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Amazon Axes Delivery Partners Around U.S.; Hundreds of Jobs Lost

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(Bloomberg) — Amazon.com Inc. is severing ties with small delivery firms around the country — putting hundreds of drivers out of work — in an effort to eliminate partners that aren’t meeting its standards.Bear Down Logistics, an Illinois company that rapidly expanded over the past two years, is shuttering operations in five states and letting go about 400 drivers. Delivery Force, another Amazon delivery partner in Washington, is cutting 272 drivers in Seattle and other cities. Around the country, logistics firms are notifying state officials about facility closures and job cuts, signs that Amazon is culling the herd.The action underscores the challenges of outsourcing deliveries to new, untested companies instead of traditional partners such as United Parcel Service Inc. and FedEx Corp. It also serves as a warning to Amazon delivery partners that the company is an exacting client willing to cut them off.Bear Down Logistics notified Ohio, Virginia, Minnesota and Illinois that it would close facilities in those states in April, resulting in the loss of almost 280 jobs. Another Bear Down facility near Grand Rapids, Michigan, will also close in April, according to documents reviewed by Bloomberg. About 120 drivers work at the Michigan facility, said a person familiar with the matter who spoke on condition of anonymity due to company policies about speaking with the media. The company also has Amazon delivery operations in Wisconsin, the status of which was not immediately clear.“We have a responsibility to our customers and the communities where we operate to ensure these partners meet our high standards for things like safety and working conditions,” an Amazon spokeswoman said in an email. “Occasionally we need to end a relationship with a partner and when this happens we are committed to helping the impacted employees find opportunities with other delivery service partners or to learn more about the thousands of available roles at Amazon delivery stations and fulfillment centers.”Bear Down Logistics and Delivery Force didn’t immediately respond to requests for comment.Amazon in 2018 launched a program encouraging aspiring entrepreneurs to lease vans, hire drivers and build their own businesses delivering packages to its customers. More than 800 such businesses have sprouted around the country with 75,000 drivers, helping Amazon increase delivery capacity. Amazon also has greater negotiating leverage over each small operator than it does with larger delivery partners like UPS, FedEx and the U.S. Postal Service.Drivers working for Amazon delivery partners typically earn less than their counterparts working at larger delivery companies like UPS, which helps Amazon lower costs. One driver working for Bear Down Logistics in Michigan said he earned about $15 an hour delivering Amazon packages, while UPS paid seasonal drivers doing the same work in that area about $20 an hour.A big challenge for Amazon is balancing safety with its efforts to deliver things quickly at the lowest possible cost. ProPublica in December revealed internal Amazon documents showing it prioritized speed over safety in its delivery network, which followed other investigations exposing the injuries and deaths that accompanied Amazon’s quick expansion of its delivery program.The Bear Down experience also shows how hard it is to make a go of such businesses. When Amazon courted entrepreneurs, it touted the prospects of earning $300,000 a year with as little as $10,000 in up front costs, significantly less than most franchise businesses that can cost more than $100,000 to launch.To contact the reporters on this story: Spencer Soper in Seattle at ssoper@bloomberg.net;Matt Day in Seattle at mday63@bloomberg.netTo contact the editors responsible for this story: Robin Ajello at rajello@bloomberg.net, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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N.Y. Has Fewest Hospitalizations; Fauci Optimistic: Virus Update

