., headquarters for a two-hour summit, the WSJ’s Suzanne Kapner reports, as the home-goods retailer sought to win back brands after a failed overhaul under prior management that led to plunging sales. Ms. Gove called the summit a “call to action” to ensure suppliers are getting their needs fulfilled and the company gets products to stock its shelves. The effort highlights the close mutual interests between merchants and suppliers, and the high stakes for both sides. Brands have been wary of tying up inventory with a company that
had fallen behind on payments to suppliers. But Bed Bath & Beyond has been catching up and Ms. Gove says, “Our accounts payable are as clean as they have ever been.”
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Unilever raised its full-year sales forecast after the consumer-products supplier pushed through record price increases of 12.5% in the third quarter. (WSJ)
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