The Friday Five: Macy's closes 125 stores
Macy's lays out a massive supply chain overhaul [Supply Chain Dive]
Macy’s will shed 125 underperforming stores and roughly 2,000 employees. Offices will move and consolidate in an effort to bring down operating costs and improve margins. In the first year of the supply chain transformation, Macy's expects to generate $500 million in savings — $900 million by 2022. Cost reduction across the entire organization should eventually reach $1.5 billion in annual gross savings.
China to slash tariffs by 50% on $75B of US imports [Supply Chain Dive]
China will cut tariffs in half on $75 billion worth of imports from the U.S., according to a translation of a statement from China's Ministry of Finance. The changes will take effect Feb. 14. The move follows the Trump administration's announcement during the signing of a phase one trade deal to reduce the tariff rate from 15% to 7.5% on Feb. 14 on about $120 billion worth of imports from China. China's decreased duty rate will apply to goods that faced tariffs starting Sept. 1, 2019. Tariffs of 10% will reduce to 5%, and 5% will reduce to 2.5%, the Ministry of Finance statement said.
Coronavirus Hits Shipping as China Port Traffic Slides [Wall Street Journal]
The toll from the coronavirus outbreak is starting to hit maritime operations from container terminals to shipyards. A report from Alphaliner projects the impact of factory shutdowns and other restrictions crimping China’s output will reduce global ocean container volumes, by about 0.7% this year as Beijing struggles to rein back the outbreak while keeping its economy on track. The dour outlook for a key segment of global trade comes as international container lines cancel a growing number of scheduled sailings through China and airlines ground flights to the region, squeezing cargo capacity for a broad range of shippers and logistics operators.
U.S. Pushing Effort to Develop 5G Alternative to Huawei [Wall Street Journal]
The U.S. is hatching a plan to wean American 5G cellular networks off Chinese supply chains. The White House is working with big U.S. technology companies to build software that would reduce dependency on Huawei Technologies Co. 's equipment by allowing 5G developers to run code atop machines from nearly any hardware manufacturer. The U.S. says Huawei has links to the Chinese military, a charge the company denies, and wants to map out a path where most domestic 5G architecture and infrastructure would be built by American firms or companies with a big U.S. presence.
Logistics: To insource or outsource? [Supply Chain Dive]
Outsourcing of logistics services has become mainstream, as evidenced by the $213.5 billion U.S. 3PL market, according to Armstrong & Associates estimates. In an October 2019 study from Gartner, 85% of respondents said they expected to boost their logistics outsourcing budget by 5% for 2020, on top of a similar increase in 2019.
Thanks for reading! Don’t forget to check out last week’s news and stay tuned for our next Friday Five roundup!
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