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Amazon Gets Healthy; Rail Merger Driver’s Seat; Lumber’s Capacity Restraint

By Paul Page

 

An Amazon warehouse in DuPont, Wash. PHOTO: TED S. WARREN/ASSOCIATED PRESS

Amazon is trying to make its warehouses safer for workers. The e-commerce giant is establishing a program focused on improving the health and wellness of its distribution center staffers, the WSJ’s Sebastian Herrera reports, a move that follows years of criticism of working conditions inside its sprawling logistics network. Amazon says reports of unsafe warehouse operations are inaccurate. The program aimed at avoiding workplace injuries and improving mental health on the job could have a far-reaching impact across the logistics sector. That's in part because of Amazon’s sheer size, but also because the data the company collects and its operations may have a strong influence on the broader market for logistics workers. Some of the new programs Amazon has been testing involve ongoing worker training. But the company is also developing staffing schedules that rotate employees among jobs that use different muscle groups to reduce repetitive stress injuries.

 
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Transportation

PHOTO: CHRISTINNE MUSCHI/BLOOMBERG NEWS

Canadian National Railway appears to be in the driver’s seat in freight rail consolidation. Kansas City Southern has declared the railroad operator’s roughly $30 billion takeover bid superior to a rival proposal, the WSJ’s Dana Cimilluca and Cara Lombardo report, in a step that sets a new deadline for Canadian Pacific Railway to either sweeten its own offer for the smaller U.S. carrier or walk away with a breakup fee. The rival bids are the latest attempts to break an effective moratorium on consolidation among major U.S. railroads that has lasted for more than two decades. The U.S. Surface Transportation Board is moving forward with its regulatory process, approving a voting trust proposed as part of the Canadian Pacific deal. Kansas City Southern switching its allegiance signals a belief that the STB will also bless a trust for Canadian National, and keep the consolidation process on track.

 
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Quotable

“Trying to build capacity and make investments that have a lot of lead time at the top of a cycle is historically a good way to lose money.”

— Chad Hesters of consultancy Korn Ferry on sawmill output limitations
 

Commodities

Loading lumber at a story in Lake Charles, La. PHOTO: BRYAN TARNOWSKI/BLOOMBERG NEWS

The lumber market is defying conventional views of supply and demand. Sawmills can't keep up with surging demand from the construction industry that has sent wood prices skyrocketing, but they aren't racing to expand capacity, the WSJ’s Ryan Dezember writes. Lumber companies say they are content to rake in cash rather than adding mills that can cost hundreds of millions dollars and take two years to build. Sawmills are instead moving to bring more products to market by boosting efficiency and output at existing mills. Their caution in investing in new processing plants is the result of unusual volatility in commodities markets, in which companies make long-term plans based on expectations for relatively stable demand. The coronavirus pandemic has upset that balance, and wood processors are the latest to show reluctance to add capacity. 

 
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Number of the Day

585,783

Empty containers, in 20-foot equivalent units, exported from the ports of Los Angeles and Long Beach in April, 79% more than the same month last year.

 

In Other News

Mexican retailer Grupo Comercial Chedraui is buying U.S. grocer Smart & Final Stores for more than $600 million. (WSJ)

Ericsson is paying Nokia the equivalent of $97.2 million to settle a damages claim related to corruption allegations. (WSJ)

The U.S. Coast Guard reopened the Mississippi River to barge traffic near the damaged Interstate 40 bridge in Memphis, Tenn., but the span remains closed.  (Daily Memphian)

Small U.S. manufacturers that rushed to produce face masks are stuck with hundreds of millions of face coverings because China is flooding the market with cheap masks. (Reuters)

Amazon has used a freight-partner contractor program that has insulated the company from liability for crashes by third-party trucking providers. (The Information)

AlixPartners estimates the global chip shortage has cost auto companies some $110 billion in lost sales. (Bloomberg)

Rising costs are weighing on Apple supplier Foxconn Technology Group as it seeks to diversify its contract manufacturing business. (Financial Times)

Hapag-Lloyd is adding to the new upturn in container shipping prices with a $3,000 general rate increase next month. (The Loadstar)

Brazilian mining giant Vale is testing the use of wind rotor sails on a large iron ore vessel. (Lloyd’s List)

First-quarter operating profit at South Korea’s HMM soared to $903 million as revenue jumped 84.9% on a 6.7% increase in volume. (Seatrade Maritime)

A 50-car Union Pacific freight train derailed south of Minneapolis. (CNN)

Electronics manufacturer HP will work with autonomous truck supplier Embark to test self-driving vehicles. (DC Velocity)

Bridge Industrial and Canada’s Public Sector Pension Investment Board will develop logistics properties in the U.K. under a $1.4 billion partnership. (Logistics Manager)

Authorities sided with local residents in denying a request for overnight truck operations at a large warehouse northwest of London. (Motor Transport)

Optimal Dynamics raised $18.4 million in a funding round backing expansion of its application of artificial intelligence to logistics. (VentureBeat)

Latvian charter passenger carrier Smartlynx Airlines is leasing five A330 jets without seats to operate them as virtual freighters. (Simple Flying)

The central London store known as the “mad sailor shop” is shutting down after nearly 500 years of selling maritime goods. (WSJ)

 

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, @CostasParis. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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