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The Week in Business: Jobs Surge Back

Good morning and happy Easter. Here are the top stories in business and tech to know for the week ahead. — Charlotte Cowles

Credit…Giacomo Bagnara

Employers added a whopping 916,000 jobs in March, more than doubling February’s employment growth. Many hires were in hospitality and construction, spurred on by the surging pace of vaccinations and a new round of federal aid. (The spring weather didn’t hurt, either.) In other good news, Wall Street hit a record high last week, with the S&P 500 index closing above 4,000 for the first time.

President Biden pitched his proposal for a giant infrastructure package, which he called “the largest American jobs investment since World War II.” It also has a large price tag, costing about $2 trillion over eight years. The plan aims to repair thousands of old bridges, roads and plumbing systems, improving commute times and drinking water. It also includes $100 billion to deliver broadband internet to rural areas that struggle with spotty Wi-Fi. And it will invest heavily in green initiatives like electric cars and more efficient energy grids. But the proposal faces a tricky path through Congress, as Republicans oppose the corporate tax increases that Mr. Biden says would pay for it.

will temporarily stop collecting payments on roughly six million loans that were made through the Federal Family Education Loan program and are now privately held. There’s a catch: Only borrowers who have defaulted will get a reprieve. The move will also temporarily prevent those in default from having their wages garnished or tax refunds seized by collectors, and will return any seized refunds or wages that had been taken since March 2020.

Credit…Giacomo Bagnara

The airline industry showed some promising signs of life last week. After a year of near-dormancy, domestic vacation bookings are bouncing back. United Airlines is hiring pilots again, starting with those who had conditional job offers before the pandemic or whose start dates were pushed off once travel restrictions set in. Delta Air Lines, the last major holdout in blocking middle seats to ensure space between passengers, will resume middle-seat bookings in May. And finally, the budget carrier Frontier Airlines went public, a sign that it’s anticipating a rebound.

After six days of digging and tugging, plus a boost from a full moon, the huge container ship that was lodged in the Suez Canal has been freed, and the waterway is open for business again. But the ripple effect of its blockage will be felt for weeks. The stuck boat prevented as much as $10 billion of cargo a day from moving through the canal, and cost the Egyptian government up to $90 million in lost toll revenue. Who will pay for the damage? A fleet of insurers, government authorities and lawyers are all sorting out who’s financially responsible (probably the stuck ship’s Japanese owner) and how much they’re on the hook for.

As the global economy shudders back into gear, demand for fuel is rising. And there was some question of whether oil producers would increase their supply to meet it. If they chose not to, gas could be up to $4 a gallon by this summer — not exactly welcome news for anyone trying to drive to work. But OPEC and its allies put those fears to rest last week when they agreed to gradually increase production over the next three months, which should keep prices steady.

speaking out against the state’s new law that restricts voting access. New York prosecutors have subpoenaed the personal bank records of the Trump Organization’s chief financial officer, Allen H. Weisselberg, as part of their investigation into the business practices of former President Donald J. Trump and his family company. And a group of doctors has sued the insurance giant UnitedHealthcare and accused it of stifling competition and hurting their business.

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Jobless Claims Tick Up, Showing a Long Road to Recovery: Live Updates

filed for state unemployment benefits last week, the Labor Department said Thursday. That was up modestly from the week before, but still among the lowest weekly totals since the pandemic began.

In addition, 237,000 people filed for Pandemic Unemployment Assistance, a federal program that covers people who don’t qualify for state benefits programs. That number, too, has been falling.

Jobless claims remain high by historical standards, and are far above the norm before the pandemic, when around 200,000 people a week were filing for benefits. Applications have improved only gradually — even after the recent declines, the weekly figure is modestly below where it was last fall.

But economists are optimistic that further improvement is ahead as the vaccine rollout accelerates and more states lift restrictions on business activity. Fewer companies are laying off workers, and hiring has picked up, meaning that people who lose their jobs are more likely to find new ones quickly.

“We could actually finally see the jobless claims numbers come down because there’s enough job creation to offset the layoffs,” said Julia Pollak, a labor economist at the job site ZipRecruiter.

But Ms. Pollak cautioned that benefits applications would not return to normal overnight. Even as many companies resume normal operations, others are discovering that the pandemic has permanently disrupted their business model.

“There are still a lot of business closures and a lot of layoffs that have yet to happen,” she said. “The repercussions of this pandemic are still rippling through this economy.”

Shoppers in Berlin’s Alexanderplatz. Germany and other countries have cut their value-added taxes to encourage consumer spending.
Credit…Lena Mucha for The New York Times

The European Central Bank’s chief economist argued on Thursday that fears of a big rise in inflation are overblown, a sign that the people who control interest rates in the eurozone are likely to keep them very low for some time to come.

The comments — by Philip Lane, an influential member of the central bank’s Governing Council whose job includes briefing other members on the economic outlook — are an attempt to calm bond investors who are nervous that the end of the pandemic will lead to high inflation.

Fueling their fears, inflation in the eurozone rose to an annual rate of 1.3 percent in March from 0.9 percent in February, according to official data released on Wednesday, the fastest increase in prices in more than a year.

Market-based interest rates have been rising because investors worry that President Biden’s $2 trillion stimulus program will provoke a broad increase in prices for years to come. The interest rates that prevail on bond markets ripple through the financial system and can make mortgages and other types of borrowing more expensive, creating a drag on economic growth.

Despite big monthly swings in inflation during the last year, the average had been remarkably stable at an annual rate of about 1 percent, Mr. Lane wrote in a blog post on the central bank’s website on Thursday. That is well below the European Central Bank’s target of 2 percent.

“The volatility in inflation over 2020 and 2021 can be attributed to a host of temporary factors that should not affect medium-term inflation dynamics,” Mr. Lane wrote.

That is another way of saying that the European Central Bank is not going to panic about short-lived fluctuations in inflation and put the brakes on the eurozone economy anytime soon.

On the contrary, Mr. Lane’s analysis suggests that the European Central Bank will continue trying to push inflation toward the 2 percent target. In March, the central bank said it would increase its purchases of government and corporate bonds to try to keep a lid on market-based interest rates.

Mr. Lane said it was no surprise to see “considerable volatility in inflation during the pandemic period.” He attributed the ups and downs to quirky factors that are not likely to recur.

Germany and some other countries cut their value-added taxes to encourage consumer spending, then raised them again later. The price of fuel fluctuated wildly. People spent almost nothing on travel, but increased spending on home exercise equipment or products that they needed to work from home. That affected the way inflation is calculated and made the annual rate look higher, Mr. Lane said.

“The medium-term outlook for inflation remains subdued,” he wrote, “and closing the gap to our inflation aim will set the agenda for the Governing Council in the coming years.”

Prince Abdulaziz bin Salman, the Saudi oil minister, has argued that increasing oil output too fast would be risky.
Credit…via Reuters

OPEC and its allies, including Russia, are expected to meet by videoconference Thursday to discuss whether to ease production curbs on oil as countries around the world try to expand from pandemic lockdowns.

Analysts say recent events will support the views of Prince Abdulaziz bin Salman, the Saudi oil minister, who has argued for caution in increasing supply, noting the risks of swamping the market. But other outcomes are possible at the meeting of the group known as OPEC Plus, including modest increases and even cuts in oil production,

France’s reimposition of a national lockdown, announced Wednesday, underlines persistent doubts about the pace of recovery from the pandemic, as have rising case numbers in the United States.

