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LogisticsLogistics

Amazon Ordering In; Importing Baby Formula; Europe’s Gas Squeeze

By Paul Page

 

Food delivery in Brooklyn, N.Y., in May. PHOTO: ANDREW KELLY/REUTERS

Amazon is inching deeper into meal delivery. The e-commerce giant is adding Grubhub to its suite of Prime services in the U.S., the WSJ’s Heather Haddon reports, providing a needed boost to the food-ordering platform and its Netherlands-based parent Just Eat Takeaway. The operating agreement includes an option for Amazon to take a 2% stake in the U.S. business, and potentially a 15% stake. That means Just East will still own Grubhub and continue exploring a full or partial sale of the business. The expanding menu of Prime services may help draw customers but it’s unlikely to help Amazon’s operations much since there’s little connection to broader logistics operations and profits from delivery remain elusive. Amazon has an agreement in the U.K. and Ireland with British food-delivery company Deliveroo, and has a minority stake in the business, suggesting the e-commerce firm is still scanning the menu for food delivery.

 
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Government & Regulation

Infant formula unloaded at Washington Dulles International Airport following a recent flight from London. PHOTO: JIM LO SCALZO/SHUTTERSTOCK

The makeshift U.S. supply chain for baby formula imports is getting more entrenched. Regulators are devising plans to allow formula manufacturers to ship and sell their products in the U.S. beyond the current shortage. The WSJ’s Stephanie Armour reports that the changes to temporary rules allowing infant formula imports could help strengthen supply chains for the goods that have been vulnerable to disruption. It could also be a boon for manufacturers overseas that have been eager to enter the U.S., while injecting more competition into the concentrated market. Under the new plans, the Food and Drug Administration would provide technical assistance to companies looking to enter the U.S. market and meet this summer with importers and merchants to help determine additional steps to ensure uninterrupted supplies. The federal government has been flying in formula made overseas to help ease shortages as domestic manufacturers have sought to restore production.

 
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Quotable

“These unusually historically tight labor market conditions could actually persist for quite a long time.”

— Julia Pollak, chief economist at jobs site ZipRecruiter.
 

Commodities

PHOTO: STEPHANE MAHE/REUTERS

Europe’s energy-intensive industries are jockeying to lock in their share of the continent’s scarce natural gas supplies. Manufacturers of fertilizer, chemicals and aluminum are among those competing for access to gas as Russia cuts deliveries. The WSJ’s Matthew Dalton and Kim Mackrael report there is no shortage right now in Europe but that companies are trying to stock up and ensure supplies amid fears that Russia will continue to limit shipments, pressuring stockpiles as colder weather later in the year increases consumer demand. Europe has yet to devise a plan for how to share the limited supplies beyond certain priorities such as hospitals and schools. The continent got a reminder of the fragile state of supply this week when Norwegian oil workers went on strike, threatening the country’s gas exports and sending prices soaring. The government quickly halted the walkout after it dented the country’s exports.

 
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Number of the Day

$3.92 Billion

Orient Overseas Container Lines second-quarter revenue on trans-Pacific services, up 73.7% from the year-ago quarter on a 12.1% decline in container volume.

 

In Other News

Job openings and the number of times workers quit their jobs declined in May but remained historically high. (WSJ)

A measure of growth in the U.S. services sector slipped to its lowest level in two years in June. (MarketWatch)

British Airways is scrapping another 10,300 flights from its summer schedule as airlines grapple with overwhelmed operations. (WSJ)

Rivian Automotive sharply scaled up production to 4,401 electric vehicles in the second quarter. (WSJ)

President Biden plans to nominate Denver airport chief Phil Washington to lead the Federal Aviation Administration. (WSJ)

The Biden administration put the finishing touches on a roughly $90 billion bailout of multiemployer pension plans that includes truck drivers and other workers. (WSJ)

Growing labor strife at transport and industrial operations is posing new risks to supply chains. (Bloomberg)

Tesla suspended some production at its Shanghai factory to upgrade its assembly line. (South China Morning Post)

Clive Data Services says global air cargo volume fell 8% in June and that airfreight rates are plunging on major trade lanes. (Air Cargo News)

Mediterranean Shipping Co.’s terminal business is proposing a $6 billion plan to develop a large container facility at Vietnam’s Ho Chi Minh City port. (Port Technology)

Singaporean shopping app Shopee has opened five distribution centers in Brazil to improve shipping and cut lead times. (Reuters)

Seattle-based warehouse space-sharing startup Flexe raised $119 million in a Series D funding round at a valuation of $1 billion. (Crunchbase)

Nintendo blames a 33% decline in quarterly sales of its Switch game system on supply-chain problems. (Nikkei Asia)

 

About Us

Paul Page is editor of WSJ Logistics Report. Write to 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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