By Jennifer Smith 

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The U.S. government is pointing to national security concerns in bailing out trucker YRC Worldwide Inc. The Treasury Department is lending the troubled trucker $700 million in coronavirus stimulus funding, the WSJ's Kate Davidson and Jennifer Smith report, and taking a 29.6% stake in the business under a Cares Act provision for companies deemed essential to national security. YRC is the fifth-largest U.S. trucking company, moving goods for big shippers like Walmart Inc. and Home Depot Inc. and handling 68% of less-than-truckload services for the Defense Department. One of the few big unionized carriers left, YRC has struggled under heavy debt and was trying to turn its business around when the coronavirus pandemic crashed freight volumes. Stephens Inc. analyst Jack Atkins says the federal loan "removes the risk of a bankruptcy" for YRC, which plans to use the funding to make up missed pension and healthcare payments and to refresh its aging fleet.

ECONOMY & TRADE

Don't expect the U.S.-Mexico-Canada Agreement to usher in a new era of North American trade peace. Ongoing tensions over tariffs and other issues that prolonged negotiations are complicating the rollout of the updated version of the North American Free Trade Agreement, the WSJ's Josh Zumbrun reports, and ramping up uncertainty for cross-border supply chains. Lingering sore points include rules still being finalized that require auto makers to keep more of their factories in the U.S. and Canada, and concern that the U.S. could impose new levies on metals as aluminum imports from Canada surge. The USMCA keeps much of the groundwork laid by NAFTA but adds provisions for digital trade and safeguards meant to bolster standards in Mexican factories. U.S. labor groups worry Mexico won't follow through on those requirements, while lawmakers from farm states question how far Canada will go to open up its dairy market.

SUPPLY CHAIN STRATEGIES

Coca-Cola Co. is getting out of the chilled delivery business. The drinks giant is discontinuing its Odwalla juice brand and the 230-truck refrigerated fleet that delivers Coke's fresh beverages to stores, the WSJ's Jennifer Maloney writes, one of the biggest moves yet by food companies resetting their supply chains by narrowing product lineups. Supply-chain disruptions and volatile swings in consumer demand during quarantines are prompting food and consumer-goods makers to rethink their offerings and prune underperforming products. Coke said declining smoothie sales contributed to challenges for Odwalla. The decision to pull the plug will cut about 300 jobs and dismantle a network that also carried Coke's fresh orange juice and single-serve Fairlife milk to retailers. Those trucks will be sold and Coke will seek other routes to market for the remaining products.

QUOTABLE

IN OTHER NEWS

Global manufacturing activity showed fresh signs of recovery in June despite weak demand. (WSJ)

Oil prices neared their highest level since early March on supply cuts and recovering fuel demand. (WSJ)

The U.S. House passed a $1.5 trillion infrastructure bill that is heavily opposed by Senate Republicans. (WSJ)

U.S. vehicle sales fell by about one-third in the second quarter, less sharply than anticipated. (WSJ)

The U.S. warned companies with suppliers and customers in China of risks linked to human-rights violations there. (WSJ)

Autonomous trucking startup TuSimple is working with logistics operators including U.S. Xpress Enterprises to build a nationwide freight network. (WSJ)

The U.S. filed suit to seize four tankers-worth of gasoline Iran is sailing to Venezuela. (WSJ)

Investigators say regulators' sluggish response to the first Boeing Co. 737 MAX crash contributed to a second deadly crash. (WSJ)

Mitsubishi Aircraft reported an annual loss of $4.9 billion as it seeks to build Japan's first passenger jet. (WSJ)

Apple Inc. is closing dozens of stores around the U.S. amid mounting coronavirus infections. (WSJ)

General Mills's quarterly sales jumped 16% on strong demand for consumer staples. (WSJ)

Macy Inc.'s reported a 45% decline in sales for the most recent quarter. (WSJ)

Nordstrom is laying off thousands of workers as it copes with pandemic-related losses. (Seattle Times)

British retailers including Harrods and John Lewis are laying off thousands of workers as they prepare to permanently close stores. (The Guardian)

El Al Israel Airlines canceled all its flights world-wide and ordered aircraft back to Israel. (Jerusalem Post)

Spain's Port of Valencia is expanding container handling capacity with plans for an "environmentally advanced" new terminal. (Port Technology)

Lloyd's Register withdrew classification for sanctioned vessels linked to Venezuelan cargoes, a key step demonstrating U.S. pressure on marine service providers. (Lloyd's List)

British charity the Seafarers Hospital Society says suicide has become the number one source of deaths on ships. (Splash 247)

Danish shipping company J. Lauritzen split the company into two separate entities and CEO Mads Peter Zacho resigned. (ShippingWatch)

Warehouse demand in the U.K. hit a record high in the second quarter. (Bloomberg)

Innovo Property Group paid $34.1 million for a single-story warehouse in Long Island City, Queens. (Commercial Observer)

Electric-truck maker Workhorse Group received $70 million from an unnamed backer to ramp up vehicle production. (DC Velocity)

Chicago-area intermodal drayage provider Mark-It Express Logistics acquired Sava Transportation. (Journal of Commerce)

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 Jennifer Smith at jennifer.smith@wsj.com

 

(END) Dow Jones Newswires

July 02, 2020 11:04 ET (15:04 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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