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(Bloomberg) — New York state reported the fewest hospitalizations since the outbreak began even as it recorded the most deaths in a 24-hour period. The top U.S. infectious-disease expert said the final death toll may be lower than earlier estimated.Spain is poised to extend a nationwide lockdown, a step also being considered by Italy. The U.K. may keep curbs in place as Prime Minister Boris Johnson’s condition improves in intensive care.Stocks rallied after the Federal Reserve acted to provide as much as $2.3 trillion in aid, even as huge numbers of Americans again applied for jobless benefits.Key Developments:Global cases top 1.5 million; deaths pass 90,000: Johns HopkinsSpain, Italy to extend lockdowns amid persistent rise in casesCostly CT scans filling virus testing void for U.S. doctorsUBS, Credit Suisse will split payouts for 2019 into two installmentsSouth Korea’s CDC says virus may “reactivate” in cured patientsRaab Says Too Soon to End U.K. Limits (1:20 p.m. NY)It’s too soon for the U.K. to relax the lockdown imposed almost three weeks ago that was set to end Monday, Foreign Secretary Dominic Raab said in a televised briefing.“Deaths are still rising, and we still haven’t seen the peak of the virus,” he said.U.K. deaths rose by 881 to bring the total to 7,978. Patrick Vallance, the government’s chief scientific adviser, warned he expects the number of deaths to increase for “a few weeks.” Raab, in charge of the government while Prime Minister Boris Johnson is in critical care with the virus, said the premier is still in intensive care and is making progress: “He’s in good spirits.”Italy’s Deaths, Cases Rise (12:15 p.m. NY)Italy reported a higher number of new coronavirus cases and deaths as the government considers extending a national lockdown.Civil protection authorities reported 4,204 new cases, up from 3,836 a day earlier. Italy registered 610 deaths in the past 24 hours, compared with 542 the day before. Total fatalities reached 18,279.Prime Minister Giuseppe Conte is preparing to extend the national lockdown that ends April 13 for another two weeks, said officials who asked not to be identified discussing a confidential issue.N.Y. Hospitalizations Drop (12:10 p.m. NY)New York City reported a record 824 deaths in 24 hours, a grim sign that despite flattening infection curves and lower hospital admissions, the crisis in the largest U.S. city is far from over.Statewide, the rate worsened with 799 new deaths on Thursday, 779 the previous day and 731 the day before that. The city and state take snapshots at different times during the day, which may account for the discrepancy in reporting.At his daily briefing, Governor Andrew Cuomo reported only 200 net new hospitalizations over 24 hours, the lowest number since the crisis broke out. That number had been as high as 1,400. But Cuomo is urging people to keep social distancing practices in place and keep the progress going.Turkey Aids Israel With Medical Gear (11:30 a.m. NY)Turkey approved the sale of medical equipment on humanitarian grounds to Israel, including face masks, protective overalls and sterile gloves. Israel is expected to allow a similar shipment of Turkish aid to reach Palestinian authorities without delay, according to a senior Turkish official in Ankara.Three planes from Israel are expected Thursday at an air base near Incirlik to pick the cargo, said the official, who asked not to be named discussing the sensitive issue. Turkey will donate medical aid for the Palestinians within the next few days, the official said.Israeli authorities weren’t immediately available for comment on Thursday, which is a public holiday in the country.Africa Has Chance to Contain Outbreak: WHO (10:40 a.m. NY)Much of the African continent still has a chance to contain the coronavirus pandemic, the World Health Organization said at its weekly Africa briefing. While a few African countries are experiencing a rapid increase in local transmissions, more than 30 nations can still prevent a larger outbreak by testing, contact tracing and isolating patients, the WHO said.Merkel Says Tighter Measures Likely Unnecessary (9:56 a.m. NY)Tighter measures to contain the coronavirus in Germany probably won’t be necessary as the slowing spread of the disease gives grounds for “cautious hope,” Merkel told reporters in Berlin on Thursday after a cabinet meeting.GE Sees Cash Flow Keeping Pace Despite Hit to Earnings (9:28 a.m. NY)General Electric Co. said its first-quarter cash flow will be in line with expectations even as the outbreak brings profit “materially below” its prior projection. GE withdrew its forecast for the full year.Canada’s Curve May Be Flattening (9:17 a.m. NY)Three weeks after the governments of Canada’s three most populous provinces told their 28.4 million residents to stay home, the measures appear to be working. The provinces, which have three-quarters of Canada’s people, have recorded just 1.2 deaths from Covid-19 per 100,000 residents. That compares with 32 for New York, 10 for Michigan and 6 for Washington.Canada’s coronavirus case count has been increasing slower than most countries, said Theresa Tam, the nation’s chief public health officer. The number doubles every three to five days. The government expects between 22,580 to 31,850 cases by April 16, which could mean 500 to 700 total deaths, Tam said.Morgan Stanley’s CEO Says He Had Virus, Now Recovered (9:10 a.m. NY)Gorman told staff he contracted coronavirus and has since recovered. He had flu-like symptoms last month and tested positive, he said in a message to the bank’s employees. Gorman was never hospitalized, self-isolated in his home and has been cleared by his doctor.Fed Announces Plan for Muni, Business Aid; Jobless Claims (8:43 a.m. NY)The steps announced include starting programs to aid small and mid-sized businesses, as well as state and local governments.A total of 6.61 million Americans filed jobless claims in the week ended April 4, according to Labor Department figures released Thursday. That exceeded a median forecast of 5.5 million.Deaths in Sweden Increase Amid Relatively Relaxed Stance (8:41 a.m. NY)Sweden reported 106 more virus-related deaths on Thursday, taking the total to 793, on par with the daily gains reported in the past week. The Nordic country is under scrutiny as it continues to experiment with a laxer policy response compared with the rest of Europe. Restaurants, shopping centers and primary schools all remain open in Scandinavia’s biggest economy. Deaths in Sweden continue to outpace its Nordic neighbors, which implemented stricter measures to curb the spread early on, and are now discussing how to lift them.U.S. Virus Fatalities Looking More Like 60,000, Fauci Says (8:10 a.m. NY)“I believe we are going to see a downturn” and projections look “more like the 60,000 than the 100,000 to 200,000,” National Institutes of Allergy and Infectious Diseases chief Anthony Fauci said in response to an NBC interview question about virus fatality models. Fauci said he thinks the U.S. is starting to see a flattening of the curve in New York. “I don’t want to jump the gun on that but I think that is the case,” he said.Pfizer to Develop Vaccine by Year-End (8 a.m. NY)Pfizer and BioNTech said they will jointly develop a vaccine for Covid-19, potentially supplying millions of doses by the end of 2020. The two companies plan to jointly conduct the first clinical trials as early as the end of April, assuming regulatory clearance. Clinical trials for the vaccine candidates will initially be in the U.S. and Europe