After modest increases when the Suez Canal was recently blocked by a cargo ship, oil prices were rising again on Thursday, with Brent crude, the global benchmark, about 1.6 percent higher, to $63.75 a barrel.

“All signs seemingly point to the group maintaining current production levels,” Helima Croft, head of commodity strategy at RBC Capital Markets, an investment bank, wrote in a note to clients on Wednesday.

Yet pressure may also come to increase supply. Members of the OPEC Plus group are withholding an estimated eight million barrels of a day, or about 9 percent of current global consumption. As the global economy recovers, it will become increasingly difficult for the Saudis to persuade others to restrain supplies.

A ChargePoint charging station in Berkeley, Calif. Shares in ChargePoint rose 19 percent on Wednesday. President Biden’s infrastructure plan supports the use of electric vehicles.
Credit…John G Mabanglo/EPA, via Shutterstock

U.S. stock futures rose on Thursday and tech stocks were set to extend their rally as traders focused on optimism about the economic recovery. Shares in Europe and Asia were also higher before the Labor Department’s latest weekly report on initial applications for state unemployment benefits.

Bond yields pulled back from their recent 14-month high. The yield on the 10-year U.S. Treasury note fell 3 basis points, or 0.03 percentage point, to 1.71 percent.

Last week, jobless claims were at the lowest for the pandemic, but economists have warned against assuming this is the new trend because of measurement issues. New data released on Thursday showed a slight rise in claims for unemployment benefits, On Friday, the Labor Department will publish its monthly jobs report for March.

The occupancy rate in nursing homes in the fourth quarter of 2020 was down 11 percentage points from the first quarter, but there are hurdles to staying out of facilities.
Credit…Amr Alfiky/The New York Times

The pandemic has intensified a spotlight on long-running questions about how communities can do a better job supporting seniors who need care but want to live outside a nursing home.

The coronavirus had taken the lives of 181,000 people in U.S. nursing homes, assisted living and other long-term care facilities through last weekend, according to the Kaiser Family Foundation — 33 percent of the national toll.

The occupancy rate in nursing homes in the fourth quarter of 2020 was 75 percent, down 11 percentage points from the first quarter, according to the National Investment Center for Seniors Housing & Care, a research group. The shift may not be permanent, but this much is clear: As the aging of the nation accelerates, most communities need to do much more to become age-friendly, said Jennifer Molinsky, senior research associate at the Joint Center for Housing Studies at Harvard.

“It’s about all the services that people can access, whether that’s the accessibility and affordability of housing, or transportation and supports that can be delivered in the home,” she said.

But there are hurdles for those who wish to stay out of a facility, Mark Miller reports for The New York Times:

Marigold Lewi and Kimberley Vasquez outside their high school Baltimore City College this month in Baltimore, MD.
Credit…Erin Schaff/The New York Times

A year after the pandemic turned the nation’s digital divide into an education emergency, President Biden is making affordable broadband a top priority, comparing it to the effort to spread electricity across the country. His $2 trillion infrastructure plan, announced on Wednesday, includes $100 billion to extend fast internet access to every home.

The money is meant to improve the economy by enabling all Americans to work, get medical care and take classes from wherever they live. Although the government has spent billions on the digital divide in the past, the efforts have failed to close it partly because people in different areas have different problems. Affordability is the main culprit in urban and suburban areas. In many rural areas, internet service isn’t available at all because of the high costs of installation.

“We’ll make sure every single American has access to high-quality, affordable, high speed internet,” Mr. Biden said in a speech on Wednesday. “And when I say affordable, I mean it. Americans pay too much for internet. We will drive down the price for families who have service now.”

Longtime advocates of universal broadband say the plan, which requires congressional approval, may finally come close to fixing the digital divide, a stubborn problem first identified and named by regulators during the Clinton administration. The plight of unconnected students during the pandemic added urgency.

“This is a vision document that says every American needs access and should have access to affordable broadband,” said Blair Levin, who directed the 2010 National Broadband Plan at the Federal Communications Commission. “And I haven’t heard that before from a White House to date.”

Some advocates for expanded broadband access cautioned that Mr. Biden’s plan might not entirely solve the divide between the digital haves and have-nots.

The plan promises to give priority to municipal and nonprofit broadband providers but would still rely on private companies to install cables and erect cell towers to far reaches of the country. One concern is that the companies won’t consider the effort worth their time, even with all the money earmarked for those projects. During the electrification boom of the 1920s, private providers were reluctant to install poles and string lines hundreds of miles into sparsely populated areas.

Taxpayers who received unemployment benefits last year — but who filed their federal tax returns before a new tax break became available — could receive an automatic refund as early as May, the Internal Revenue Service said on Wednesday.

The latest pandemic relief legislation — signed into law on March 11, in the thick of tax season — made the first $10,200 of unemployment benefits tax-free in 2020 for people with modified adjusted incomes of less than $150,000. (Married taxpayers filing jointly can exclude up to $20,400.)

But some Americans had already filed their tax returns by March and have been waiting for official agency guidance. Millions of U.S. workers filed for unemployment last year, but the I.R.S. said it was still determining how many workers affected by the tax change had already filed their tax returns.

On Wednesday, the I.R.S. confirmed that it would automatically recalculate the correct amount of benefits subject to taxation — and any overpayment will be refunded or applied to any other outstanding taxes owed. The first refunds are expected to be issued in May and will continue into the summer.

The I.R.S. said it would begin processing the simpler returns first, or those eligible for up to $10,200 in excluded benefits, and then would turn to returns for joint filers and others with more complex returns.

There is no need for those affected to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return, the agency said. Those taxpayers may want to review their state tax returns as well, the I.R.S. said.

People who still haven’t filed and expect to do so electronically can simply answer the questions asked by their online tax preparer, which will factor in the new tax break when they file. The agency provided an updated worksheet and additional guidance in March for taxpayers that prefer paper.

Microsoft’s HoloLens headsets, demonstrated above in 2017, will equip soldiers with night vision, thermal vision and audio communication.
Credit…Elaine Thompson/Associated Press

Microsoft said Wednesday that it would begin producing more than 120,000 augmented reality headsets for Army soldiers under a contract that could be worth up to $21.9 billion.

The HoloLens headsets use a technology called the Integrated Visual Augmentation System, which will equip soldiers wearing them with night vision, thermal vision and audio communication. The devices also have sensors that help soldiers target opponents in battle.

The deal is likely to create waves inside Microsoft, where some employees have objected to working with the Pentagon. Employees at other big tech companies, like Google, have also rejected what they say is the weaponization of their technology.

But Microsoft has long courted Defense Department work, including a $10 billion contract to build a cloud-computing system. Amazon had been seen as a front-runner to win the contract, but the Defense Department chose Microsoft.

Amazon claimed that President Donald J. Trump had interfered in the process because of his feud with Jeff Bezos, Amazon’s chief executive and the owner of The Washington Post. A legal fight over the contract is still active.

Soldiers have tested the Microsoft headsets for two years, the company said. The Army said the devices would be used in combat and training.

Microsoft said its testing of the headsets had helped the Defense Department’s “efforts to modernize the U.S. military by taking advantage of advanced technology and new innovations not available to military.”

The devices will “provide the improved situational awareness, target engagement and informed decision-making necessary” to overcome current and future adversaries, the Army said in a news release.

In 2018, Microsoft won a $480 million bid to make prototypes of the headsets. The Army said Wednesday that the new contract to produce them on a larger scale was for five years, with the option to add up to five more years.

