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Congress Acts on Railroads; Retailers Loving Inventory; China’s Covid Fallout

By Paul Page

 

CSX-owned tracks near Bowling Green, Ky. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS

A congressional effort to avert a freight rail strike is in the hands of the U.S. Senate. House lawmakers approved by a wide margin a measure aimed at ending a long-running railroad labor dispute while also backing a proposal to impose seven days of paid sick leave. The WSJ’s Katy Stech Ferek and Esther Fung report the two proposals head to an evenly divided Senate, where the timing of votes wasn’t immediately set. The separate measure on leave would add to the benefits portion of the contract agreement that has been in sharp dispute, but it faces uncertain prospects among senators. The chamber has until Dec. 9 to act but Senate leaders suggest they want to move quickly. The standoff appears to be affecting freight rail volumes, with carload and intermodal traffic down sharply in the past week, according to the Association of American Railroads.

 

Quotable

“This will be a problem that will continue to boil until the next labor agreement.”

— Thomas Kohler, a law professor at Boston College Law School, on the paid sick leave provision in the rail labor agreement.
 
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Supply Chain Strategies

PHOTO: RICK BOWMER/ASSOCIATED PRESS

Some retailers are learning how to stop worrying about excess inventory and love their well-stocked shelves. Although many merchants are discounting heavily and trying to clear a glut of goods, the WSJ Logistics Report’s Liz Young writes that a growing number of storefronts’ stocks are brimming as they head into the holidays after supply-chain disruptions left them short last year. Upbeat comments from retailers including Dick’s Sporting Goods and Walmart signal that strains in supply chains have eased and that many companies now are focused on taking advantage of consumer demand. That demand appears resilient despite inflationary pressures across the economy, and retailers don’t want to be left short-handed after two years of volatility. Some companies say suggestions of overstocking are overstated, particularly since fewer goods are stuck in supply-chain bottlenecks. Nike’s inventories jumped 44% last quarter, for instance, but the sportswear company considers only about 10% of that to be excess.

 
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Manufacturing

An airport worker at the Beijing Capital International Airport this week. PHOTO: MARK R CRISTINO/EPA-EFE/SHUTTERSTOCK

The turmoil from China’s strict anti-Covid measures is reaching factory floors. Auto makers in China including Volkswagen and Honda have halted production at some plants, the WSJ’s Selina Cheng reports, as the impact of the country’s Covid restrictions rolls across a wider swath of the industrial sector. Toyota is also adjusting production at some factories in China because of the disruptions, which have bruised China’s reputation for stability in its manufacturing operations. Apple has said its iPhone shipments will be lower than expected because of the lockdowns and protests at a Foxconn plant in central China. Airbus says lockdowns are affecting its local suppliers and weighing on the plane maker’s ability to deliver aircraft on time. Airbus is now assessing how to dual-source some components it gets from Chinese suppliers amid logistical challenges caused by China’s zero-Covid policy as well as heightened tensions between China and the West.

  • Gauges of activity in Chinese manufacturing, services and construction deteriorated more than expected this month. (WSJ)
  • U.S. Commerce Secretary Gina Raimondo says the U.S. is not seeking to decouple from China. (WSJ)
 
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Number of the Day

$5.141

Average U.S. price per gallon for diesel fuel in the past week, 9.2 cents lower than the previous week and the lowest price since the week of Oct. 3, according to the Energy Information Administration.

 

In Other News

The U.S. economy expanded at a faster pace in the third quarter than previously estimated. (WSJ)

U.S. imports rose 0.9% in October while exports plummeted 2.6%. (MarketWatch)

Layoffs across the U.S. expanded in October but remained at a historically low level. (WSJ)

India’s economic growth slowed to 6.3% in the September quarter. (WSJ)

Amazon CEO Andy Jassy says he doesn’t regret the company’s hiring spree in recent years even as it now undertakes corporate layoffs. (WSJ)

Food-delivery platform DoorDash is cutting 6% of its corporate staff, or about 1,250 workers. (WSJ)

Retailer H&M is cutting around 1,500 jobs from its global workforce. (WSJ)

The GM Cruise driverless-car unit is seeking regulatory approval to test a shuttle that has no steering wheel or manual controls. (WSJ)

Maersk Line and IBM shut down their blockchain-enabled TradeLens global trade platform. (Maritime Executive)

European regulators agreed to a plan to include shipping in the continent’s emissions trading system. (Splash 247)

Ocean Network Express has started operating a container ship with a large wind deflector mounted on its bow. (Port Technology)

Port of Los Angeles chief Gene Seroka expects a contract agreement with dockworkers to be reached by February. (Bloomberg)

Japan’s Mitsui OSK Lines plans to invest $2.9 billion in its real-estate business and shrink its exposure to volatile ocean shipping. (Nikkei Asia)

Container ship owner Costamare is starting a dry bulk operating platform. (ShippingWatch)

Rising jury awards in highway crash cases are sending insurance rates for trucking companies spiraling upward. (Fleet Owner)

Florida-based OneRail raised $33 million in a Series B funding round backing its last-mile software business. (Logistics Management)

Developers are proposing an intermodal terminal with 850,000-square-feet of warehouse space in Jacksonville, Fla., for an unnamed tenant. (Jacksonville Daily Record)

 

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 Twitter at @WSJLogistics.

 
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