across multiple sites.Earlier, IBio jumped 25% in pre-market trading after reaching an agreement with the Infectious Disease Research Institute to support development of a vaccine for Covid-19. And Biohaven Pharmaceutical Holding got an FDA “may proceed” letter to begin a Phase 2 trial of intranasal vazegepant to treat lung inflammation after COVID-19 infection.U.K. PM Johnson Continues to Improve (7:58 a.m. NY)“The prime minister had a good night and continues to improve in intensive care in St Thomas’ Hospital,” Boris Johnson’s spokesman James Slack told reporters. Johnson is “receiving standard oxygen treatment,” Slack said. U.K. officials are drawing up plans to extend the lockdown and Foreign Secretary Dominic Raab will chair a meeting of the government’s emergency committee at 3:30 p.m.World Hunger Could Double (7:56 a.m. NY)The number of people going hungry around the world could double in just a few months as the pandemic wreaks havoc on food supplies and hurts incomes, according to a group of major food companies, industry bodies and academics. The number of those suffering from chronic hunger may surge from about 800 million.Charity group Oxfam had earlier warned the economic hit from coronavirus threatens to put more than half a billion people into poverty unless countries take action to cushion the blow.Netherlands Reports Slowest Hospital Intake (7:50 a.m. NY)The Netherlands recorded 237 new hospital intakes, a 3% increase and marking the lowest daily gain since the outbreak began. Confirmed cases rose 6% to 21,762, while fatalities advanced 7% to a total of 2,396.London Delays Pollution Controls for Trucks (7:40 a.m. NY)London delayed the start of stricter pollution controls for trucks in the capital, because the pandemic has put too much pressure on supply chains. New minimum standards for freight are due to come into force in October with fines of as much as 550 pounds ($683) per day. Enforcement will be delayed for at least four months, Transport for London said. It’s already suspended other pollution and congestion charges for cars and van, to ensure deliveries can take place and for key workers to travel.Irish Unemployment Soars (7:20 a.m. NY)Irish unemployment may have risen to its highest level since 1988, in the latest sign of the impact of the coronavirus on the economy. Unemployment rose to 16.5% last month if it is adjusted to include people receiving government support because of the coronavirus crisis, the Central Statistics Office said in a statement. The adjusted rate “should be considered as the upper bound for the true rate of unemployment,” it said.U.S. Poised to Pass Italy With Deadliest Outbreak (7:07 a.m. NY)The U.S. is on track for a grim milestone in the coming days — passing Italy as the world’s epicenter of Covid-19 mortality. Deaths from the virus were at about 14,800 in the U.S. as of Thursday morning and still accelerating, while Italy had more than 17,600 fatalities and the pace was beginning to slow, according to data compiled by Bloomberg. The U.S. has logged about 2,000 deaths each of the past two days, while in Italy, the number has hovered around 550 daily deaths.German Study Finds Virus in 15% of Hard-Hit Town (6 a.m. NY)The coronavirus probably infected 15% of people in Gangelt, a small town in the hard-hit rural German region of Heinsberg, researchers said in preliminary results after using antibody tests to sample a random portion of the population. On that basis, the case mortality rate in the town so far would be 0.37%, less than one-fifth of the mortality rate based on confirmed positive tests in Germany as a whole, the researchers said.The difference is because the antibody test picked up mild cases of the virus that had previously gone unnoticed. The researchers didn’t disclose how many lab-confirmed cases of the virus had previously been found in the 12,500-person town. In the Heinsberg region as a whole, less than 1% of the population has tested positive for the virus, and 44 patients have died, according to the Robert Koch Institute.Infections and Deaths in Spain Slow (6 a.m. NY)Spain reported fewer coronavirus deaths and new cases on Thursday in Europe’s second-most deadly outbreak of the disease. There were 5,756 new infections in the 24 hours through Thursday, pushing the total above 150,000, according to Health Ministry data. The death toll rose by 683 to 15,238, a smaller gain than Wednesday’s 757.Iran also reported a decline in cases and fatalities. The health ministry reported 1,634 new cases, down from 1,997, and 117 deaths, down from 121. That brings the country’s total to 66,220 cases and 4,110 fatalities.India Steps Up Stringent Lockdown Measures (5:54 p.m. HK)India has further tightened lockdown measures and enhanced surveillance at hundreds of areas designated as virus hotspots, as Prime Minister Narendra Modi described the epidemic as a “social emergency.” Authorities have sealed settlements, lanes and apartment complexes in the financial capital Mumbai, as well as in Delhi and the neighboring state of Uttar Pradesh, allowing in only medical services, surveillance workers and those delivering food and other essential items.Botswana Quarantines Lawmakers (5:35 p.m. HK)Botswana is placing its entire cabinet and members of parliament in quarantine after a health worker screening lawmakers for coronavirus was found to be infected. All lawmakers, as well as President Mokgweetsi Masisi, will go into quarantine on Thursday.KLM, Philips Set Up China Airlink (5:20 p.m. HK)Air France-KLM will start a temporary airlink to China with support from Royal Philips NV and the Dutch government to increase the transport capacity of medical equipment and other supplies between China, Europe, and the U.S. KLM will temporarily return two Boeing 747s which it phased out last month to operate five weekly flights to Beijing and Shanghai from its base at Amsterdam Schiphol.The first flight is set to take of on April 13, and add to the “skeleton operation” Air France-KLM announced earlier today, which includes regular cargo flights to destinations around the world, including the U.S. The operations are expected to remain in place for six to eight weeks.Indonesia Reports Highest One-Day Virus Deaths (5:10 p.m. HK)Indonesia reported the largest number of deaths in a single day since the outbreak and new confirmed cases continued to climb in the world’s fourth-most populous nation. The death toll jumped to 280 with 40 more fatalities reported in the past 24 hours, while the number of new cases surged by 337, the highest since the country reported its first case in early March, taking total infections to 3,293.Italian Cabinet Meets (4:45 p.m. HK)Italian Prime Minister Giuseppe Conte was set to hold a cabinet meeting at 11 a.m. in Rome. La Stampa reported earlier that the government plans to extend its lockdown by two weeks as scientists warn Conte that it’s too early to relax confinement measures,. The government will approve a decree on Friday to extend the closures beyond the current April 13 expiration date, the newspaper said.Conte told BBC the country may start easing the lockdown by the end of the month. If scientists confirm that Italy can start a gradual return to activity, “we might begin to relax some measures by the end of this month,” he said. Italian steelmakers are in talks with the government to restart at reduced capacity in the coming weeks.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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Why Costco’s big March sales jump isn’t such good news for other big box retailers

