Sponsored by

Houthi Shipping Attacks Undeterred; Red Sea '9-1-1'; Automakers Get Big By Paul Page

The Logistics Report is taking a break for the holidays between Dec. 25 and Jan. 1. Look for us back in your inbox Jan. 2, and in the meantime check our website for any breaking news.

The shipping world is heading into a new year with the standoff in the Red Sea that has upended global trade no closer to ending than it was at the start of 2024. Despite hundreds of American and allied strikes and the deployment of a U.S. Navy flotilla, Yemen's Iran-backed Houthi rebels have kept up attacks on commercial ships passing through the vital waterway.

The WSJ's Carrie Keller-Lynn, Benoit Faucon and Saleh al-Batati report that Red Sea trade routes remain paralyzed, with the U.S.-designated terrorist organization causing billions of dollars in losses and forcing ocean carriers to reroute cargo or run a gantlet of missiles and drones. The attacks are continuing even though other Iranian-backed groups have all stopped fighting.

The effective blockade has provided a financial windfall for container lines, as longer Europe-Asia routes around Africa have swallowed up capacity and driven up freight rates.

Industry consultant John D. McCown estimates container lines earned a combined $26.8 billion in profits in the third quarter, up nearly 900% from last year's third quarter. In a recent report, Freightos said "Red Sea diversions are still the biggest contributor to rates that remain at least double their level a year ago."

Carriers have adjusted their operations for the long-haul, and the increasingly sophisticated and well-armed Houthis show no signs of losing fighting power. Says one expert, they "don't have a lot to lose. They cannot be deterred."

A tanker with ties to Iran became the first very large crude carrier sold for recycling in more than three years. (TradeWinds) CONTENT FROM: PENSKE Gain Intel. Gain Ground with Penske.

The road to the future relies on data. And we speak data. At Penske, technology is embedded in everything we do. Our apps and tools help our customers optimize their fleet by delivering real-time actionable insights straight to them.

Learn More

Transportation

Houthi rebels have turned a crucial shipping route in the Red Sea into a zone of terror. In a video report , The Wall Street Journal goes inside the operations of a U.K. unit handling distress calls from besieged vessels. Quotable Supply Chain Strategies

Honda and Nissan will have more manufacturing scale when they combine operations, but what the car makers are really banking on is better technology. The companies plan to merge in 2026, the WSJ's Peter Landers reports, creating an automaker that, combined with Nissan partner Mitsubishi Motors , would be the third-largest in the world, after Toyota and Volkswagen. The tie-up is one sign of the enormous impact that new technology, including electric power and autonomous driving, is having on the automotive market.

The tech is reshaping the supply chains behind car manufacturing and the distribution of finished vehicles around the world. Still, the merger will be a challenge to complete successfully. Honda and Nissan share similar model lineups and a focus on the U.S. market, so they face a choice of either eliminating one brand's models or leaving duplicated product and marketing teams in place.

Toyota will build its first independently operated plant in China and produce luxury Lexus electric vehicles there. (Nikkei Asia) Number of the Day In Other News

Orders at U.S. factories fell 1.1% in November , the third decline in the past four months. (MarketWatch)

A measure of U.S. consumer confidence retreated unexpectedly in December. (WSJ)

Canada's producer prices rose another 0.6% last month. (WSJ)

The U.K. economy stagnated in the September quarter. (WSJ)

President-elect Donald Trump is discussing taking over the Panama Canal amid provocative aspirations for U.S. territorial expansion. (WSJ)

U.S. regulators are suing Walmart and payment platform Branch Messenger over practices concerning pay for delivery drivers in the retailer's Spark program. (WSJ)

Specialty retail chain The Container Store filed for chapter 11 bankruptcy protection. (WSJ)

Xerox is buying printer manufacturer Lexmark International from its Chinese owners in a $1.5 billion deal. (WSJ)

The founding family of Nordstrom clinched a $4 billion deal to take the struggling department-store chain private. (WSJ)

Bangladeshi textile and garment manufacturing giant Beximco is laying off 40,000 workers across 16 factories. (Sourcing Journal)

Trump nominated former Pan Am Railways President David Fink to lead the Federal Railroad Administration. (Progressive Railroading)

State-owned Spanish shipbuilder Navantia is buying Harland & Wolff and its shipyards in Belfast , Scotland and England. $(BBC.AU)$

Australian regulators say the lack of competition in port stevedoring is inflating prices. (Maritime Executive)

French freight-forwarder Geodis is looking to increase its operating margin from 3.8% to 6% of global revenue over the next three years. (The Loadstar)

Danish forwarder Scan Global Logistics is buying Canada-based ITN Logistics Group. (Air Cargo News)

About Us

Paul Page is editor of WSJ Logistics Report. Reach him at [paul.page@wsj.com].

Follow the WSJ Logistics Report team: @PaulPage , @bylizyoung and @pdberger . Follow the WSJ Logistics Report on X at @WSJLogistics .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

December 24, 2024 07:08 ET (12:08 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.