Logistics Report: Fulfilling Logistics Jobs; Betting on Ocean; Supply Chain Footrace
Date: Monday, May 6, 2019
Source: The Wall Street Journal
E-commerce is driving growth in the logistics jobs market this spring. Warehouse and storage companies added 5,400 jobs and parcel delivery companies boosted payrolls by another 1,000 jobs last month, the WSJ Logistics Report’s Jennifer Smith writes. The gains in operations geared toward managing and distributing online retail goods came as truckers and other industrial freight companies paused their hiring growth to start the spring, part of a bigger ongoing shift in the national market toward service jobs. Broader U. S. hiring in April was led by administrative, healthcare and other similar employment, while goods-producing companies added just 4,000 jobs last month. Logistics hiring trends suggest the biggest share of goods in pipelines are aimed at online shoppers. Warehousing has added nearly 70,000 jobs over the past year, and logistics staffing firm ProLogistix says there’s high demand for workers at major hubs for online goods storage.
Macquarie Infrastructure Partners and Orient Overseas International Ltd. are both placing big bets on global trade. Australia’s Macquerie acquisition of a multiyear concession to run the Long Beach Container Terminal in Southern California comes with a guarantee from seller OOIL that the facility will generate $9 billion in revenue over the next two decades. The WSJ Logistics Report’s Costas Paris writes commitments by a seller to compensate the buyer over volume shortfalls for such a long period are rare. OOIL faced a tough choice because it is selling the terminal to comply with U.S. national security over the acquisition of the Hong Kong-based shipping and ports operator by China’s Cosco Shipping Holdings Co. The $1.78 billion sale hardly seems a gamble for Macquarie, which gains a major gateway for U.S.-Asia trade to go with the Maher Terminals LLC East Coast operation the group bought in 2016.
Supply Chain Strategies
Adidas AG is taking a costly approach to cut through supply-chain bottlenecks that have crimped North American sales. The German company is boosting use of airfreight to speed up shipping of midprice apparel after production fell behind demand growth, the WSJ’s Sara Germano reports, a signal of the urgency of competitive race with Nike Inc. and Under Armour Inc. The company expects the bottlenecks to have a negative impact of up to $446 million over the full year, including the higher costs of expedited transport. Airfreight is usually a tough sell for midprice apparel, but the North American sportswear market is in upheaval as traditional retailers stagger and big suppliers look to ramp up online sales. Adidas, Nike and Under Armour all have emphasized building their direct-to-consumer and e-commerce businesses and have turned to Amazon.com Inc. to boost sales, leaving little room for supply-chain snags.
A major shift in U.S. dairy supply chains is taking a toll on America’s biggest milk maker. Dean Foods Co. has hired bankers to look at its options, the WSJ’s Heather Haddon reports, amid sinking sales and moves by big customers such as Walmart Inc. to open their own dairy plants. Dean’s problems come at a rough time in the dairy industry, with milk prices down over the past five years as U.S. consumption wanes and production expands. The company is being buffeted by big market forces that have kept milk prices down and pushed some big customers to take more control of their production and distribution to guarantee their supply. Dean has tried to cut costs by reconfiguring its network, but that has led to supply disruptions that have unnerved the company’s customers just when Dean is trying to stanch the loss of business and revenues.