Good day,
Amazon.com, Inc.’s hardly excellent New York adventure is over. Should we mourn the thousands of jobs that will go by the boards? Or should we applaud New York City for not succumbing to what the Daily Beast called “extortion without the dick pics?” The best way to understand the outcome is not through the post-mortems, but through the stories published in November when Amazon was making its decision. At the time, The Atlantic’s Derek Thompson went out with an insightful piece entitled Amazon’s “HQ2 Spectacle Should Be Illegal.” Every year, American cities and states cough up $90 billion in tax breaks and cash grants to urge companies to move among states, Thompson wrote, citing data from the Brookings Institute. That’s more than the federal government spends on housing, education or infrastructure. Since cities and states can’t print money or run deficits, these deals take scarce resources from schools, roads, police and prisons, Thompson wrote. What’s more, these incentives have no discernible impact on a firm’s ability to expand, at least as measured by job creation. In addition, companies can’t be counted on to keep their promises (think Foxconn in Wisconsin). Finally, even if jobs are created and companies hold up their end of the bargains, it seems ludicrous for Americans to pay tens of billions of dollars for corporations to relocate within the U.S., Thompson wrote. Nothing illuminated this “absurdity,” he wrote, more than the so-called Border War in which Kansas and Missouri spend “zillions of dollars” dragging Kansas City-area companies back and forth across state lines but all within the same metro area.
Did You Know?
238 cities and municipalities submitted bids for Amazon “HQ2.”
Quotable:
“I’m optimistic we will get that business back from other customers.”
XPO Logistics, Inc. Chairman and CEO Brad Jacobs on the impact of the company’s largest customer (who most think is Amazon.com, Inc.) pulling $600 million in business from XPO.
In other news:
Walmart launches intermodal container operation
Walmart has launched a fleet of intermodal containers and has begun using its own drivers to move the boxes from rail hubs to Walmart stores. (Supply Chain Dive)
VF Corp. closing South Carolina logistics center, laying off 150
Closure of Greenville location tied to the spin-off of the company’s Jeanswear business. (Triad Business Journal)
Port infrastructure funding badly lags needs, AAPA said
American Association of Port Authorities Chairman William D. Friedman told a Senate committee that, despite eight evolutions of the containership over six decades, the country still relies on the same infrastructure to handle increased growth. (The Waterways Journal)
CloudTrade steps into freight invoicing market
Electronic invoicing and data capture company CloudTrade said it is launching “CloudTrade Logistics,” which integrates invoice processing and digital data exchange for third-party logistics companies, business process outsourcing firms and freight payment providers. (PYMTS.)
Georgia lawmakers getting behind new interstate highway
Support is building in the state house for development of I-14, which would connect Columbus in the west and Augusta in the east. It would be Georgia’s first interstate in 60 years. (Atlanta Business Chronicle)
Final Thoughts:
The common reaction to last week’s New England Motor Freight, Inc. bankruptcy and imminent shutdown is how could a less-than-truckload (LTL) carrier go belly-up in a strong macro environment. After all, within the past four to five days the CEOs of C.H. Robinson Worldwide, Inc. and XPO sang the praises of economic demand, with XPO’s Jacobs saying the industrial economy – LTL’s bread and butter – was doing fine. But a bullish macro outlook means little if you are unionized, operating in a high-cost region – the Northeast – against non-union competition, saddled with an aging fleet, and owned by an octogenarian who may not have wanted to do this anymore. A company’s success or failure is often unrelated to the broader landscape surrounding it.
Hammer down everyone!