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Caterpillar Gains From AI Buildout; Schneider Sees Transport
Costs Rising; New Jersey Sues Amazon By Mark R. Long | WSJ Logistics Report Caterpillar is racing to meet booming demand for generators from data center developers, converting a plant in Kansas to make turbine engines and resuming production of 10-megawatt generators, which the company expects to start shipping in the fourth quarter.
Healthy construction spending is also spurring sales of Caterpillar's dump trucks, bulldozers and excavators, the company said as it posted a 24% increase in quarterly revenue. It also raised its full-year sales outlook following the stronger-than expected quarter. Lower-than-forecast tariff costs and a big tariff refund helped expand margins and increase profitability, CEO Joe Creed said.
The equipment maker said it will double down on its capacity-expansion plans, citing the healthy demand trends. It previously said it would spend $725 million at its Lafayette, Ind., plant to make more piston-driven engines for generators, marking its largest factory investment in about 15 years. Separately, it wants to more than double the production capacity for turbine engines by 2030.
Cummins raised its outlook for the year after reporting higher profit and sales, boosted by accelerating orders for standby power for data centers and improving North American truck markets. (WSJ)
Expeditors International of Washington said heavy demand from AI hyperscalers was showing no sign of slowing, boosting demand for air-freighter space, as the company posted a 32% increase in quarterly revenue.
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Number of the Day Trucking U.S. transportation costs are expected to keep rising as an exodus of truck drivers weighs on capacity, Jim Filter, Schneider National's new CEO, said in an interview with the WSJ Logistics Report's Liz Young.
The cost to move goods via truck increased over the past several months after nearly four years of slumping freight rates. Dry-van spot rates for the week ended July 31 were up about 39% year-over-year excluding fuel surcharges, according to a report from FTR Transportation Intelligence and Truckstop.com.
Filter, who took over as CEO of the Green Bay, Wis.-based company on July 1, said the reversal is largely due to the Trump administration's crackdowns on some immigrant drivers, which have pushed many carriers out of the market. He said he doesn't expect demand to pick up dramatically this year.
Labor New Jersey sued Amazon, alleging the e-commerce giant illegally used its dominance over its package-delivery network to suppress wages and working conditions for thousands of delivery drivers while preventing them from organizing.
The lawsuit, filed in federal court in New Jersey, alleges Amazon violated federal and state antitrust laws through its Delivery Service Partner, or DSP, program, the WSJ's Anvee Bhutani reports. The suit argues that the company exercises an unlawful "monopsony," or a dominant buyer's ability to dictate prices and terms over the small businesses that deliver Amazon packages and the drivers they employ.
An Amazon spokesperson said the complaint "is not grounded in fact" and that the suit's characterization of the DSP program and working conditions was incorrect. New Jersey argues Amazon used its buying power to hold down compensation for delivery contractors and drivers by making DSPs almost entirely dependent on the company while tightly controlling their operations.
In Other News The U.S. trade deficit contracted to $73.3 billion in June from $77.6 billion the month before, according to the Commerce Department. Imports fell 1.8% to $388 billion from May and exports slipped 0.9% to $314.7 billion. Imports of goods decreased $7.9 billion, though imports of telecommunications equipment increased $1.1 billion.
Canada's trade surplus rose to the equivalent of about $2.74 billion, a four-year high, as exports increased for a fifth straight month. (WSJ)
A cargo vessel was struck by an unknown projectile off the coast of Oman as talks to reopen the Strait of Hormuz stalled over a fee dispute. (WSJ)
BP put its U.S. biogas business Archaea up for sale. (WSJ)
Minnesota health officials are investigating a salmonella outbreak linked to jalapeños served at Mexican-style restaurants, focusing on Chipotle. (WSJ)
Cerberus Capital Management is seeking to raise at least $4 billion for its latest supply-chain fund. (Bloomberg)
A group of 25 states sued the Trump administration in the U.S. Court of International Trade over its Section 301 forced-labor tariffs. (SupplyChainDive)
Amtrak is seeking public feedback on a proposed restructuring that would put passenger services, infrastructure and fleet management into three divisions overseen by the parent company. (Railway Supply)
The Trump administration is expected to extend a waiver of the Jones Act in the coming days as it tries to hold down fuel prices. (Reuters)
About Us Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.
This article is a text version of a Wall Street Journal newsletter published earlier today.
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