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Even Suez Canal Blockage Can’t Hold Back Red-Hot Global Trade

A resurgent global economy, led by the U.S., will likely drive world trade higher this year, despite a series of acute disruptions to already strained supply chains, including last week’s blockage of the Suez Canal.

Surveys of manufacturers around the world that were released Thursday vividly depicted the current pressures on the globe-spanning supply chains that deliver to consumers everything from computers to lawn chairs.

In those surveys, factories recorded a near-universal complaint: Securing enough raw materials and other inputs to meet rising demand from customers is becoming increasingly difficult and expensive. Some manufacturers are reporting record high export orders.

But there were few signs the pickup in factory output that began in mid-2020 and has been driven by trade is coming to an end.

Pent-up demand around the world after a year of Covid-19 restrictions has been so high that shippers are running low on containers in which to ship goods by sea. But despite those shortages, the World Trade Organization expects flows of goods across borders to increase by 8% this year, more than reversing the 5.3% drop seen in 2020 as the pandemic hit factory output and shipping.

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Business Groups Push Back on Tax Increase in Biden Plan: Live Updates

15 years of higher taxes on corporations to pay for eight years of spending. The plans include raising the corporate tax rate to 28 percent from 21 percent. The corporate tax rate had been cut from 35 percent under former President Donald J. Trump.

The Business Roundtable said it supported infrastructure investment, calling it “essential to economic growth” and important “to ensure a rapid economic recovery” — but rejected corporate tax increases as a way to pay for it.

Policymakers should avoid creating new barriers to job creation and economic growth, particularly during the recovery,” the group’s chief executive, Joshua Bolten, said in a statement.

The U.S. Chamber of Commerce echoed that view. “We strongly oppose the general tax increases proposed by the administration, which will slow the economic recovery and make the U.S. less competitive globally — the exact opposite of the goals of the infrastructure plan,” the chamber’s chief policy officer, Neil Bradley, said in a statement.

Wall Street has been wary of possible tax increases since the presidential election and has hoped that gridlock in Washington would moderate Mr. Biden’s agenda. On Wednesday, a spokesman for JPMorgan Chase said the bank’s chief executive, Jamie Dimon, believed “that the corporate tax rate for companies in the U.S. has to be competitive globally, which it is now.”

But “he has no problem with high-income people like himself paying a higher tax rate,” said the spokesman, Joseph Evangelisti.

The Biden administration has indicated that tax increases for wealthy Americans will help fund the second phase of the infrastructure plan, which is expected to be announced next month and will focus on priorities like education, health care and paid leave. The increase in corporate taxes is an effort to “ensure that corporations pay their fair share,” White House officials said in a news release.

“With vaccinations becoming more widespread and confidence in travel rising, we’re ready to help customers reclaim their lives,” the chief executive of Delta Air Lines said.
Credit…Chang W. Lee/The New York Times

Delta Air Lines said Wednesday that it would sell middle seats on flights starting May 1, more than a year after it decided to leave them empty to promote distancing. Other airlines had blocked middle seats early in the pandemic, but Delta held out the longest by several months and is the last of the four big U.S. airlines to get rid of the policy.

The company’s chief executive, Ed Bastian, said that a survey of those who flew Delta in 2019 found that nearly 65 percent expected to have received at least one dose of a coronavirus vaccine by May 1, which gave the airline “the assurance to offer customers the ability to choose any seat on our aircraft.”

Delta started blocking middle seat bookings in April 2020 and said that it continued the policy to give passengers peace of mind.

“During the past year, we transformed our service to ensure their health, safety, convenience and comfort during their travels,” Mr. Bastian said in a statement. “Now, with vaccinations becoming more widespread and confidence in travel rising, we’re ready to help customers reclaim their lives.”

Air travel has started to recover meaningfully in recent weeks, with ticket sales rising and as well over one million people per day have been screened at airport checkpoints since mid-March, according to the Transportation Security Administration. More than 1.5 million people were screened on Sunday, the busiest day at airports since the pandemic began. Air travel is still down about 40 percent from 2019.

The Centers for Disease Control and Prevention continues to recommend against travel, even for those who have been vaccinated. This week, its director, Dr. Rochelle Walensky, warned of “impending doom” from a potential fourth wave of the pandemic if Americans move too quickly to disregard the advice of public health officials.

Delta also said on Wednesday that it would give customers more time to use expiring travel credits. All new tickets purchased in 2021 and credits set to expire this year will now expire at the end of 2022.

Starting April 14, the airline plans to bring back soft drinks, cocktails and snacks on flights within the United States and to nearby international destinations. In June, it plans to start offering hot food in premium classes on some coast-to-coast flights. Delta also announced changes that will make it easier for members of its loyalty program to earn points this year.

Deliveroo is now in 12 countries and has over 100,000 riders.
Credit…Toby Melville/Reuters

Deliveroo, the British food delivery service, dropped as much as 30 percent in its first minutes of trading on Wednesday, a gloomy public debut for the company that was promoted as a post-Brexit win for London’s financial markets.

The company had set its initial public offering price at 3.90 pounds a share, valuing Deliveroo at £7.6 billion or $10.4 billion. But it opened at £3.31, 15 percent lower, and kept falling. By the end of the day, shares had recovered only slightly, closing at about £2.87, 26 percent lower.

The offering has been troubled by major investors planning to sit out the I.P.O. amid concerns about shareholder voting rights and Deliveroo rider pay. Deliveroo, trading under the ticker “ROO,” sold just under 385 million shares, raising £1.5 billion.

The business model of Deliveroo and other gig economy companies is increasingly under threat in Europe as legal challenges mount. Two weeks ago, Uber reclassified more than 70,000 drivers in Britain as workers who will receive a minimum wage, vacation pay and access to a pension plan, after a Supreme Court ruling. Analysts said the move could set a precedent for other companies and increase costs.

Deliveroo, which is based in London and was founded in 2013, is now in 12 countries and has more than 100,000 riders, recognizable on the streets by their teal jackets and food bags. Last year, Amazon became its biggest shareholder.

Demand for Deliveroo’s services could soon diminish, as pandemic restrictions in its largest market, Britain, begin to ease. In a few weeks, restaurants will reopen for outdoor dining. Last year, Deliveroo said, it lost £226.4 million even as its revenue jumped more than 50 percent to nearly £1.2 billion.

Last week, a joint investigation by the Independent Workers’ Union of Great Britain and the Bureau of Investigative Journalism was published based on invoices of hundreds of Deliveroo riders. It found that a third of the riders made less than £8.72 an hour, the national minimum wage for people over 25.

Deliveroo dismissed the report, calling the union a “fringe organization” that didn’t represent a significant number of Deliveroo riders. The company said that riders were paid for each delivery and earn “£13 per hour on average at our busiest times.”

On Monday, shares traded hands in a period called conditional dealing open to investors allocated shares in the initial offering. The stock is expected to be fully listed on the London Stock Exchange next Wednesday and can be traded without restrictions from then.

Last week, Ed Bastian, the chief executive of Delta, said he thought Georgia’s voting law had been improved, but on Wednesday he sounded a very different note.
Credit…Etienne Laurent/EPA, via Shutterstock

The chief executive of Delta, Ed Bastian, sent a letter on Wednesday to employees expressing regret for the company’s muted opposition to a restrictive voting law passed last week by the Georgia legislature.

