China's auto factories are building so many cars for export that the global shipping industry can't keep up, the WSJ Logistics Report's Paul Berger writes.
Specialized car carriers are booked out years ahead to export cars from Chinese factories. Rates to charter the roll-on/roll-off, or ro-ro, ships are up 65% this year on the surging demand. Some automakers are so desperate to get vehicles to Europe, Australia and Latin America they are squeezing them inside shipping containers.
Chinese carmakers are flooding foreign markets because of fierce competition between more than 100 domestic auto brands, overproduction and a sluggish economy. China exported just under 600,000 cars and vans in 2019, according to Mobility Global. This year, it forecasts China could ship up to 10 million vehicles.
Now, the shipping industry is navigating skyrocketing rates and scarce capacity. Carriers have gone on a record buying spree in recent years to meet demand, with the global car-carrier fleet growing by about an estimated 40%, but still can't meet China's needs.
Food Supplies
Tyson Foods plans to close a large cattle-processing plant and sell another, the meatpacking giant's latest pullback from the beleaguered beef business, the Journal's Patrick Thomas writes.
The Springdale, Ark.-based company said it is closing its Joslin, Ill., plant, which employs more than 2,000 people and can kill about 3,000 cattle a day, according to an internal company memo. It separately aims to sell its Pasco, Wash., facility that can slaughter about 2,000 cattle a day. Tyson also said it plans to shut a large beef packaging facility in Utah.
Tyson earlier this year closed a Lexington, Neb., beef plant, one of the industry's largest, and halved production at a Texas plant. The company now plans to ramp operations back up at the Texas facility.
Global Trade
Many companies appear to have received tariff refunds with remarkable speed, contrary to warnings that the process could prove slow and messy, the WSJ's Theo Francis and Celia Bernhardt write. So far, over 40 S&P 500 companies have reported some $9.6 billion in refunds in the past quarter or so, including at least $2.1 billion already received.
U.S. Customs and Border Protection had received just over 252,000 refund applications as of July 31 for tariffs declared unlawful by the Supreme Court. The customs agency accepted $128.7 billion in refunds for processing, an agency official told a federal court last week.
-- The U.S. Court of International Trade upheld President Trump's scrapping of the de minimis tariff exemption for packages worth $800 or less, which was challenged by an auto-parts distributor. (CNBC)
-- The Trump administration will impose tariffs of up to 100% on imports of drones and components. (WSJ)
-- A new White House report says more than 40 countries enable Chinese exporters to evade U.S. tariffs through illegal transshipment. (WSJ)
Average spot rate to ship a 40-foot container from Shanghai to New York for the week ended Aug. 13, up 10% from the week before, according to Drewry's World Container Index.
In Other News
-- There is a 90% chance of a "very strong" El Niño in the Northern Hemisphere's 2026-27 fall and winter, with a 69% chance it will be the strongest in records going back to 1950, the National Oceanic and Atmospheric Administration said.
-- President Trump directed the Navy to tear out electromagnetic catapult systems for launching jet fighters from aircraft carriers and bring back steam catapults, a move that will likely cost billions in extra dollars. (WSJ)
-- JD.com posted stronger-than-expected quarterly results as the Chinese e-commerce company narrowed food-delivery losses. (WSJ)
-- New Jersey dealer Prestige Imports sued Polestar, seeking at least $25 million in damages after the automaker's exit from the U.S. market. (WSJ)
-- The Ports of Los Angeles and Long Beach will together provide $40 million to fund a regional electric-truck charging network in coordination with local pollution regulators. (Journal of Commerce)
-- DHL Express finished a $204 million expansion of its gateway at Shenzhen Bao'an International Airport, tripling the tonnage of shipments it can process a day. (SupplyChain24/7)
-- Efforts to stabilize a shadow tanker stranded in the Arabian Sea as an oil spill spreads to Oman's coast have been complicated by sanctions on the vessel's Russian insurer. (Lloyd's List)
-- U.K. maritime response company Ambrey is coordinating the effort to salvage the wrecked and leaking tanker off the Omani coast. (Reuters)
-- New European Union rules that require retailers to use sustainable packaging took effect this week. (DC Velocity)
-- The U.S. Maritime Administration awarded $35.2 million in grants to 45 small shipyards in 24 states and the U.S. Virgin Islands. (WorkBoat)
-- Twenty-one states and the District of Columbia sued the Transportation Department over its demand for personal information in a database of commercial driver's licenses. (New Jersey Monitor)
In this week's Dow Jones Risk Journal podcast: Federal officials spent years warning that local water utilities were vulnerable to cyberattacks. This summer, those vulnerabilities became impossible to ignore. Also, the FTC is pulling back on an antidiscrimination enforcement mechanism. New episodes every Friday on Apple Podcasts, Spotify and Amazon.