Supply-Demand Pendulum; Exiting a Port Watchdog; Counting Strike Costs By Paul Page

Today's newsletter was written by WSJ Logistics Report's Jennifer Smith.

History suggests that the supply-demand imbalances turbocharging consumer prices aren't likely to be permanent. Transport bottlenecks and robust demand are driving double-digit percentage increases in the costs of cars, appliances and other manufactured goods, but even modest relief of some supply-chain strains could have significant effects , the WSJ's Justin Lahart writes in a Heard on the Street column. On the supply side, partially built vehicles parked for lack of semiconductors should head for dealerships once auto makers secure enough chips to finish the job. The scramble by businesses to stockpile parts and holiday inventory could be painting a false picture of underlying demand, while lessening Covid-19 risks could shift more spending toward services, easing prices for goods like used cars. Climbing inflation can make it hard to remember that sectors from shipping to meat production routinely swing from shortages to gluts as businesses race to capitalize on rising prices.

Transportation

New Jersey's push to exit the New York Harbor Waterfront Commission is gaining steam. The U.S. Supreme Court declined to take up an appeal by the bistate watchdog , which wants to block New Jersey's withdrawal from the agency created nearly 70 years ago to root out corruption on the New York and New Jersey docks. The WSJ Logistics Report's Jennifer Smith and Paul Berger write that the decision also leaves the door open for future litigation, including potential action by the state of New York, which shares jurisdiction with New Jersey over the East Coast's busiest container port. The balance of economic activity at the port complex has shifted west in the decades since the commission was established, and New Jersey says crime is down and that state police should monitor the docks. A spokeswoman for New York Gov. Kathy Hochul says, "We are reviewing all options."

Supply Chain Strategies

Labor strife at Deere & Co. is casting a shadow over the high season for farm equipment sales. A five-week strike by unionized workers dented production of tractors, combines and other equipment, the WSJ's Bob Tita reports, and analysts expect Deere to both raise prices and increase production to pay for the cost of the new six-year contract. Labor accounts for some 15% of the company's overall cost of goods sold, and a pay raise and bonus in the agreement could shave nearly 1 percentage point off Deere's operating margin. Strong demand for farm and construction machinery should help backfill lost production and sales. Net farm income is projected to jump 20% this year to its highest point since 2013. Meanwhile, supply-chain disruptions and low inventories of new and used equipment have kept rival manufacturers from boosting their own production in a bid to eat into Deere's market share.

Number of the Day In Other News

President Biden said he would nominate Federal Reserve Chairman Jerome Powell for a second term. (WSJ)

Samsung plans to build a $17 billion dollar chip-making plant in Taylor, Texas. (WSJ)

U.S. home sales rose 0.8% in October from the previous month, the highest pace since January. (WSJ)

Tesla plans to launch its high-end Model S Plaid sedan in China next year. (WSJ)

Brooks Brothers owner Authentic Brands raised $3.5 billion and pushed back its initial public offering plans. (WSJ)

Target, Walmart and other retailers are closing their stores on Thanksgiving. (WSJ)

Air Canada increased cargo capacity through Vancouver International Airport as flooding in British Columbia disrupts supply chains. (Air Cargo World)

China is cornering the cobalt market through acquisitions in the Democratic Republic of Congo. (New York Times)

Abu Dhabi National Oil Company is considering taking its marine services, logistics and shipping arm public next year. (Reuters)

European Union member states and others blocked a resolution for the International Maritime Organization to set a zero-emissions target by 2040. (Lloyds List)

Startup Deliverr raised $250 million in backing for its e-commerce fulfillment technology, bringing its valuation to $2 billion. (TechCrunch)

Drone delivery startup Flytrex raised $40 million to accelerate its U.S. expansion. (Drone Life)

China Railway said China-Europe rail freight volumes rose 33% from the previous year. (The Loadstar)

Alabama-based flatbed operator Montgomery Transport added a nickel "driver shortage" surcharge over a 90-day period. (Commercial Carrier Journal).

Ocean Spray's chief executive said consumers should consider using fresh cranberries because a shortage of cans could crimp supplies ahead of Thanksgiving. (Bloomberg)

About Us

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

Follow the WSJ Logistics Report team: @PaulPage , @jensmithWSJ @LydsONeal and @pdberger . Follow the WSJ Logistics Report on Twitter at @WSJLogistics .

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