Today's Top Supply Chain and Logistics News From WSJ
By Paul Page
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Relief efforts in Puerto Rico are triggering new debates on U.S. shipping policy in Washington. President Donald Trump is weighing permitting foreign-flagged vessels to ship supplies from U.S. ports to the hurricane-ravaged island, the WSJ's Natalie Andrews reports, as companies say the biggest hurdles to delivering goods are the severely damaged infrastructure and tight fuel supplies. The protections for U.S. carriers are in the law known as the Jones Act, and the Department of Homeland Security hasn't waived the act for Puerto Rico as it did a few weeks ago for Texas and Florida after those states were hit by hurricanes. Crowley Maritime Corp., which benefits from the Jones Act protections, says it has a steady pipeline of goods arriving at San Juan's port, where hundreds of shipping containers have been piling up because trucks can't carry them to inland points. More cargo ships are arriving in the coming days, along with tankers with desperately needed fuel, shipments that will raise the pressure to clear distribution channels on the island.
Hurricane Maria's impact on Puerto Rico is starting to ripple into pharmaceutical supply chains. Manufacturer Baxter International Inc. says it has lost "multiple production days" on the storm-ravaged island that will delay shipping of intravenous fluids that were already in short supply on the U.S. mainland. Puerto Rico is home to many pharmaceutical factories that supply the U.S. and other markets, the WSJ's Peter Loftus and Jonathan D. Rockoff report, and federal authorities are moving to guard against potential drug shortages, including working with companies to ensure products are shipped. Several big drugmakers have said their facilities weathered hurricanes Irma and Maria without much trouble. Companies including Bristol-Myers Squibb Co. say they've used contingency plans to keep supplies stocked and moving, and Baxter says it moved finished goods off the island ahead of this year's big hurricanes. The manufacturers are assessing their inventory, but they need to restore production to get their pipelines moving again.
The iPhone supply chain is locking up just when it's supposed to be shifting into high gear. Apple Inc. is hitting a new production snag with components crucial to its new iPhone X, the WSJ's Yoko Kubota reports, potentially adding to expected supply shortfalls for a device that's already been hit with component problems early in its manufacturing cycle. Now, barely more than a month before the phone's release, Apple is facing problems with components central to the iPhone's new facial-recognition system used to unlock the device. One part has taken more time than anticipated to assemble, creating a bottleneck just as mass production is supposed to be ramping up. The glitches are turning the phone into a kind of case study for a growing problem in the highly-competitive electronics world. Apple and its rivals are rushing to get new technology into their products but their supply chains are having a hard time keeping up with the high-stakes race to the market.
Upheaval in the retail landscape is leaving deep scars in some communities as they struggle to adjust to a changing U.S. economy. Elmira, N.Y., has lost hundreds of retail jobs in the last five years, undermining the city's tax base and quality of life, the WSJ's Valerie Bauerlein writes, making the onetime manufacturing boomtown an example of the crushing impact that can hit towns when brick-and-mortar starts crumbling. The city is looking for logistics operations, and FedEx Corp. plans an $18 million sorting center there to handle online orders. Replacing the taxes of shuttered shops has been hard, however, part of the tough economic impact of e-commerce sales. Amazon.com Inc. collects tax in all 45 states that tax sales, but many third-party online sellers don't always collect, arguing the process is unwieldy. City officials still hope an iconic Elmira shopping mall will carry the city's revival, but they say that's most likely to happen by rebuilding the site as a fulfillment center.
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