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Slamming Postal Trucking; Buying a Supplier; Duty-Free E-Commerce

By Paul Page

 

The USPS says it expanded its safety monitoring team in September and improved its oversight of contractors’ safety performance. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS

The U.S. Postal Service is facing new scrutiny over its oversight of trucking contractors that haul mail over long distances. An inspector general’s report says the postal service sidestepped its own rules to allow unvetted drivers to haul nearly 250,000 loads of mail over two years, and failed to track fatal incidents during a period when crashes killed dozens of people. The WSJ’s Christopher Weaver reports the gaps came as the USPS increasingly turned to freight brokers to match loads to available trucks in the broader spot market for highway transport. The report says the USPS used an emergency exemption to its rules for vetting drivers as freight brokers became more central to its transportation network. The USPS says its use of brokers reflected standard industry practice and that collecting detailed information about drivers hired by its brokers would be “of no tangible benefit” and could lead to legal risks.

  • Belgium’s postal operator says “a major transformation" is needed after overall operating profit plummeted last year. (Reuters)
 
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Supply Chain Strategies

Spirit was created when Boeing sold some of its factories in 2005. PHOTO: DAVID RYDER/BLOOMBERG NEWS

Boeing is trying to solve an ongoing problem in its supply chain by acquiring a crucial supplier. The aircraft manufacturer is in talks to acquire Spirit Aerosystems, the troubled jet-fuselage supplier it split off two decades ago that has been at the center of quality issues affecting its 737 MAX jets. The WSJ’s Lauren Thomas and Sharon Terlep report that a deal would be a strategic reversal of an outsourcing strategy for Boeing, which sold the Wichita plant now used by Spirit Aerosystems after Boeing spun off its former business unit in a push to focus on final assembly. The facility has been plagued by problems that have slowed production and left Boeing short of jets to deliver to airlines. Spirit has struggled financially for years. It secured a $100 million cash infusion from Boeing last year, a high-profile example of recent agreements by companies to shore up troubled suppliers.

  • Airbus is exploring the potential purchase of the Spirit AeroSystems plant in Northern Ireland that supplies wings for the A220. (SimpleFlying)
  • Boeing will pay $51 million to settle State Department charges of numerous export violations. (Reuters)
 

Quotable

“Did it go too far? Yeah, it probably did. But now it’s here and now. And now, I’ve got to deal with it.”

— Boeing CEO Dave Calhoun, on the plane maker's outsourcing strategy.
 
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E-Commerce

A Shein warehouse in Whitestown, Ind. PHOTO: SCOTT OLSON/GETTY IMAGES

U.S. lawmakers are calling for a crackdown on the special trade provision that e-commerce juggernauts Temu and Shein are using to flood the country with cheap imports. The shipments using the de minimis rule are surging this year, the WSJ’s Richard Vanderford reports, with at least 485 million packages entering the U.S. so far this fiscal year after 685 million packages were counted in the entire previous fiscal year. The customs provision allows packages with contents under $800 in value to enter the country duty free under a simplified procedure. Critics say that is helping companies sidestep tariffs and defy bans on imported goods made with forced labor. A House panel estimates that Temu and Shein alone account for about a third of all de minimis shipments. Freight industry officials say the trade has turned the two companies into major forces in trans-Pacific airfreight markets.

 

THE WALL STREET JOURNAL

 

Number of the Day

$2.03 Billion

Approximate fourth-quarter revenue at freight forwarder Kuehne + Nagel International’s sea logistics business unit, a 54% decline from the year-earlier period, leading to a 55% drop in operating profit for the segment.

 

In Other News

The U.S. manufacturing sector weakened last month, while measures for new orders and backlogs contracted. (MarketWatch)

Construction spending fell in January in the U.S. for the first time in 13 months. (MarketWatch)

Manufacturing activity in Australia fell back into contraction in February. (WSJ)

Global carbon-dioxide emissions reached a record high last year as extreme weather led to a substantial increase in fossil fuel use. (WSJ)

A British-owned bulk ship struck last week by Iran-backed Houthi forces sank in the Red Sea with its cargo of fertilizer. (WSJ)

U.K. logistics provider Wincanton says it will back an acquisition offer from GXO Logistics over a lower bid from Ceva Logistics. (Dow Jones Newswires)

Daimler Trucks expects flat earnings this year after overall sales by units fell 9.6% in the fourth quarter. (WSJ)

BNSF Railway furloughed more than 360 mechanical department workers in Kansas and Nebraska. (WSJ)

The United Steelworkers union and Canadian National Railway reached a tentative three-year contract agreement. (WSJ)

Volkswagen expects sales growth to slow to 5% this year from 15% expansion in 2023. (WSJ)

Luxury retailer LVMH is deepening its ties to China as many Western companies are scaling back investment. (WSJ)

Fast-fashion retailer Zara plans to reopen its stores in Ukraine this spring. (WSJ)

Russia is turning to river barges to move some oil for export as tanker capacity dries up. (TradeWinds)

The U.S. Environmental Protection Agency opened applications for $3 billion in grants for zero-emission port infrastructure and equipment. (Maritime Executive)

Container volume at Tailwind Shipping Lines, the container carrier owned by supermarket chain Lidl, has grown 43% since last July. (Splash 247)

Container imports into Port Houston expanded 3% in January from the year before. (Port Technology)

A Pakistani shipyard plans to build the country’s first containership in decades. (Pakistan Observer)

Amazon’s $1 billion industrial innovation fund is stepping up investments in startups that combine artificial intelligence and robotics. (Financial Times)

The Body Shop plans to close 75 stores across the U.K. after the retailer entered the country’s version of bankruptcy protection. (The Guardian)

Off-price retailer TJX expects to deepen its relationship with suppliers as big rivals reduce their physical footprints. (Supply Chain Dive)

 

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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