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Creditors Get in Line; Fading Bulk Markets; Online Roll-Up Unravels

By Paul Page

 

Yellow’s unsecured creditors include a Tennessee company that provides fencing. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES

Mesquite, Texas, and its $81.21 bill for bankrupt trucker Yellow will have to get in line. The city is one of hundreds of unsecured creditors that have filed claims in bankruptcy court for debts the failed trucking company owes, a list topped by BNSF Railway and its request for $6.3 million. The WSJ Logistics Report’s Paul Berger writes the long lineup of creditors includes service providers, equipment suppliers and others that were doing business with Yellow even as the trucker’s business crumbled over the summer before it ceased operations in late July. Yellow’s secured creditors have a reasonable prospect of getting repaid in full under the sale of assets. But the multiemployer Central States Pension Fund is preparing a multibillion-dollar claim for Yellow’s unfunded vested benefit liability, casting a financial cloud over payouts. The Central States claims could significantly dilute what if anything is left for Yellow’s other creditors.

 
CONTENT FROM: Cathay Pacific Airways
Cathay Cargo is using innovation to stay ahead of the curve.

With unprecedented travel restrictions, supply chain disruptions and rising fuel prices, it's no secret that aviation has had a tough few years. In this conversation with Tom Owen, learn how one of the world's busiest cargo airlines is leveraging technology to produce leading solutions and navigate these turbulent times.

Discover More

 

Transportation

Iron ore being unloaded at China’s Taicang port near Shanghai. PHOTO: CFOTO/ZUMA PRESS

Bulk-shipping operators are losing hope that China will bail them out. Shrinking trade volume is punishing the carriers that feed the world’s second-largest economy with raw materials, the WSJ’s Costas Paris reports, with the rates those vessel owners charge sinking this week to the lowest level in months. The biggest impact is coming from China’s struggling real-estate sector, a major driver of seaborne iron-ore shipments. Shipowners say there are no other global markets to take China’s place for dry-bulk sailings, leaving operators with too many vessels and paying the price for a supply-demand imbalance. Daily freight rates for the sector’s largest capesize ships fell this week below $10,000 for the first time since early June. They are down 40% since the start of August. London-based shipbroker Braemar says there is a glut of ships in the Pacific, while few vessels are being chartered in the Atlantic.

  • A measure of factory activity in China edged upward in August but remained in contraction territory. (WSJ)
  • South Korean authorities are investigating the co-CEOs of bulk carrier Polaris Shipping for alleged embezzlement. (Splash 247)
 
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Quotable

“I think the best is yet to come and the worst is yet to come. It’s going to be a lot of change.”

— Brownsville, Tenn. construction worker Brian Hayes, on the transformation of southern U.S. towns as electric-vehicle factories spread across the region.
 

E-Commerce

Amazon orders, aggregated in New York. PHOTO: BRENDAN MCDERMID/REUTERS

The end of the pandemic-driven boom in e-commerce demand is rocking businesses that had jumped onto the online bandwagon. Benitago, one of a slew of investment groups that acquire Amazon third-party sellers, just filed for bankruptcy, less than two years after raising $325 million in funding. The WSJ’s Becky Yerak reports the New York-based firm listed both assets and liabilities ranging from $50 million to $100 million. Benitago had raised a total of $380 million in two funding rounds in 2021. The company is part of a lively wing of the e-commerce market in which investors buy small Amazon sellers and run them as a group. Research group Marketplace Pulse says aggregators raised more than $16 billion over the past four years. Funding has dried up as online spending has receded, however, and analyst group CB Insights says the market for roll-ups “is unraveling,”

 

Number of the Day

$8.9 Billion

Cumulative profit for container shipping lines in the second quarter, down 35.2% from the first quarter and 85.9% behind the record $63.1 billion record earnings in the second quarter a year ago, according to shipping analyst John McCown.

 

In Other News

Unionized dockworkers ratified the six-year labor agreement with employers at West Coast ports. (WSJ)

U.S. household spending rose 0.8% in July, the fastest pace since January. (WSJ)

India’s massive spending push on infrastructure helped boost economic growth to 7.8% for the second quarter. (WSJ)

The U.S. plans to provide up to $12 billion for automakers to retrofit manufacturing facilities for the production of electric and hybrid vehicles. (WSJ)

Dollar General is looking to reduce inventories after quarterly sales slowed and unsold goods piled up. (WSJ)

South Korea’s exports fell an estimated 11.6% in August. (Reuters)

Kia supplier Daesol Ausys is building a plant in Georgia to make parts for the Korean automaker. (Atlanta Journal-Constitution)

Food supplier Tyson Foods will centralize areas such as transportation and warehousing under fresh meats head Brady Stewart. (Bloomberg)

Hershey plans to invest $1 billion in its supply chain to expand candy production. (Supply Chain Dive)

Containerships operated by Maersk Line and Hapag-Lloyd were among commercial vessels caught up in the coup in Gabon. (Maritime Executive)

Port facility operator International Container Terminal Services took out a $750 million loan​ to back its acquisition plans. (TradeWinds)

A small group of drivers at Werner Enterprises subsidiary ECM Transport voted for union representation. (Trucking Dive)

Fuel marketing business Maverik acquired Iowa-based petroleum hauler Solar Transport. (Commercial Carrier Journal)

 

Special Report: Navigating AI

Generative AI is playing an increasingly important role in the workplace. Here’s how businesses can leverage this transformative technology while managing its risks and rewards:

  • Generative AI Promises an Economic Revolution. Managing the Disruption Will Be Crucial
  • AI Fuels New Brand-Safety Worries, and Would-Be Solutions, for Marketers
  • Chatbots Are Trying to Figure Out Where Your Shipments Are
  • Artificial Intelligence Steps In to Lower Carbon Footprint of Buildings
 

Note to readers: We will not publish a newsletter on Monday in observance of the U.S. Labor Day holiday. We will be back on Tuesday.

 

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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