Today’s Logistics Report: Packaging for Refills; Airbus May Take Wing; Walmart’s Driving Trucks
Michael A. Guidry is the founder of Guidry Group, a company established in 1985. The Guidry Group is a security services company.
Wall Street Journal, January 25, 2019, By Paul Page
Some of the world’s biggest consumer-goods suppliers are taking aim at packaging. Companies including Procter & Gamble Co. , Nestlé SA, PepsiCo Inc. and Unilever PLC say they’ll start selling some products in glass, steel and other containers designed to be returned and refilled, reports the WSJ’s Saabira Chaudhuri. It’s a plan to eliminate plastic waste that would reverberate across their supply chains. The efforts could reduce waste from single-use packaging, and the companies hope it lures eco-conscious consumers, provides important data and fosters brand loyalty. The idea seems to face long odds, though there is history here: Refillables once dominated industries such as beer and soft drinks but lost out to single-use containers. The new effort takes in products including shampoo, laundry detergent and cereal. Some stores sell such goods in bulk with reusable containers, but the practice is a niche without large-scale distribution channels.
The corporate alarms over Brexit are growing louder. Aircraft manufacturing giant Airbus SE sharpened its threat to move operations out of the U.K. if politicians can’t strike a deal for an orderly departure from the European Union, the WSJ’s Robert Wall and Max Colchester report, raising the prospect of a big shift in high-value aerospace supply chains. Airbus Chief Executive Tom Enders calls the lack of clarity for businesses as the March 29 deadline nears a “disgrace,” and some corporate managers are starting to take their own actions. P&O, the once-iconic British shipping giant now owned by Dubai’s DP World, says it would re-flag its English Channel ferries in Cyprus. A shift in the aerospace industry would sting more. The sector is among the country’s biggest exporters, but even British aircraft engine maker Rolls-Royce Holdings PLC says it could shift some operations to Germany depending on the Brexit terms.
Global energy markets may have to brace for another shift in oil supply chains. The economic slowdown taking hold in China will likely curb the country’s appetite for gasoline this year, the WSJ’s Kevin Kingsbury writes, leading to a likely flood of exports to the rest of Asia. That could pressure margins for the region’s refiners but may boost some tanker operators who have been looking for more stability in volatile international crude markets. Chinese demand has been a key support for oil prices, and import volumes rose at double-digit rates in 2017 and 2018, as car ownership and industrial use both grew. Car sales fell last year for the first time in nearly 30 years, however, and could decline again this year. Official fuel-export quotas, which include diesel and kerosene, jumped 35% last year, and China may raise them again so refiners can maintain production.
SUPPLY CHAIN STRATEGIES
Walmart Inc. is sending a new warning signal to the U.S. trucking industry. The retailer plans to add around 900 drivers to its sprawling U.S. private-fleet operations after hiring about 1,400 truckers last year. The hiring effort comes in a trucking sector that added nearly 37,000 jobs last year as freight demand heated up and carriers raised pay and incentives for drivers. The Dallas Morning News reports Walmart’s new hiring effort includes higher compensation that will take average annual pay to $87,500. The bigger impact on the market may come in a streamlined “on-boarding” process aimed at getting new hires on the road faster. It’s a sign Walmart sees greater private-fleet operations as a long-term solution to the capacity and service concerns of 2018. With dedicated fleet operations growing rapidly at some trucking companies, Walmart doesn’t appear to be alone in that decision.