By Paul Page
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Maritime operators and their shipping customers are bracing for new backlogs in supply chains already staggered by heavy demand and congestion. Hapag-Lloyd CEO Rolf Habben Jansen tells the WSJ Logistics Report's Costas Paris that the container line has sought to move some ships away from bottlenecks in Southern California to sites such as Oakland but that the congestion is spreading. The problems at gateways are persisting as some retailers are saying supply chain tie-ups are holding back their inventory plans and cutting into revenue. The Port of Oakland says vessel traffic has grown 20% over the past month and that vessels have been waiting up to seven days to reach berths. The surge came while one berth was shut down to install bigger cranes. Schedules suggest the demand will remain high into the early summer, just as carriers and shippers start preparing for the fall peak shipping season.
Even winter storms that took a $350 million toll on FedEx Corp. barely slowed the package giant's rapid growth. The company's quarterly profit nearly tripled in the quarter that included the holidays and revenue jumped 23%, the WSJ's Thomas Gryta reports, and FedEx is projecting that demand will "remain very high for the foreseeable future." FedEx struggled with significant delays after February winter storms sent much of the U.S. into a deep freeze, but the pandemic-fueled surge in online shopping is leading to strong growth and higher prices in a Ground segment that caters to e-commerce shipments. Revenue there jumped 37% and the operating profit nearly doubled to $702 million. FedEx still gets nearly half its overall revenue from its signature Express operation. But the Ground unit's volume grew more than twice as fast at 25%, and the operating profit was also twice that of the Express unit.
Prices for the materials used to build American homes are rising even faster than the red-hot demand for new houses. Lumber costs are more than twice the typical price for this time of year and copper prices are up by about a third since last fall. The WSJ's Ryan Dezember and Marco Quiroz-Gutierrez write that the rising costs stretch to granite, insulation and even brick, which have all pushed to record highs so far this year. The home construction market is providing one sign of the inflation that policy makers are looking for as the U.S. seeks to boost an economy still rebounding from the impact of the coronavirus pandemic. Several materials producers have been raising prices to pass along their higher costs, but they think that historically low borrowing costs and other factors will maintain demand in a market where consumers are still hungry for new homes.
IN OTHER NEWS
Worker filings for new U.S. jobless benefits are hovering near the pandemic's lowest levels. (WSJ)
Oil prices fell by the steepest one-day percentage since September. (WSJ)
Nike Inc. says port backlogs and supply chain disruptions cut into sales growth and delayed inventory flows by more than three weeks last quarter. (WSJ)
Petco Health and Wellness Co. credits a shift of its online business from struggling parcel networks to same-day delivery through DoorDash for a 16% gain in quarterly revenue. (WSJ)
XPO Logistics Inc. will name the contract logistics business it is spinning off GXO Logistics. (Dow Jones Newswires)
Hormel Foods Corp. absorbed $80 million to $100 million in costs from supply chain disruptions as it revamped operations during the pandemic. (Forbes)
HelloFresh SE plans to overhaul its packaging as part of a plan to cut its carbon emissions by 60% by 2022. (Supply Chain Dive)
BASF SE is starting a fund for suppliers to support sustainable cotton farming. (Sourcing Journal)
Net profit at Hapag-Lloyd AG more than doubled to $1.1 billion last year even as container liftings fell 1.6%. (The Loadstar)
Port terminal operator DP World's net profit fell 29% to $846 million last year despite an 11% gain in revenue. (Lloyd's List)
WorldACD says world-wide average air cargo rates were up 84% in February from the year before. (Air Cargo News)
The U.S. may impose new Covid-19 restrictions on Cathay Pacific after FedEx complained about crew quarantine requirements in Hong Kong. (South China Morning Post)
British Airways is exploring the sale of its headquarters as part of a plan to allow staff to split time between home and the office. (Financial Times)
A U.S. labor board says affiliates of Los Angeles-area logistics and port trucking affiliates of Universal Logistics Holdings violated labor law. (Bloomberg Law)
Rail-equipment supplier Wabtec is developing a locomotive that runs on battery power. (Pittsburgh Post-Gazette)
Commodities trader Mercuria says it was defrauded of $36 million when a Turkish supplier shipped paving stones rather than high-value copper ingots. (Maritime Executive)
Paul Page is editor of WSJ Logistics Report. Follow the WSJ Logistics Report team: @PaulPage, @jensmithWSJ and @CostasParis. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at firstname.lastname@example.org
(END) Dow Jones Newswires