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On the face of it, any retailer’s report of a monthly sales jump of 12% in this environment should be a source of relief for the beleaguered industry.

But peer into Costco Wholesale’s March revenue numbers more closely, and you will see signs that even the most successful chains could be in for a hard time now, with many new restrictions put in place to curb the spread of the coronavirus at the nation’s stores.

The warehouse operator, the second largest U.S. retailer after Walmart and a consumer spending bellwether, reported on Wednesday that comparable sales, a metric that strips out the impact of stores opened or closed in the last year, had risen 12.1% in the United States in March, excluding the impact of changes in gas prices.

That unusually high increase should come as no surprise to anyone who saw scenes on national television of Americans stocking up on food, toilet paper, cleaning products, computers, and home goods in early March in fear of shortages of staples.

But Wall Street analysts had expected Costco to report a 24% increase in U.S. comparable sales, according to Consensus Metrix. And it’s easy to see why they were so optimistic: Target on March 25 said its comparable sales had risen 20% for the month at that point, while the Wall Street Journal last week reported Walmart had seen a similar jump, citing confidential documents.

Costco said that in mid-March, things changed after it took steps to reduce the risk of contamination for shoppers and workers. Those steps included limiting the number of people allowed in the store, reducing service at its food court—including handing out samples, one of the most popular features of a visit to Costco—and closing areas like its optical and hearing departments altogether.

“These developments slowed sales compared to the first half of March,” David Sherwood, a member of Costco’s investor relations unit, said on a conference call. Sherwood told Fortune that the limit of customers in a store at any given time had been 1,000 people, depending on the store, and that has been reduced even further.

