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LogisticsLogistics

Railroad Strike Averted; Shipping Stolen Wheat; Delivering Electric Trucks

By Paul Page

 

A Norfolk Southern yard in Atlanta in September. PHOTO: DANNY KARNIK/ASSOCIATED PRESS

The freight rail industry has a measure of labor peace, at least for now. Senate lawmakers voted 80-15 to force unions to adopt a tentative contract agreement that had been advanced by the White House. The WSJ’s Katy Stech Ferek and Esther Fung report the measure already approved by the House was headed to President Biden, who said he was prepared to sign any resolution passed by Congress that prevents a strike. The vote sidesteps the potential for a shutdown of major rail operations that could have rattled the economy. Although the bipartisan Senate vote came by a wide margin, there was rancor over the terms and criticism from organized labor over the intervention. Senators rejected a proposal to include additional paid sick days in the previously negotiated agreement. That will leave many rail workers likely girding to fight for the provision in the next contract cycle.

 
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Transportation

A satellite image shows a bulk carrier loading grain at the Port of Sevastopol in May. PHOTO: MAXAR TECHNOLOGIES/via REUTERS

Vessels linked to Russia’s largest grain trader are using an intricate transport network to move thousands of tons of stolen Ukrainian grain to global buyers. A Wall Street Journal investigation has identified a network of feeder vessels and floating cranes linked to Peter Khodykin, who owns RIF Trading House, Russia's largest grain exporter and a big player in global grain markets. The WSJ’s Jared Malsin, Anna Hirtenstein and Alistair MacDonald report the smuggling process builds on operations in Russian-occupied Ukraine, where trucks have moved stolen grain through a clandestine system to Crimea, which Russia annexed in 2014. From Crimea’s Sevastopol port, Russia is using sophisticated maritime operations meant to disguise the origin of cargoes, including vessel transfers at sea. By one estimate, Sevastopol handled nearly 15 times as much grain in a recent six-month period as it did in the same months last year.

 

Quotable

“It’s wheat laundering. They made it really hard to track.”

— Yoruk Isik, head of Bosphorus Observer, a ship-tracking consulting firm, on Russia’s grain-shipping tactics.
 
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Transportation

Tesla CEO Elon Musk unveiling the company's new Semi on Thursday. PHOTO: TESLA/REUTERS

Tesla is entering the heavy-duty truck market after advancing its electric version of a Class 8 vehicle in a decidedly slow lane. The delivery of the first Semi to PepsiCo this week comes five years after CEO Elon Musk unveiled the concept for a sleek, battery-powered commercial vehicle. The WSJ’s Rebecca Elliott reports a PepsiCo unit will use the trucks to support business at its plants in Sacramento and Modesto, Calif. There’s plenty of government support for the effort. PepsiCo is working with a local public health agency to replace diesel-powered trucks and the California Air Resources Board is funding half of the $30.8 million overhaul. The operation will provide a real-world test of Tesla’s claims that the truck can recharge up to 70% of its range in half an hour. The bigger aim is Mr. Musk’s goal of accelerating North American production to 50,000 Semi trucks by 2024.

 
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Number of the Day

420.15

Xeneta’s global XSI index for container shipping contract rates in November, down 5.7% from October in the steepest month-to-month decline since the launch of the index in 2019.

 

Quotable

“All in all, it’s going to be another solid holiday shopping season, with unemployment low and wage growth still solid.”

— Ryan Sweet, chief U.S. economist at Oxford Economics
 

In Other News

A measure of U.S. factory activity fell into contraction in November for the first time since the start of the pandemic. (MarketWatch)

U.S. household spending jumped 0.8% from September to October. (WSJ)

New applications for unemployment benefits in the U.S. fell sharply last week. (WSJ)

The European Commission asked member states to approve a price cap on Russian oil of $60 a barrel. (WSJ)

Kroger raised its annual guidance for the third time this year following strong quarterly sales growth. (WSJ)

More than half of Japanese manufacturers in a survey say they plan to reduce dependence on Chinese suppliers. (Nikkei Asia)

President Biden’s top supply chain adviser, Sameera Fazili, is leaving her White House post. (Politico)

Big Lots will lower prices after sales fell and margins contracted last quarter. (MarketWatch)

Dollar General’s net sales rose 11.1% while inventories rose at more than twice that pace. (MarketWatch)

Morgan Stanley became the second-biggest shareholder in tanker operator Frontline with a $166 million stake. (TradeWinds)

Some Chinese automakers are buying ships to handle their own transportation. (Lloyd’s List)

The Port of Houston pushed back a fee on long-dwelling containers because of software problems. (Journal of Commerce)

The Port of Houston is converting land at its Bayport Container Terminal to a container yard. (Port Technology)

Freight forwarder DB Schenker is streamlining its organization to cut administrative costs. (Air Cargo News)

German automotive parts maker Mann+Hummel Purolator Filters is closing its Fayetteville, N.C., distribution center and laying off about 1,000 workers. (Business Journals)

Private equity-backed 48forty Solutions bought its 12th pallet provider in the past two years. (DC Velocity)

 

Weekend Read: A Survival Guide to Inflation

C-suite executives and other business leaders are facing new challenges in a period in which inflation is sticky, interest rates are rising, the geopolitical landscape is filled with turmoil and economies across the globe are slowing.

  • The C-Suite Survival Guide to Inflation and Economic Turbulence
  • How to Take Advantage of the Logistics and Supply Chain Slowdown
  • CIOs Can Play Key Role in Guiding Companies Through a Slowdown
  • Marketers Must Be Flexible, Without Losing Identity, Amid Uncertainty
  • Zero-Based Budgeting, Currency Hedges Among Tools CFOs Can Use
 

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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