Hurricane Effects on Logistics
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Hurricane Effects on Logistics

Today’s Top Supply Chain and Logistics News From WSJ

Delivering up-to-the minute news, analysis, interviews and explanatory journalism on logistics, supply-chain management, e-commerce and more

 

 

Freight businesses are still coping with the after-effects of one hurricane as they prepare for another. Trucking costs in the U.S. Gulf Coast region are surging in the wake of Hurricane Harvey, WSJ Logistics Report’s Jennifer Smith writes, as rigs get diverted to the Texas recovery effort and another storm approaches the Florida coast. The spot-market price to ship on a tractor-trailer from Dallas to Houston jumped 66% in the past week, according to online load board DAT Solutions LLC, the result of high demand for relief supplies and the severe imbalance of serving a region that’s producing little to pay for return trips. Diesel fuel prices also are rising fast because of shortages caused by the shutdown of refineries and delivery networks. Freight operators should get a boost as demand for construction materials grows with the rebuilding effort. Florida is bracing for its first hit of the hurricane season, meantime, as Hurricane Irma approaches with historic force after walloping islands in the Caribbean. Freight railroads are working under a rail emergency situation and ports as far north as Savannah, Ga., are prepared to shut down if the storm turns up the coast.

The Rubbermaid supply chain hasn’t been as flexible as the company’s products.Newell Brands Inc., which makes Rubbermaid containers, Elmer’s glue and other household goods, says it is suffering a shortage of resin after suppliers in Texas and Louisiana shut down in the wake of Hurricane Harvey. The WSJ’s Sharon Terlep reports the shortage is cutting into production and will hit the company’s earnings this year. Newell’s problems highlight the questions over risks that companies face as they build supply chains and seek to balance the economic advantages of lean strategies with preparation for potential disruptions like the hurricanes in the southern U.S. and recent monsoons in India. Resin prices were already at high levels this year, raising Newell’s production costs. The company says it is seeking alternative suppliers, “with some early success.” But Newell’s costs will rise, leaving Harvey’s imprint on the company’s bottom line.

 
CSX Corp. says it’s suffering right along with its customers from the freight railroad’s summer service slowdown. The carrier pulled back some financial targets for the year, the WSJ’s Paul Ziobro reports, saying the operating problems that have cost the railroad business and angered its shippers are offsetting the cost savings that new Chief Executive Hunter Harrison is pushing through the system. The leaner profit outlook is winning applause from investors—shares were up on Wednesday on the news that CSX is seeing gains in some operating metrics—but the railroad faces a challenge in soothing customers that have been hit by congestion, delays and erratic service in recent months. CSX insists the big changes have been made and the system should now be running more smoothly. That will help CSX’s earnings later in the year, if shippers buy into the improved performance.
 
E-COMMERCE

 

Amazon.com Inc. is betting that the city that never sleeps won’t stop shopping. The e-commerce giant is opening its first fulfillment center in New York on Staten Island, the WSJ’s Cara Lombardo and Mara Gay report, putting Amazon’s logistics network in close range of millions of residents in one of the nation’s largest metropolitan areas. The facility, due to open next year, puts a spotlight on the rapid expansion of Amazon’s network of distribution centers over the past year and on the push by online sales operations to bring fulfillment centers closer to population centers to meet tougher demands for fast delivery. Startups like ShipBob, which has a fulfillment center in Brooklyn, and other operators are opening distribution sites around the country with the idea of offering retailers warehouse space and logistics services near city centers. Amazon will still be far from Broadway, of course, but the Staten Island site will raise the company’s presence in a major economic area, and likely set up Amazon for a stronger reach into the rest of the state.

 


REFERENCE LINK: 

https://www.wsj.com/articles/todays-top-supply-chain-and-logistics-news-from-wsj-1504781278

 

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