“I need to make it crystal clear that the final bill is unacceptable and does not match Delta’s values,” he wrote in an internal memo that was reviewed by The New York Times.

Mr. Bastian’s position is a stark reversal from last week. As Republican lawmakers in Georgia rushed to pass the new law, Delta, along with other big companies headquartered in Atlanta, came under pressure from activists to publicly and directly oppose the effort. Activists called for boycotts, and protested at the Delta terminal at the Atlanta airport.

Instead, Delta chose to offer general statements in support of voting rights, and work behind the scenes to try and remove some of the most onerous provisions as the new law came together. After the law was passed on Thursday, Mr. Bastian said he believed it had been improved and included several useful changes that make voting more secure.

But on Wednesday, after dozens of prominent Black executives called on corporate America to become more engaged in the issue, Mr. Bastian reversed course.

“After having time to now fully understand all that is in the bill, coupled with discussions with leaders and employees in the Black community, it’s evident that the bill includes provisions that will make it harder for many underrepresented voters, particularly Black voters, to exercise their constitutional right to elect their representatives,” he said. “That is wrong.”

Mr. Bastian went further, saying that the entire premise of the new law — and dozens of similar bills being advanced in other states around the country — was based on false pretenses.

“The entire rationale for this bill was based on a lie: that there was widespread voter fraud in Georgia in the 2020 elections,” Mr. Bastian said. “This is simply not true. Unfortunately, that excuse is being used in states across the nation that are attempting to pass similar legislation to restrict voting rights.”

Also on Wednesday, Larry Fink, the chief executive of BlackRock, issued a statement on LinkedIn saying the company was concerned about the wave of new restrictive voting laws. “BlackRock is concerned about efforts that could limit access to the ballot for anyone,” Mr. Fink said. “Voting should be easy and accessible for ALL eligible voters.”

Kenneth Chenault, left, a former chief executive of American Express, and Kenneth Frazier, the chief executive of Merck, organized a letter signed by 72 Black business leaders.
Credit…Left, Justin Sullivan/Getty Images; right, Spencer Platt/Getty Images

Seventy-two Black executives signed a letter calling on companies to fight a wave of voting-rights bills similar to the one that was passed in Georgia being advanced by Republicans in at least 43 states.

The effort was led by Kenneth Chenault, a former chief executive of American Express, and Kenneth Frazier, the chief executive of Merck, Andrew Ross Sorkin and David Gelles report for The New York Times.

The signers included Roger Ferguson Jr., the chief executive of TIAA; Mellody Hobson and John Rogers Jr., the co-chief executives of Ariel Investments; Robert F. Smith, the chief executive of Vista Equity Partners; and Raymond McGuire, a former Citigroup executive who is running for mayor of New York. The group of leaders, with support from the Black Economic Alliance, bought a full-page ad in the Wednesday print edition of The New York Times.

“The Georgia legislature was the first one,” Mr. Frazier said. “If corporate America doesn’t stand up, we’ll get these laws passed in many places in this country.”

Last year, the Human Rights Campaign began persuading companies to sign on to a pledge that states their “clear opposition to harmful legislation aimed at restricting the access of L.G.B.T.Q. people in society.” Dozens of major companies, including AT&T, Facebook, Nike and Pfizer, signed on.

To Mr. Chenault, the contrast between the business community’s response to that issue and to voting restrictions that disproportionately harm Black voters was telling.

“You had 60 major companies — Amazon, Google, American Airlines — that signed on to the statement that states a very clear opposition to harmful legislation aimed at restricting the access of L.G.B.T.Q. people in society,” he said. “So, you know, it is bizarre that we don’t have companies standing up to this.”

“This is not new,” Mr. Chenault added. “When it comes to race, there’s differential treatment. That’s the reality.”

A Huawei store in Beijing. The United States has placed strict controls on Huawei’s ability to buy and make computer chips.
Credit…Greg Baker/Agence France-Presse — Getty Images

The Chinese tech behemoth Huawei reported sharply slower growth in sales last year, which the company blamed on American sanctions that have both hobbled its ability to produce smartphones and left those handsets unable to run popular Google apps and services, limiting their appeal to many buyers.

Huawei said on Wednesday that global revenue was around $137 billion in 2020, 3.8 percent higher than the year before. The company’s sales growth in 2019 was 19.1 percent.

Over the past two years, Washington has placed strict controls on Huawei’s ability to buy and make computer chips and other essential components. United States officials have expressed concern that the Chinese government could use Huawei or its products for espionage and sabotage. The company has denied that it is a security threat.

In recent months, Huawei has continued to release new handset models. But sales have suffered, including in its home market. Worldwide, shipments of Huawei phones fell by 22 percent between 2019 and 2020, according to the research firm Canalys, making the company the world’s third largest smartphone vendor last year. In 2019, it was No. 2, behind Samsung.

Huawei remained top dog last year in telecom network equipment, according to the consultancy Dell’Oro Group, even as Britain and other governments blocked Huawei from building their nations’ 5G infrastructure.

Announcing the company’s financial results on Wednesday, Ken Hu, one of its deputy chairmen, said that despite the challenges, Huawei was not changing the broad direction of its business. Another Huawei executive recently revealed on social media that the company was offering an artificial intelligence product for pig farms, which some people took as a sign that Huawei was diversifying to survive.

Mr. Hu took note of the news reports about Huawei’s pig-farming product but said it was “not true” that the company was making any major shifts. “Huawei’s business direction is still focused on technology infrastructure,” he said.

Apple led the $50 million funding round in UnitedMasters, which allows musicians keep ownership of their master recordings.
Credit…Kathy Willens/Associated Press

Apple is investing in UnitedMasters, a music distribution company that lets musicians bypass traditional record labels.

Artists who distribute through UnitedMasters keep ownership of their master recordings and pay either a yearly fee or 10 percent of their royalties.

Apple led the $50 million funding round, announced on Wednesday, which values UnitedMasters at $350 million, the DealBook newsletter reports. Existing investors, including Alphabet and Andreessen Horowitz, also participated in the funding.

Musicians are increasingly taking ownership of their work. Taylor Swift, most famously, and Anita Baker, most recently, have publicized their fights with labels over their master recordings. Artists once needed the heft of major publishing labels — which typically demand ownership of master recordings — to build a fan base. But with social media, labels no longer play as significant a gatekeeping role. UnitedMasters has partnerships with the N.B.A., ESPN, TikTok and Twitch, deals that reflect the new ways that people discover music.

“Technology, no doubt, has transformed music for consumers,” said Steve Stoute, the former major label executive who founded UnitedMasters. “Now it’s time for technology to change the economics for the artists.” The deal with UnitedMasters is about “empowering creators,” Eddy Cue, Apple’s head of internet software and services, said.

As streaming services, including Apple’s, compete for subscribers, they are cutting more favorable deals with the artists who attract users to platforms. Spotify announced an initiative called “Loud and Clear” this week to detail how it pays musicians following public pressure.

An H&M store in Beijing. The retailer’s chief executive, Helena Helmersson, said H&M had a “long-term commitment” to China.
Credit…Kevin Frayer/Getty Images

More than a week after the Swedish retailer H&M came under fire in China for a months-old statement expressing concern over reports of Uyghur forced labor in the region of Xinjiang, a major source of cotton, the company published a statement saying it hoped to regain the trust of customers in China.

