Mattel Inc.
is trying to reduce the red ink in its supply chain. The toy maker is literally cutting back the shades and types of colors that it uses in production, the WSJ’s Paul Ziobro, as part of an effort to simply its manufacturing and rein back supply chain costs. The goal is to tame a sprawling supply chain that operates 13 factories, employs up to 35,000 people during peak periods and delivers toys to 375,000 retail locations. Chief Supply Chain Officer Roberto Isaias says “complexity is really a killer” for Mattel, and the company is rethinking its broader factory footprint. The process is starting with a hard look at the seemingly simple components in its products. Toy designers until recently could choose from about 150 types of red, for instance, and each variation added storage costs and factory downtime for cleaning equipment to swap out the shades.
TRANSPORTATION
Barge operators on U.S. waterways are in a hurry even if their river vessels don’t appear to be moving faster than normal. Tug and barge companies are scrambling to move loads during the traditional slow season as the shipping industry tries to make up for time lost due to record rainfall dating back to the spring. The WSJ’s Joe Barrett writes that severe flooding shut down barge traffic in June at St. Louis, where the Mississippi and Missouri rivers meet, stranding thousands of barges. Tugboat companies have been rushing to break logjams and keep commerce moving. One week last month saw the highest grain tonnage of the year moving through a key Mississippi River lock. It’s one sign of how the flooding has fractured usual shipping patterns and pushed suppliers and buyers to adjust in a commodities business that’s been built on steady and predictable flows.
COMMODITIES
Laws aimed at lifting farm-worker wages in key cocoa-producing nations are whipsawing markets for the confectionary commodity. The new wage requirements helped push prices to an 18-month high in November, but the WSJ’s Kirk Maltais reports prices have skidded lower since then amid worries that the climb will prompt a flood of production world-wide. The new rules require farmers in the Ivory Coast and Ghana to sell cocoa at a minimum price of $2,600 a ton, a strong price that
warns may could quickly lead to an oversupply of the bean. It could also trigger bigger changes in supply chains if major buyers seek supplies from different countries. The actions are roiling a cocoa market that in recent years has been marked by low prices that have exacerbated rampant poverty among African cocoa growers and prompted many chocolate makers to re-examine their supply chains.
QUOTABLE
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“Supply chain had become one of our handicaps.”
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Number of the Day
49.2%
Increase since the first week of October in Drewry Shipping Consultants Ltd.’s weekly index of container freight rates on major trade lanes world-wide.
IN OTHER NEWS
Crude oil prices surged to multi-month highs after a U.S. airstrike killed a high-ranking Iranian military leader. (WSJ)
Manufacturing measures show the U.S. and Asian economies stabilizing to begin the year as an industrial downturn deepens in Europe. (WSJ)
The number of Americans applying for first-time unemployment benefits declined for the third straight week. (WSJ)
Natural-gas prices have fallen to 41% below a peak set nearly a year ago. (WSJ)
A $7,500 U.S. tax credit for purchases of electric cars expired with the start of the year. (WSJ)
A study shows quality of care didn’t improve at hospitals that were acquired in a recent consolidation wave. (WSJ)
An advisory body on risk management practices plans to issue guidance next year for internal corporate controls for blockchain technology. (WSJ)
Houston-based engineering and construction
is in talks with lenders to file for bankruptcy within weeks. (WSJ)
North American oil-and-gas companies have more than $200 billion of debt maturing over the next four years. (WSJ)
Some 57 seafarers were kidnapped in the Gulf of Guinea in December as pirate attacks grew increasingly bold. (Lloyd’s List)
Tanker operator
closed on a $525 million, five-year credit facility. (Seatrade Maritime)
Taiwan’s Dimerco Express Group took a 25% stake in the new German freight forwarding subsidiary of Sweden’s Elanders Group. (Lloyd’s Loading List)
J.B. Hunt Transport Services Inc.
acquired U.S. Northeast regional home-delivery specialist RDI Last Mile Co. (Furniture Today)
Texas-based flatbed trucker Fleetwood Transportation Services Inc. shut down on New Year’s Eve, ending work for about 240 drivers. (CD Life)
ABOUT US
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 [email protected]
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