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Getting Vaccines to Africa; Flooding Reaches Apple; Cutting Car Inventories

By Paul Page

 

Workers offload the first Johnson and Johnson coronavirus vaccine doses at OR Tambo airport in Johannesburg, South Africa in February. PHOTO: ELMOND JIYANE/REUTERS

Covid vaccine manufacturers are taking halting steps to bring their supply chains to Africa. Pfizer and partner BioNTech will do some of the production of their doses in South Africa starting next year, the WSJ’s Alexandra Wexler reports, as the companies join an effort to bring more shots to a continent left behind in the global fight against the pandemic. The deal follows growing pressure for drugmakers to do more to tackle global inequities in accessing vaccines. Just 1.5% of Africa’s 1.3 billion people have been fully vaccinated against Covid-19, and deliveries from the World Health Organization-backed Covax program are far behind schedule. The agreement only partly addresses demands from African officials to have more control over their vaccine supply chains. The drug substance for the two-dose Pfizer-BioNTech shot will be shipped in from Europe, and the Cape Town-based Biovac Institute will fill vials and ready them for final delivery.

 
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Manufacturing

The city of Zhengzhou on Wednesday. PHOTO: AGENCE FRANCE-PRESSE

Deadly flooding in central China is reaching Apple’s supply chain. The deluge that has killed dozens in China’s Henan province cut power temporarily at the electronic giant’s biggest iPhone manufacturing site, the WSJ’s Stephanie Yang reports, marking the latest in a series of natural disasters that have buffeted manufacturing and distribution operations around the world this year. The potential disruption arrives as Apple suppliers start to gear up for this year’s new iPhone models, expected to be launched in the fall. Taiwan-based Foxconn Technology Group operates three factories in Zhengzhou city with hundreds of thousands of workers who produce more than half the world’s iPhones at the sites. Initial damage appears limited, in part because workers moved production equipment and inventories to protect them from rising waters. The disaster follows recent severe flooding in Europe that continues to disrupt regional shipping operations across parts of the continent.

 
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Quotable

“Consumers have a lot of cash and seem eager to spend on activities they couldn’t do for 18 months.”

— Oren Klachkin of Oxford Economics
 

Supply Chain Strategies

The global semiconductor shortage could trigger lasting changes in automotive supply chains. CEO Mike Jackson of car dealer heavyweight AutoNation says there is a “very healthy discussion going on” over a system that pushes hefty inventories to sprawling dealer lots. The WSJ’s Jinjoo Lee writes in a Heard on the Street that AutoNation and rival Lithia Motors are showing little impact from a chip shortage that has roiled auto manufacturers, with both reporting record revenue and profits. Dealers are working with less overhead and lower expenses as they sell cars at a faster pace and at higher prices. To Jackson, that could spur more use of digital sales tools that can keep down inventory costs. Manufacturers are still straining, however. General Motors says it is pulling back production of its big money-making pickup trucks because of short chip supplies, leaving less inventory heading toward dealers.

 
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Number of the Day

$108.6 Billion

Total value of North American transborder freight flows in May, up 93.8% from May 2020 but down 1.1% compared to 2019, according to the U.S. Bureau of Transportation Statistics.

 

In Other News

The U.S. dollar is nearing its highest levels for the year against other major currencies. (WSJ)

Trucker Knight-Swift Transportation lifted its outlook after second-quarter net profit nearly doubled to $152.8 million on a 24% gain in revenue. (Dow Jones Newswires)

Second-quarter earnings at CSX more than doubled to $1.12 billion and the freight railroad shaved its operating ratio to 43.3%. (Dow Jones Newswires)

Coca-Cola raised its annual outlook as quarterly sales topped revenue for the same period in 2019. (WSJ)

J.B. Hunt Transport Services has limited service to some customers because of capacity constraints. (Supply Chain Dive)

BMW says the semiconductor shortage is holding back production of about 10,000 cars. (Reuters)

Taiwan Semiconductor Manufacturing is moving to add a chip plant in Japan to supply Sony. (Nikkei Asia)

Foxconn and Japanese manufacturer Nidec are in talks over a Taiwan-based joint venture to build motors for electric vehicles. (Financial Times)

Experts say record-high container rates are pricing some U.S. importers out of the trans-Pacific market. (Journal of Commerce)

U.K. freight forwarder Allseas Global Logistics is paying $100,000 a day to charter a small container ship for trans-Pacific transport. (TradeWinds)

The head of the Georgia Ports Authority says the crush of imports into the U.S. is likely to last into 2022. (Bloomberg)

Loaded container imports into the Port of Virginia rose 45.8% in June but slipped 4.3% from May’s inbound volume. (Maritime Executive)

Australia’s federal government rejected plans for a new container terminal at the Port of Newcastle. (Port Technology)

Korea Shipbuilding & Offshore Engineering swung to a $626 million second-quarter loss largely on rising steel costs. (Lloyd’s List)

Tesla is preparing to start production of its Semi heavy-duty electric truck. (Electrek)

Grocery chain Giant Eagle plans to convert all its trucks to alternative-energy power. (Transport Dive)

Steve McCormick will retire as president and CEO of Yum Brands provider Restaurant Supply Chain Solutions and will be succeeded by COO Todd Imhoff. (Business Journals)

Police seized a large drone being used to fly up to 150 kilos of narcotics from northern Africa to southern Spain. (El Pais)

 

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, @jensmithWSJ and @pdberger. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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