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Trade Strains Hit Mattress Market; Amazon Finds Profits Beyond Goods

By Paul Page

 

The wholesale value of mattresses sold in the U.S. in 2023 fell 6.8% from the previous year. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

Trade conflicts between the U.S. and China are reaching into the bedroom. American retailers and manufacturers say Chinese companies are flooding the country with cheap mattresses, forcing some domestic companies to abandon the entry-level mattress market and to cut jobs. The WSJ Logistics Report’s Paul Berger writes that U.S. trade officials are due to issue a decision this week on efforts by Chinese companies to evade tariffs by setting up production in other countries even as customs investigates transshipment efforts. Mattresses are among a range of products that the U.S. is concerned about beyond the high-profile disputes over imports of semiconductors, electric vehicles and other high-value goods. Industry executives say the low-price bedding is cutting into a troubled market that’s been reconfigured in recent years by the growing sale of cheap mattresses through online channels. The sector is also sagging under the ongoing slump in the U.S. housing market.

  • U.S. chipmaking equipment manufacturers have become more dependent on the Chinese market despite Washington's export restrictions. (Nikkei Asia)
 

Quotable

“The import of cheap mattresses is still happening, but how, I just don’t know exactly.”

— Frank Chen, CEO of Sinomax USA
 
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E-Commerce

Amazon’s rebound in retail sales has helped push the company’s market capitalization past the $2 trillion mark. PHOTO: MIKE BLAKE/REUTERS

Amazon will be selling a lot of goods this week, but the focus on future profits is elsewhere. This year’s Prime Day sale event that starts Tuesday is expected to net Amazon about $13.3 billion in global sales, up 6% from last year. The WSJ’s Dan Gallagher writes in a Heard on the Street column that the e-commerce giant has stabilized retail profits, but its advertising and cloud businesses are much stronger contributors to the bottom line. Corporate cloud-computing demand and the burgeoning AI market are expected to drive Amazon Web Services revenue up nearly 18% this year compared with 13% growth last year. Amazon’s operating income has also surged by triple-digit percentages over the past four quarters and is expected to hit more than $62 billion this year. The results highlight economic shifts in which the strongest profits aren’t necessarily found in boxes of goods.

 
 

Number of the Day

413,833

Loaded container imports into the Port of New York and New Jersey in May, up 17.8% from last year and the highest level for inbound volume since September 2022.

 

In Other News

Producer prices rose 0.2% in June after remaining unchanged in May. (Dow Jones Newswires)

A measure of U.S. consumer sentiment fell this month to an eight-month low. (MarketWatch)

The head of the dockworkers’ union at East and Gulf coast ports warned the likelihood of a strike this fall is growing. (Dow Jones Newswires)

Cost-cutting helped Swedish telecom equipment maker Ericsson raise profits last quarter even as sales fell 7.1%. (WSJ)

Lufthansa cut its outlook for the year but says Lufthansa Cargo is hitting forecasts. (WSJ)

Dollar General will change storage practices as part of a $12 million settlement with federal regulators over safety violations. (WSJ)

Iran released the Chevron-chartered tanker that it seized in international waters 15 months ago. (Reuters)

Ukraine seized a cargo vessel that it claims carried “looted agricultural products” from its Russian-occupied territories. (Maritime Executive)

U.S. regulators halted the operating alliance between Maersk Line and Hapag-Lloyd set to take effect this week  while they seek more information. (gCaptain)

Chinese battery giant CATL is talking with overseas sovereign wealth funds and private investors about raising $1.5 billion to build a global supply chain. (Financial Times)

The U.S. is giving Volvo $208 million to back production of electric heavy-duty trucks at its U.S. factories. (Cardinal News)

A federal judge sentenced Chris Kirchner, founder of once high-flying logistics technology startup Slync, to 20 years in prison for fraud and ordered him to pay $65 million in restitution. (Forbes)

The rate of trucking companies leaving the business slowed in May and June. (Trucking Dive)

Danish freight forwarder Scan Global Logistics is expanding into Brazil with the acquisition of Sao Paulo-based Blu Logistics. (Air Cargo News)

Mexican apparel suppliers suffered roughly $4 million in losses as Hurricane Beryl swept through the Yucatan Peninsula. (Sourcing Journal)

U.K. manufacturer Dyson plans to lay off about 1,000 people, a third of its workforce. (BBC)

Sales at industrial materials distributor Fastenal were flat last quarter. (Barron’s)

 

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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