In recent days, H&M and other Western clothing brands including Nike and Burberry that expressed concerns over reports coming out of Xinjiang have faced an outcry on Chinese social media, including calls for a boycott endorsed by President Xi Jinping’s government. The brands’ local celebrity partners have terminated their contracts, Chinese landlords have shuttered stores and their products have been removed from major e-commerce platforms.

Caught between calls for patriotism among Chinese consumers and campaigns for conscientious sourcing of cotton in the West, some other companies, including Inditex, the owner of the fast-fashion giant Zara, quietly removed statements on forced labor from their websites.

On Wednesday, H&M, the world’s second-largest fashion retailer by sales after Inditex, published a response to the controversy as part of its first quarter 2021 earnings report.

Not that it said much. There were no explicit references to cotton, Xinjiang or forced labor. However, the statement said that H&M wanted to be “a responsible buyer, in China and elsewhere” and was “actively working on next steps with regards to material sourcing.”

“We are dedicated to regaining the trust and confidence of our customers, colleagues, and business partners in China,” it said.

During the earnings conference call, the chief executive, Helena Helmersson, noted the company’s “long-term commitment to the country” and how Chinese suppliers, which were “at the forefront of innovation and technology,” would continue to “play an important role in further developing the entire industry.”

“We are working together with our colleagues in China to do everything we can to manage the current challenges and find a way forward, ” she said.

Executives on the call did not comment on the impact of the controversy on sales, except to state that around 20 stores in China were currently closed.

H&M’s earnings report, which covered a period before the recent outcry in China, reflected diminished profit for a retailer still dealing with pandemic lockdowns. Net sales in the three months through February fell 21 percent compared with the same quarter a year ago, with more than 1,800 stores temporarily closed.

Stocks on Wall Street rose as investors waited for President Biden to lay out plans for a $2 trillion package of infrastructure spending on Wednesday, which he is expected to propose funding with an increase in corporate taxes.

The S&P 500 index gained about 0.7 percent by midday, while the Nasdaq composite climbed about 1.9 percent. Bonds fell, with the yield on 10-year Treasury notes at 1.72 percent. On Tuesday, the 10-year yield climbed as high 1.77 percent, a level not seen since January 2020.

Prospects of a strong economic recovery in the United States, supported by large amounts of fiscal spending and the vaccine rollout, have pushed bond yields higher. Economic growth and higher inflation have made bonds less appealing as investors adjust their expectations for how much longer the Federal Reserve will need to keep its easy-money policies.

The Ever Given cargo ship was stuck in the Suez Canal nearly a week.
Credit…Agence France-Presse — Getty Images

The traffic jam at the Suez Canal will soon ease, but behemoth container ships like the one that blocked that crucial passageway for almost a week aren’t going anywhere.

Global supply chains were already under pressure when the Ever Given, a ship longer than the Empire State Building and capable of carrying 20,000 containers, wedged itself between the banks of the Suez Canal last week. It was freed on Monday, but left behind “disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel,” according to A.P. Moller-Maersk, the world’s largest shipping company.

The crisis was short, but it was also years in the making, reports Niraj Chokshi for The New York Times.

For decades, shipping lines have been making bigger and bigger vessels, driven by an expanding global appetite for electronics, clothes, toys and other goods. The growth in ship size, which sped up in recent years, often made economic sense: Bigger vessels are generally cheaper to build and operate on a per-container basis. But the largest ships can come with their own set of problems, not only for the canals and ports that have to handle them, but for the companies that build them.

“They did what they thought was most efficient for themselves — make the ships big — and they didn’t pay much attention at all to the rest of the world,” said Marc Levinson, an economist and author of “Outside the Box,” a history of globalization. “But it turns out that these really big ships are not as efficient as the shipping lines had imagined.”

Despite the risks they pose, however, massive vessels still dominate global shipping. According to Alphaliner, a data firm, the global fleet of container ships includes 133 of the largest ship type — those that can carry 18,000 to 24,000 containers. Another 53 are on order.

A.P. Moller-Maersk said it was premature to blame Ever Given’s size for what happened in the Suez. Ultra-large ships “have existed for many years and have sailed through the Suez Canal without issues,” Palle Brodsgaard Laursen, the company’s chief technical officer, said in a statement on Tuesday.

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In today’s On Tech newsletter, Shira Ovide talks to New York Times reporter Karen Weise about the vote on whether to form a union at an Amazon warehouse in Bessemer, Ala., and how the outcome may reverberate beyond this one workplace.

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Suez Canal Struggles to Clear Logjam as Stream of Arrivals Continues

Suez Canal authorities are struggling to clear a backlog of vessels following the freeing of the Ever Given, as some shippers refuse new bookings and warn that the ripple effect of the blockage could linger for some time.

After the 1,300-foot container ship was towed out of the canal’s channel on Monday, Egyptian authorities promised to work quickly to resolve a buildup of hundreds of ships lying at anchor waiting for it to reopen. They estimated it would take two to three days to clear and that they could move 100 ships through the canal a day.

Canal authorities said that 81 vessels passed through Wednesday—42 southbound and 39 heading north. But even as they waved dozens of ships through over the past two days, more are arriving almost as quickly.

On Wednesday morning, there were 292 vessels waiting on both sides of the canal, according to Leth Agencies, a ship-services provider in the canal. That is a net reduction of 33 ships from Monday, before the Ever Given was refloated.

An additional 46 ships were expected to reach one of the entrances of the canal within the day, Leth said. A canal official said the new arrivals were slowing down efforts to end the logjam. “It is like we are doing nothing,” he said.

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Delta reverses course, calling Georgia’s voting law ‘unacceptable.’

15 years of higher taxes on corporations to pay for eight years of spending. The plans include raising the corporate tax rate to 28 percent from 21 percent. The corporate tax rate had been cut from 35 percent under former President Donald J. Trump.

The Business Roundtable said it supported infrastructure investment, calling it “essential to economic growth” and important “to ensure a rapid economic recovery” — but rejected corporate tax increases as a way to pay for it.

“Business Roundtable strongly opposes corporate tax increases” to pay for infrastructure investment, the group’s chief executive, Joshua Bolten, said in a statement. Policymakers should avoid creating new barriers to job creation and economic growth, particularly during the recovery.”

The U.S. Chamber of Commerce echoed Business Roundtable’s view. “We strongly oppose the general tax increases proposed by the administration, which will slow the economic recovery and make the U.S. less competitive globally — the exact opposite of the goals of the infrastructure plan,” the chamber’s chief policy officer, Neil Bradley, said in a statement.

Automakers embraced Mr. Biden’s bet to increase the use of electric cars. The plan proposes spending $174 billion to encourage the manufacture and purchase of electric vehicles by granting tax credits and other incentives to companies that make electric vehicle batteries in the United States instead of China.

“Customers want connected and increasingly electric vehicles, and we need to work together to build the infrastructure to help this transformation,” Jim Farley, the chief executive of Ford Motor, said in a statement. “Ford supports the administration’s efforts to advance a broad infrastructure plan that prioritizes a more sustainable, connected and autonomous future — including an integrated charging network and supportive supply chain, built on a foundation of safe roads and bridges for our customers.”

“With vaccinations becoming more widespread and confidence in travel rising, we’re ready to help customers reclaim their lives,” the chief executive of Delta Air Lines said.
Credit…Chang W. Lee/The New York Times

Delta Air Lines said Wednesday that it would sell middle seats on flights starting May 1, more than a year after it decided to leave them empty to promote distancing. Other airlines had blocked middle seats early in the pandemic, but Delta held out the longest by several months and is the last of the four big U.S. airlines to get rid of the policy.

