Logistics Report: Self-Driving Jump Start; Winding Down a Trucker; Sweet Supply Chains
Date: Wednesday, February 13, 2019
Source: The Wall Street Journal
The robotic-delivery vehicle business is getting a big financial jump start. Japan’s SoftBank Group Corp. is investing almost $940 million in Silicon Valley startup Nuro Inc., the WSJ’s Tim Higgins reports, providing an infusion that values the three-year-old business at $2.7 billion and boosting tech-industry efforts to launch driverless parcel delivery. Nuro has operated on a different path from high-profile projects to create autonomous passenger cars and self-driving trucks, focusing instead on electric vehicles made for in-town deliveries. The company’s boxy vehicles have no room for passengers but contain compartments that hold groceries and other goods. The Softbank funding follows last week’s investment of $530 million into rival Aurora Innovation Inc., including backing from Amazon.com Inc. Nuro and Aurora are among startups pursuing technology aimed at upending traditional transportation. But they’re challenged to build scale against deep-pocketed companies creating operational infrastructure.
A rising freight market isn’t lifting all carriers. Less-than-truckload operator New England Motor Freight Inc. says it is shutting down after filing for chapter 11 bankruptcy protection, WSJ Logistics Report’s Jennifer Smith writes, removing a big player in the highly competitive and high-cost Northeast U.S. trucking market. The failure of a carrier that counted more than $400 million in revenue in 2017 is the biggest in trucking in 15 years, and it follows a year in which red-hot shipping demand led to big rate increases and strong profits at industry heavyweights. But NEMF, a unionized carrier in a tough market with many non-union operators, says it owes tens of millions of dollars to banks, a union pension fund and fuel distributors. NEMF says it plans an “orderly wind-down of its operations,” a contrast with the abrupt closure of truckers that have triggered confusion in supply chains.
Economy & Trade
If forklift orders are a barometer of economic health, China is getting sick. Pennsylvania-based EnerSys has seen orders for its forklift batteries fall in the past quarter, the WSJ’s Austen Hufford and Theo Francis report, making the manufacturer one of a growing lineup of U.S. companies reporting weaker demand from China. Fourth-quarter results from U.S. companies highlight the many and varied ways that China’s cooling economy has been affecting American business, and offer a glimpse of what’s happening inside China. The indications are that China’s growth is slowing modestly but broadly. as negotiators meet in Beijing this week seeking to resolve trans-Pacific trade tensions. The impact in the U.S. reaches from industrial equipment makers to microchips, as Chinese manufacturers cut back orders to avoid being left with unsold goods, in case the U.S.-China trade dispute yields higher tariffs, and demand for Chinese-made goods falters.
The demise of a candy maker is setting off a scramble in the sweets supply chain this Valentine’s Day. Sweethearts-brand conversation hearts that have been a staple of the season aren’t rolling off conveyer belts since the New England Confectionery Co., or Necco, went out of business, writes the WSJ’s Annie Gasparro. That’s triggering a black market for rare boxes of the tiny wafers with messages like “Be Mine” and new competition from knock-offs. One Massachusetts store owner rushed to buy 1,000 pounds of Sweethearts last summer when she heard the production line was shutting down, and the store is down to 100 pounds that it rations to customers from behind a glass case. Brands like Brachs are rushing in with their own versions. The shortage only proves the business case for the value in scarcity of supply—that absence makes the heart grow fonder.