THIS WEEK IN LOGISTICS
What we’re covering…
- The short-lived slowdown in global warehouse and fulfillment center construction ?
- This week’s featured news stories, including Amazon CEO Andy Jassy committing to cost-cutting in the shareholder letter ?
- Port labor disputes raising new fears over US import disruptions once again ?
- Logixboard’s featured content and upcoming webinar ?
IN THE NEWS
Warehouse Construction Slows Down As Demand Falls
Many new trends emerged as COVID-19 shook the world in 2020-21. One of the most important aspects, at least for supply chain stakeholders, throughout the pandemic, happened to be how consumers, forced into lockdowns, started ordering everything online. With demand increasing exponentially, logistics and supply chain players started investing heavily in increasing inventory and storage space to keep these goods.
But come 2022, inflationary pressures negatively affected this demand growth. Now in 2023, retailers focus on selling excessive inventory as demand slows down. As a result, global warehousing expansion also seems to have slowed down. In fact, a study by a consulting firm has found that higher interest rates and slowing economies are resulting in a short-lived slowdown in global warehouse and fulfillment center construction.
TOP HITS THIS MONTH
Featured blog posts
LOGIXBOARD INSIDER
Want to learn how leveraging data can help you grow your revenue as a freight forwarder? Join our upcoming webinar, “How To Leverage Data To Grow Your Shipping Volumes.”
We partnered with Container xChange’s Dr. Johannes Schlingmeier to discuss how to use data to identify trends and insights, optimize your operations, and drive revenue growth. Register here to lock in your spot for next Thursday, April 27th at 10am PST.
- Amazon CEO Andy Jassy commits to cost-cutting, in the shareholder letter. Amazon is committed to investing in innovative technologies even as it has faced one of its “harder macroeconomic years in recent memory,” Chief Executive Andy Jassy said in his second annual letter to shareholders.
- The Teamsters union has told UPS it won’t enter national negotiations with the delivery giant until agreements on regional contracts have been finalized. The union said out of 40 supplements to the national contract nationwide, 30 remain unresolved.
- Philadelphia truck break-in ends in parking lot dime heist. Thieves made off with a chunk of the cargo and left coins scattered around a Philadelphia parking lot, authorities said. Authorities say the thieves apparently fled with at least $100,000.
- Container spot rates from Asia to North Europe increased again this week, and some carriers are holding off quoting for May shipments ahead of anticipated general rate increases (GRIs). Drewry’s WCI North Europe component edged up 4% on the week, to $1,598 per 40ft, however, forward quotes for late April sailings from China are coming in significantly higher than the spot.
- Canadian Pacific and Kansas City Southern officially merge. Canadian Pacific Kansas City (CPKC), the combined company network will span across both coasts of Canada, traverse through the US Midwest, and reach several points in Mexico, including the Port of Lázaro Cárdenas on Mexico’s Pacific coast.
ON OUR RADAR
Port Labor Disputes Raise New Fears Over US Import Disruptions Once Again
Global supply chains have been constantly bombarded with disruptions throughout 2020-22. Starting from COVID-19 induced delays and restrictions, to port congestion, labor shortage, labor disputes and more, logistics and supply chain players have had to deal with various obstacles due to world events. Now, port labor disputes raise new fears over US import disruptions once again. A brief stoppage on the docks at Los Angeles and Long Beach highlights frustrations over contract talks that have stretched to nearly a year.
Flaring labor tensions at West Coast ports are sparking fears of growing work stoppages that would hobble the flow of goods through some of the country’s biggest trade gateways as importers prepare for the year’s busiest shipping season. Importers are increasingly concerned about a series of targeted labor actions that have disrupted major ports while contract talks between employers and dockworkers approach the one-year mark with little sign of progress.
Importers got a taste of port disruptions when dockworkers in key positions failed to show up for shifts at the nation’s busiest container port complex at Los Angeles and Long Beach on the evening of April 6 and into the next day, effectively shuttering operations for 24 hours. The chapter of the International Longshore and Warehouse Union that represents most Los Angeles and Long Beach dockworkers said its members were attending a regularly scheduled meeting Thursday evening and that some workers were absent Friday in observance of Good Friday. The Pacific Maritime Association, which represents port employers, said no such meeting had been scheduled Thursday and that Friday wasn’t a holiday.
These dispute highlight serious labor tensions that have been threatening operations across various facilities globally. The conflicts appear to be growing just as importers are making decisions on how to route goods into the country for the peak shipping season, which begins in a couple of months, when retailers stock up for the fall and the holiday sales period.
Retailers and some shipping industry officials have called on the Biden administration to take a more active role in the talks and to help broker a deal. Representatives for the U.S. departments of Transportation and Labor said administration officials are in regular contact with both sides, but said the talks are ”a private process.”