The company’s chief executive, Ed Bastian, said that a survey of those who flew Delta in 2019 found that nearly 65 percent expected to have received at least one dose of a coronavirus vaccine by May 1, which gave the airline “the assurance to offer customers the ability to choose any seat on our aircraft.”

Delta started blocking middle seat bookings in April 2020 and said that it continued the policy to give passengers peace of mind.

“During the past year, we transformed our service to ensure their health, safety, convenience and comfort during their travels,” Mr. Bastian said in a statement. “Now, with vaccinations becoming more widespread and confidence in travel rising, we’re ready to help customers reclaim their lives.”

Air travel has started to recover meaningfully in recent weeks, with ticket sales rising and as well over one million people per day have been screened at airport checkpoints since mid-March, according to the Transportation Security Administration. More than 1.5 million people were screened on Sunday, the busiest day at airports since the pandemic began. Air travel is still down about 40 percent from 2019.

The Centers for Disease Control and Prevention continues to recommend against travel, even for those who have been vaccinated. This week, its director, Dr. Rochelle Walensky, warned of “impending doom” from a potential fourth wave of the pandemic if Americans move too quickly to disregard the advice of public health officials.

Delta also said on Wednesday that it would give customers more time to use expiring travel credits. All new tickets purchased in 2021 and credits set to expire this year will now expire at the end of 2022.

Starting April 14, the airline plans to bring back soft drinks, cocktails and snacks on flights within the United States and to nearby international destinations. In June, it plans to start offering hot food in premium classes on some coast-to-coast flights. Delta also announced changes that will make it easier for members of its loyalty program to earn points this year.

Deliveroo is now in 12 countries and has over 100,000 riders.
Credit…Toby Melville/Reuters

Deliveroo, the British food delivery service, dropped as much as 30 percent in its first minutes of trading on Wednesday, a gloomy public debut for the company that was promoted as a post-Brexit win for London’s financial markets.

The company had set its initial public offering price at 3.90 pounds a share, valuing Deliveroo at £7.6 billion or $10.4 billion. But it opened at £3.31, 15 percent lower, and kept falling. By the end of the day, shares had recovered only slightly, closing at about £2.87, 26 percent lower.

The offering has been troubled by major investors planning to sit out the I.P.O. amid concerns about shareholder voting rights and Deliveroo rider pay. Deliveroo, trading under the ticker “ROO,” sold just under 385 million shares, raising £1.5 billion.

The business model of Deliveroo and other gig economy companies is increasingly under threat in Europe as legal challenges mount. Two weeks ago, Uber reclassified more than 70,000 drivers in Britain as workers who will receive a minimum wage, vacation pay and access to a pension plan, after a Supreme Court ruling. Analysts said the move could set a precedent for other companies and increase costs.

Deliveroo, which is based in London and was founded in 2013, is now in 12 countries and has more than 100,000 riders, recognizable on the streets by their teal jackets and food bags. Last year, Amazon became its biggest shareholder.

Demand for Deliveroo’s services could soon diminish, as pandemic restrictions in its largest market, Britain, begin to ease. In a few weeks, restaurants will reopen for outdoor dining. Last year, Deliveroo said, it lost £226.4 million even as its revenue jumped more than 50 percent to nearly £1.2 billion.

Last week, a joint investigation by the Independent Workers’ Union of Great Britain and the Bureau of Investigative Journalism was published based on invoices of hundreds of Deliveroo riders. It found that a third of the riders made less than £8.72 an hour, the national minimum wage for people over 25.

Deliveroo dismissed the report, calling the union a “fringe organization” that didn’t represent a significant number of Deliveroo riders. The company said that riders were paid for each delivery and earn “£13 per hour on average at our busiest times.”

On Monday, shares traded hands in a period called conditional dealing open to investors allocated shares in the initial offering. The stock is expected to be fully listed on the London Stock Exchange next Wednesday and can be traded without restrictions from then.

Last week, Ed Bastian, the chief executive of Delta, said he thought Georgia’s voting law had been improved, but on Wednesday he sounded a very different note.
Credit…Etienne Laurent/EPA, via Shutterstock

The chief executive of Delta, Ed Bastian, sent a letter on Wednesday to employees expressing regret for the company’s muted opposition to a restrictive voting law passed last week by the Georgia legislature.

“I need to make it crystal clear that the final bill is unacceptable and does not match Delta’s values,” he wrote in an internal memo that was reviewed by The New York Times.

Mr. Bastian’s position is a stark reversal from last week. As Republican lawmakers in Georgia rushed to pass the new law, Delta, along with other big companies headquartered in Atlanta, came under pressure from activists to publicly and directly oppose the effort. Activists called for boycotts, and protested at the Delta terminal at the Atlanta airport.

Instead, Delta chose to offer general statements in support of voting rights, and work behind the scenes to try and remove some of the most onerous provisions as the new law came together. After the law was passed on Thursday, Mr. Bastian said he believed it had been improved and included several useful changes that make voting more secure.

But on Wednesday, after dozens of prominent Black executives called on corporate America to become more engaged in the issue, Mr. Bastian reversed course.

“After having time to now fully understand all that is in the bill, coupled with discussions with leaders and employees in the Black community, it’s evident that the bill includes provisions that will make it harder for many underrepresented voters, particularly Black voters, to exercise their constitutional right to elect their representatives,” he said. “That is wrong.”

Mr. Bastian went further, saying that the entire premise of the new law — and dozens of similar bills being advanced in other states around the country — was based on false pretenses.

“The entire rationale for this bill was based on a lie: that there was widespread voter fraud in Georgia in the 2020 elections,” Mr. Bastian said. “This is simply not true. Unfortunately, that excuse is being used in states across the nation that are attempting to pass similar legislation to restrict voting rights.”

Also on Wednesday, Larry Fink, the chief executive of BlackRock, issued a statement on LinkedIn saying the company was concerned about the wave of new restrictive voting laws. “BlackRock is concerned about efforts that could limit access to the ballot for anyone,” Mr. Fink said. “Voting should be easy and accessible for ALL eligible voters.”

Kenneth Chenault, left, a former chief executive of American Express, and Kenneth Frazier, the chief executive of Merck, organized a letter signed by 72 Black business leaders.
Credit…Left, Justin Sullivan/Getty Images; right, Spencer Platt/Getty Images

Seventy-two Black executives signed a letter calling on companies to fight a wave of voting-rights bills similar to the one that was passed in Georgia being advanced by Republicans in at least 43 states.

The effort was led by Kenneth Chenault, a former chief executive of American Express, and Kenneth Frazier, the chief executive of Merck, Andrew Ross Sorkin and David Gelles report for The New York Times.

The signers included Roger Ferguson Jr., the chief executive of TIAA; Mellody Hobson and John Rogers Jr., the co-chief executives of Ariel Investments; Robert F. Smith, the chief executive of Vista Equity Partners; and Raymond McGuire, a former Citigroup executive who is running for mayor of New York. The group of leaders, with support from the Black Economic Alliance, bought a full-page ad in the Wednesday print edition of The New York Times.

“The Georgia legislature was the first one,” Mr. Frazier said. “If corporate America doesn’t stand up, we’ll get these laws passed in many places in this country.”