In the last week, one big retailer after the other has announced similar limits to the ones that dented Costco’s business in the second half of March. Walmart said it would limit the number of shoppers in a store to 20% of capacity, while Target will meter the number of people who can be in a store, something Walgreens has been doing for a while.

Kroger, Aldi, and other grocers are taking similar steps. Those include one-way shopping aisles, which make the flow of customers more efficient but will cost retailers sales if, say, someone forgot to pick up some spaghetti sauce when they walked passed that shelf earlier, and now it’s too hard to go back.

What’s more, a big factor in the March sales jumps has been stock-up trips for food and essentials in fear of shortages, concerns that are now abating as retailers reassure customers about product availability. As Walmart’s executive vice president of corporate affairs put it a few days ago: “Our supply chain is getting used to this new normal.”

And in a worrisome development for a whole slew of retailers, Costco said that comparable sales of so-called “hardline” goods, which includes electronics and appliances, had fallen, as had those of tires and sporting goods.

Home Depot and Lowe’s, entering their busiest periods of the year, could be facing dampened demand for appliances. Home Depot is also limiting installation appointments. Best Buy, which enjoyed an initial surge in sales in early March as people snapped up computers, iPads, and other electronics ahead of a potentially long quarantine, no longer lets people inside stores, something likely to hurt sales. The retailer does allow curbside pickup of online orders.

Some retailers like Best Buy and Target, despite seeing a boost in sales early on in the pandemic and being among the essential retailers allowed to stay open, were quick to announce steps to conserve cash last month and withdraw financial forecasts, in acknowledgement of how volatile the situation has been for these big chains.

What’s becoming clear is that even retailers able to operate stores these days because they are deemed essential won’t escape the coronavirus’ bite into their sales.

More must-read retail coverage from Fortune:

—Coronavirus will pummel already weak retailers long after it’s been contained
—Liquor brands are sponsoring relief programs for bar and restaurant industry workers
Cannabis companies get a big bump in sales and not just from the wake-and-bake set
—Levi’s focuses on keeping customers’ attention online while stores are closed
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The greatest designs of modern times

Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.



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Break for Asia’s clogged capitals as coronavirus curbs traffic

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MANILA – Strict lockdowns, school closures and curbs on commerce are giving Asia’s congested capitals rare respite from transport mayhem, as the global fight to contain the coronavirus creates a free-flow of traffic not seen in years.

Horns have fallen silent across many Asian cities as cars, vans and motorcycles hum along highways in India, Thailand, the Philippines and Indonesia, home to some of the world’s worst traffic jams, and its worst levels of air pollution.

Reuters journalists have captured footage of various intersections in New Delhi, Bangkok, Manila and Jakarta, contrasting previous chaos with a new calm that has followed government measures to arrest the spread of the highly contagious virus.

Seven of the 11 most gridlocked cities in the world are in Asia, according to the 2019 Traffic Index of Dutch digital mapping company TomTom, topped by Bangalore then Manila, where the average driver spends the equivalent of 10 days a year in traffic queues.

In Manila, where street snarl-ups cause an estimated $67 million in daily business losses, the city’s chronically jammed Epifanio Delos Santos Avenue (EDSA) thoroughfare was unusually quiet, with home quarantine measures keeping most of the city’s 3.5 million registered vehicles off the roads.

An average 400,000 of those use EDSA on a typical day, according to the transport authority, but strict lockdown laws in the Philippines – which has 3,870 confirmed cases – have slashed traffic volume by a staggering 96% compared to a year ago, according to TomTom data.

That data was compiled as Reuters crew filmed its 23.8-kilometer commute, which took just 20 minutes compared to more than two hours normally.

In Delhi, which has nearly 11 million registered vehicles, congestion was down by about 59%, due to a lockdown of the country’s 1.3 billion people. India has reported 4,789 cases

Traffic is lighter too in Jakarta two weeks into a state of emergency that saw schools close and employees encouraged to work from home. Volume was down 48% from a year ago at the time of filming on Tuesday. Indonesia has 2,738 reported cases.

Authorities in Singapore are expecting a sharp traffic reduction following closures of offices and schools, while Malaysia is seeing quieter streets in its capital Kuala Lumpur, where an average 509,000 vehicles drive on an average day.

Bangkok registered a million new vehicles last year, adding to 10 million already in use, but few were around on Tuesday, and no sign of the usual jostling between cars and motorcycles.

Thailand, which has 2,258 confirmed coronavirus cases, has closed malls and entertainment venues and is encouraging working from home, helping to cut Bangkok’s traffic on Tuesday by 31%. — Reuters



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