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By Paul Page 

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Sony Corp. is making a costly change in manufacturing to protect itself from bigger losses in its supply chain. The Japanese electronics giant says it will book a $366 million operating loss in the current fiscal year on its business making parts for smartphones, the WSJ's Yuka Koshino and Takashi Mochizuki report. The company is scaling back development and production of parts that it has hoped to make for Apple Inc., but now faces a hazy future in the market, with Apple's sales sluggish, smartphone sales growth world-wide tepid and the prospects for unwanted inventory buildup looming larger. Sony had already been coping with the hit to production when earthquakes hit its parts factory in southern Japan as it addressed questions about a parts business that has been a pillar of its ambitious growth plans. Now, company officials say the component-production process is too complex to adjust output when the smartphone industry changes quickly.

Shipping crude oil is becoming more unpredictable for railroads as refiners slash costs in their supply chains. Patrick J. Ottensmeyer, the incoming CEO at Kansas City Southern Railway Inc., says refiners are using uncommon flexibility in sourcing oil as they cope with energy sector upheaval, the WSJ's Laura Stevens reports. The push for oil from the cheapest source, whether international or domestic, is making rail tank car operations tougher to plan for as freight railroads scramble to get the right equipment in the right place. The only certainty has been the general downturn in demand: crude-by-rail shipments fell 44% in the first quarter from a year ago. With less oil moving on tracks, tank car owners may question how much they'll invest in retrofitting or buying new tank cars to meet new regulatory requirements, which could make the right equipment harder to find.

Sports Authority Holdings Inc. is a big step closer to liquidation. A federal bankruptcy judge gave the go-ahead to a group of liquidators to start unloading inventory at steep price discounts as soon as this weekend, one of the last big steps toward shuttering the bankrupt big-box retailer entirely, the WSJ's Lillian Rizzo reports. That will make Sports Authority the most prominent casualty this year in the upheaval underway in the retail world, Liquidators will pay a guaranteed 101% of the value of the inventory. The judge's ruling put the liquidation on a fast track, as she overruled lease holders and vendors to move things forward. The impact is already rolling across the retailer's national network of stores and warehouses. Workers at the company's distribution center in northern New Jersey were given notices that they would be laid off as early as June 10, the Newark Star-Ledger reports.

SUPPLY CHAIN STRATEGIES

Australian mining companies are finding an unlikely source of relief from the commodities slump -- beef. Mining companies including BHP Billiton Ltd. and Rio Tinto PLC are rearing cattle on land that has been set aside for minerals exploration, steering away from commodities business marked by a glut toward meat markets coping with a beef shortage, the WSJ's Rhiannon Doyle reports. The miners are finding conditions in cattle ranching so sharply different from the minerals trade, where prices for iron ore, zinc and coal are plunging, that they're investing in genetics and other strategies to expand herds. The beef shortage arose because drought in North America cut into production just as world-wide demand for protein is growing. The new line hardly produces revenue to rival the minerals production, but for even the big miners it provides cash to spend.

QUOTABLE

IN OTHER NEWS

South Korea's STX Offshore & Shipbuilding Co. will be put under court receivership despite years of financial aid. (WSJ)

Sales of newly-built homes rose at the fastest pace in more than eight years in April while prices jumped. (WSJ)

Germany's economic growth accelerated to 0.7% in the first quarter. (WSJ)

Best Buy Co. sales slipped 0.1% in its first quarter, although sales of wearable electronics and appliances expanded sharply. (WSJ)

Coca-Cola Enterprises Inc. shareholders approved the company's proposed bottling merger to create the largest independent Coke bottler world-wide. (WSJ)

Autonomous-vehicle startup nuTonomy raised $16 million in new funding to add to its earlier backing by Ford Motor Co. Chairman Bill Ford. (WSJ)

Hyundai Motor Co. plans to build an electric car by 2018 that has at least 200 miles of range. (WSJ)

Strikes in France over labor reform triggered a transportation meltdown as workers blocked oil refineries and fuel pumps ran dry. (The Telegraph)

Creditors of struggling South Korean shipping line Hyundai Merchant Marine Co Ltd. agreed to a $570.27 million debt-for-equity swap. (Reuters)

South Korea's Hanjin Shipping Co. Ltd. is past due on $11.6 million in payments owed to Seaspan Corp., the ship owner says. (The Loadstar)

The American Trucking Associations truck tonnage index fell 2.1% month-to-month in April after a 4.4% decline in March. (Transport Topics)

Adidas AG, which moved its manufacturing to Asia 20 years ago, will start producing shoes using robots at a plant in southern Germany. (Agence France-Presse)

Ohio granted Amazon.com Inc. a $270,000 tax break over six years to operate a distribution center between Cleveland and Akron. (Akron Beacon-Journal)

Cocoa, Fla., is offering Wal-Mart Stores Inc. $2.92 million in incentives, including $2 million in cash, to choose the city for a regional distribution center. (Florida Today)

Malaysia plans to add air cargo and other facilities around Kuala Lumpur International Airport to draw logistics business. (Straits Times)

Crowley Maritime will spend $21 million to expand its Isla Grande freight terminal in Puerto Rico. (Handy Shipping Guide)

Swiss watch exports declined 11.1% in April. (The Standard)

Zappos.com Inc. will start shipping shoes in boxes that consumers can convert to other uses. (Adweek)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @lorettachao, @RWhelanWSJ and @EEPhillips_WSJ, and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

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(END) Dow Jones Newswires

May 25, 2016 06:48 ET (10:48 GMT)

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