Last year, the Human Rights Campaign began persuading companies to sign on to a pledge that states their “clear opposition to harmful legislation aimed at restricting the access of L.G.B.T.Q. people in society.” Dozens of major companies, including AT&T, Facebook, Nike and Pfizer, signed on.

To Mr. Chenault, the contrast between the business community’s response to that issue and to voting restrictions that disproportionately harm Black voters was telling.

“You had 60 major companies — Amazon, Google, American Airlines — that signed on to the statement that states a very clear opposition to harmful legislation aimed at restricting the access of L.G.B.T.Q. people in society,” he said. “So, you know, it is bizarre that we don’t have companies standing up to this.”

“This is not new,” Mr. Chenault added. “When it comes to race, there’s differential treatment. That’s the reality.”

A Huawei store in Beijing. The United States has placed strict controls on Huawei’s ability to buy and make computer chips.
Credit…Greg Baker/Agence France-Presse — Getty Images

The Chinese tech behemoth Huawei reported sharply slower growth in sales last year, which the company blamed on American sanctions that have both hobbled its ability to produce smartphones and left those handsets unable to run popular Google apps and services, limiting their appeal to many buyers.

Huawei said on Wednesday that global revenue was around $137 billion in 2020, 3.8 percent higher than the year before. The company’s sales growth in 2019 was 19.1 percent.

Over the past two years, Washington has placed strict controls on Huawei’s ability to buy and make computer chips and other essential components. United States officials have expressed concern that the Chinese government could use Huawei or its products for espionage and sabotage. The company has denied that it is a security threat.

In recent months, Huawei has continued to release new handset models. But sales have suffered, including in its home market. Worldwide, shipments of Huawei phones fell by 22 percent between 2019 and 2020, according to the research firm Canalys, making the company the world’s third largest smartphone vendor last year. In 2019, it was No. 2, behind Samsung.

Huawei remained top dog last year in telecom network equipment, according to the consultancy Dell’Oro Group, even as Britain and other governments blocked Huawei from building their nations’ 5G infrastructure.

Announcing the company’s financial results on Wednesday, Ken Hu, one of its deputy chairmen, said that despite the challenges, Huawei was not changing the broad direction of its business. Another Huawei executive recently revealed on social media that the company was offering an artificial intelligence product for pig farms, which some people took as a sign that Huawei was diversifying to survive.

Mr. Hu took note of the news reports about Huawei’s pig-farming product but said it was “not true” that the company was making any major shifts. “Huawei’s business direction is still focused on technology infrastructure,” he said.

Apple led the $50 million funding round in UnitedMasters, which allows musicians keep ownership of their master recordings.
Credit…Kathy Willens/Associated Press

Apple is investing in UnitedMasters, a music distribution company that lets musicians bypass traditional record labels.

Artists who distribute through UnitedMasters keep ownership of their master recordings and pay either a yearly fee or 10 percent of their royalties.

Apple led the $50 million funding round, announced on Wednesday, which values UnitedMasters at $350 million, the DealBook newsletter reports. Existing investors, including Alphabet and Andreessen Horowitz, also participated in the funding.

Musicians are increasingly taking ownership of their work. Taylor Swift, most famously, and Anita Baker, most recently, have publicized their fights with labels over their master recordings. Artists once needed the heft of major publishing labels — which typically demand ownership of master recordings — to build a fan base. But with social media, labels no longer play as significant a gatekeeping role. UnitedMasters has partnerships with the N.B.A., ESPN, TikTok and Twitch, deals that reflect the new ways that people discover music.

“Technology, no doubt, has transformed music for consumers,” said Steve Stoute, the former major label executive who founded UnitedMasters. “Now it’s time for technology to change the economics for the artists.” The deal with UnitedMasters is about “empowering creators,” Eddy Cue, Apple’s head of internet software and services, said.

As streaming services, including Apple’s, compete for subscribers, they are cutting more favorable deals with the artists who attract users to platforms. Spotify announced an initiative called “Loud and Clear” this week to detail how it pays musicians following public pressure.

An H&M store in Beijing. The retailer’s chief executive, Helena Helmersson, said H&M had a “long-term commitment” to China.
Credit…Kevin Frayer/Getty Images

More than a week after the Swedish retailer H&M came under fire in China for a months-old statement expressing concern over reports of Uyghur forced labor in the region of Xinjiang, a major source of cotton, the company published a statement saying it hoped to regain the trust of customers in China.

In recent days, H&M and other Western clothing brands including Nike and Burberry that expressed concerns over reports coming out of Xinjiang have faced an outcry on Chinese social media, including calls for a boycott endorsed by President Xi Jinping’s government. The brands’ local celebrity partners have terminated their contracts, Chinese landlords have shuttered stores and their products have been removed from major e-commerce platforms.

Caught between calls for patriotism among Chinese consumers and campaigns for conscientious sourcing of cotton in the West, some other companies, including Inditex, the owner of the fast-fashion giant Zara, quietly removed statements on forced labor from their websites.

On Wednesday, H&M, the world’s second-largest fashion retailer by sales after Inditex, published a response to the controversy as part of its first quarter 2021 earnings report.

Not that it said much. There were no explicit references to cotton, Xinjiang or forced labor. However, the statement said that H&M wanted to be “a responsible buyer, in China and elsewhere” and was “actively working on next steps with regards to material sourcing.”

“We are dedicated to regaining the trust and confidence of our customers, colleagues, and business partners in China,” it said.

During the earnings conference call, the chief executive, Helena Helmersson, noted the company’s “long-term commitment to the country” and how Chinese suppliers, which were “at the forefront of innovation and technology,” would continue to “play an important role in further developing the entire industry.”

“We are working together with our colleagues in China to do everything we can to manage the current challenges and find a way forward, ” she said.

Executives on the call did not comment on the impact of the controversy on sales, except to state that around 20 stores in China were currently closed.

H&M’s earnings report, which covered a period before the recent outcry in China, reflected diminished profit for a retailer still dealing with pandemic lockdowns. Net sales in the three months through February fell 21 percent compared with the same quarter a year ago, with more than 1,800 stores temporarily closed.

Stocks on Wall Street rose as investors waited for President Biden to lay out plans for a $2 trillion package of infrastructure spending on Wednesday, which he is expected to propose funding with an increase in corporate taxes.

The S&P 500 index gained about 0.7 percent by midday, while the Nasdaq composite climbed about 1.9 percent. Bonds fell, with the yield on 10-year Treasury notes at 1.72 percent. On Tuesday, the 10-year yield climbed as high 1.77 percent, a level not seen since January 2020.

Prospects of a strong economic recovery in the United States, supported by large amounts of fiscal spending and the vaccine rollout, have pushed bond yields higher. Economic growth and higher inflation have made bonds less appealing as investors adjust their expectations for how much longer the Federal Reserve will need to keep its easy-money policies.

The Ever Given cargo ship was stuck in the Suez Canal nearly a week.
Credit…Agence France-Presse — Getty Images

The traffic jam at the Suez Canal will soon ease, but behemoth container ships like the one that blocked that crucial passageway for almost a week aren’t going anywhere.

Global supply chains were already under pressure when the Ever Given, a ship longer than the Empire State Building and capable of carrying 20,000 containers, wedged itself between the banks of the Suez Canal last week. It was freed on Monday, but left behind “disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel,” according to A.P. Moller-Maersk, the world’s largest shipping company.

The crisis was short, but it was also years in the making, reports Niraj Chokshi for The New York Times.

For decades, shipping lines have been making bigger and bigger vessels, driven by an expanding global appetite for electronics, clothes, toys and other goods. The growth in ship size, which sped up in recent years, often made economic sense: Bigger vessels are generally cheaper to build and operate on a per-container basis. But the largest ships can come with their own set of problems, not only for the canals and ports that have to handle them, but for the companies that build them.

“They did what they thought was most efficient for themselves — make the ships big — and they didn’t pay much attention at all to the rest of the world,” said Marc Levinson, an economist and author of “Outside the Box,” a history of globalization. “But it turns out that these really big ships are not as efficient as the shipping lines had imagined.”

Despite the risks they pose, however, massive vessels still dominate global shipping. According to Alphaliner, a data firm, the global fleet of container ships includes 133 of the largest ship type — those that can carry 18,000 to 24,000 containers. Another 53 are on order.

A.P. Moller-Maersk said it was premature to blame Ever Given’s size for what happened in the Suez. Ultra-large ships “have existed for many years and have sailed through the Suez Canal without issues,” Palle Brodsgaard Laursen, the company’s chief technical officer, said in a statement on Tuesday.

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Cinemagraph
CreditCredit…By Erik Carter

In today’s On Tech newsletter, Shira Ovide talks to New York Times reporter Karen Weise about the vote on whether to form a union at an Amazon warehouse in Bessemer, Ala., and how the outcome may reverberate beyond this one workplace.

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Clearing the Suez Canal Took Days. Figuring Out the Costs May Take Years.

TOKYO — It took six days to prise free a giant container ship that ran aground and clogged the Suez Canal, one of the world’s most crucial shipping arteries. It could take years to sort out who will pay for the mess.

Cargo companies, insurers, government authorities and a phalanx of lawyers, all with different agendas and potential assessments, will not only need to determine the total damage, but also what went wrong. When they eventually finish digging through the morass, the insurers of the ship’s Japanese owner are likely to bear the brunt of the financial pain.

The costs could add up quickly.

There are the repairs for any physical damage to the Ever Given, the quarter-mile-long ship that got stuck in the Suez. There is the bill for the tugboats and front-end loaders that dug the beached vessel out from the mud. The authority that operates the Suez Canal has already said the crisis has cost the Egyptian government up to $90 million in lost toll revenue as hundreds of ships waited to pass through the blocked waterway or took other routes.

And the stalled ship held up as much as $10 billion of cargo a day from moving through the canal, including cars, oil, livestock, laptops, sneakers, electronics and toilet paper. Companies delivering goods may have to pay customers for missed deadlines. If any agricultural goods went bad, producers may look to recoup lost revenue.

Richard Oloruntoba, an associate professor of supply chain management at the Curtin Business School in Perth, Australia.

Jeff N.K. Lee, a lawyer in Taipei who specializes in commercial and transportation law.

“While the ship is just parked there, the cargo isn’t actually being damaged,” Mr. Lee said. “The only damage is that it’s delayed.”

“Say I have a batch of cloth, and on top of the time it took to come to Taiwan, it got stuck for six or seven days,” he said. “It just sat there. Will it go bad? It won’t.”

There is a caveat. The ship’s owner could have to pay for cargo delays, if its crew is found to be at fault for the accident.

Some so-called third-party claims related to delayed cargo may be covered by yet another insurer for the ship, the UK P&I Club. The same goes for any claims by the Suez Canal Authority, which operates the waterway and might file over any loss of revenue.

Nick Shaw, chief executive of the International Group of Protection and Indemnity Clubs, the umbrella group that includes the UK P&I Club, said the insurer would “make decisions together with the shipowner as to which ones had validity and which ones are illegitimate.”

Adding to the complexity of the Suez accident are the layers upon layers of insurance. Reinsurers, companies that covers the risk of other insurance companies, come into play for claims above $100 million. Between insurance and reinsurance, the ship’s owner has coverage for those third-party claims up to $3.1 billion, although few experts believe the damages will run that high.

The sheer size of the Ever Given makes the situation all the more labyrinthine. Aside from time of war, the Suez Canal has never been blocked quite so spectacularly or for as long a time as it was with the Ever Given, and this is the biggest ship to run aground.

The ship is as long the Empire State Building is tall, with the capacity to carry 20,000 containers stacked 12 to 14 high. The Ever Given is one of a fleet of 13 in a series designed by Imabari, part of a push to lower the costs per container and make the ships more competitive in an increasingly fierce market dominated by Chinese and South Korean shipbuilders.

“The bigger the ships get, the risk is whenever you have an incident like this is that you are putting more of your eggs into one basket,” said Simon Heaney, senior manager of container research at Drewry UK, a shipping consultancy. “So the claims will magnify.”

Raymond Zhong and Amy Chang Chien contributed reporting from Taipei, Taiwan. Vivian Yee contributed from Cairo and Makiko Inoue, Hisako Ueno, Hikari Hida from Tokyo.

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Suez Canal Pilots Under Scrutiny Amid Effort to Clear Backlog

ISMAILIA, Egypt—With ships moving again in the Suez Canal after the Ever Given was unstuck, the Egyptian sailors tasked with piloting huge vessels through one of the world’s busiest waterways are back at work—and facing growing scrutiny.

Authorities plan to more than double the number of vessels passing through the 120-mile canal each day to clear a backlog of more than 400 ships that were left waiting for days after the Ever Given ran aground a week ago. Local regulations require that one or two pilots, in some cases three, must be on board to help captains navigate the narrow channel. To meet the increased demand, some former pilots since assigned to desk jobs are being sent back to the canal.

The pilots, many of whom are retired sailors from the Egyptian Navy, haven’t always been entirely welcome.

In 2017, a local shipping agent complained about pilots demanding 17 cartons of cigarettes and other goods to let his ship pass. The head of the Suez Canal Authority at the time dismissed his remarks as an attempt to besmirch Egypt’s reputation.

One current pilot said demands for cigarettes and free food were once commonplace. By tradition, canal workers divide up their haul among themselves, a former pilot said.

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Suez Canal Opens, but Shipping Will Be Snarled for Months

The bridge of the oil tanker Navig8 Aronaldo erupted in cheers after Capt. Malik Naushad told his crew to prepare to weigh anchor midnight Tuesday and start their voyage out of the Suez Canal, where they had been stuck for six days by the grounding of the Ever Given.

Back at the German offices of Jan Held, whose family firm has three different ships stuck at Suez, the mood wasn’t as jubilant. Watching a live feed of the Ever Given move off the bank, Mr. Held knew that uncorking the biggest traffic jam in global shipping in recent years could take a long time to resolve, and set off a scramble for berths and clear routes.

“You see a lot of bizarre things in shipping,” said Mr. Held, a former ship’s captain himself and co-owner of Held Bereederungs GmbH & Co KG, based in the north German city of Haren. “But with this, you knew it would have repercussions around the world.”

Late Tuesday, ships were again moving through the Suez Canal, a day after engineers freed the Ever Given, a 1,300-foot container ship, and cleared the waterway for global traffic. Osama Rabie, chairman of the Suez Canal Authority, which runs the 120-mile shipping route, said at a press conference that 113 ships had crossed in both directions since the route reopened late Monday, and another 95 are expected to pass through in the evening, up from the typical 50 or so daily passages. 

Egyptian officials say the logjam will be cleared in three to four days. Shipping executives say it will take days longer. Leth Agencies, a ship’s services provider in the Suez, said 352 vessels are still awaiting transit.

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