Today's Top Supply Chain and Logistics News From WSJ
July 27 2016 - 6:52AM
Dow Jones News
By Paul Page
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Apple Inc.'s supply chains are slimming down. The trend-setting
electronics giant says sales of its signature iPhone and iPad
products fell in its fiscal third quarter, declines that will
reverberate across Asia-based distribution channels built around
the manufacturing of smartphones and tablets. Apple's profit fell
27% in the quarter, the WSJ's Daisuke Wakabayashi reports, and
overall revenue declined 14.6% as the company grappled with the
first prolonged slump in iPhone sales since the product was
introduced in 2007. With sales of the iPhones down nearly 15%
year-over-year and iPad sales off 9%, Apple is making adjustments:
Chief Executive Tim Cook said in an interview the company reduced
inventory of the iPhone by more than four million units in its
retail channels. Apple is forecasting better sales and margins in
the fall quarter, but some of that may come from improving services
revenue that won't feed into manufacturing and shipping.
Shipping companies may not get the help they're looking for from
retailers after all. The National Retail Federation's new
assessment of 2016 is more upbeat than it had been, but the
retailer group says the big growth in the consumer market has
likely already come and gone. The direction of the retail market
remains a critical question for shipping lines, trucking companies
and railroads as they look for stores to restock inventories and
push more goods through their supply chains ahead of the holiday
season. The NRF says it now forecasts U.S. retail sales rising 3.4%
this year, up from an initial forecast of 3.1%, the WSJ's Paul
Ziobro reports, thanks to a stronger start to the year and a
continuing shift to online sales. NRF projects a slower growth rate
over the coming months and into the critical holiday season, saying
lackluster wage growth, deflation and uncertainty around the
presidential election are weighing on business.
Private-equity firm Wind Point Partners has its eyes on
consolidating parts of the logistics business tied to container
shipping. The Chicago-based investment group is structuring its
newly-acquired St. George Logistics business as a holding company,
WSJ Logistics Report's Loretta Chao writes, and says its first
logistics acquisition should be a platform for more purchases. The
target, says Wind Point principal Konrad Salaber, will be warehouse
operations in the Northeast and upper Midwest to complement St.
George's existing network of 15 container freight stations and
partnerships across other logistics facilities. Wind Point is
buying into the business at a period of deeply depressed container
shipping rates, but the firm is expecting prices to increase and
returns for companies in the field to improve.
ECONOMY & TRADE
Caterpillar Inc., a bellwether for the world-wide construction
industry, isn't looking for a turnaround before next year. The
construction and mining giant reported another sharp decline in
sales in its second quarter and scaled back its outlook for this
year, saying it sees no end to the four-year-long slide in sales
from falling oil and commodities prices and lower foreign demand.
The WSJ's Bob Tita reports that Caterpillar is being hurt by more
than anemic economic growth. The company says geopolitical events
that undermine customer confidence such as the Brexit referendum in
Britain, the hostile rhetoric from the U.S. presidential campaign
and the attempted coup in Turkey are holding down global machinery
demand. The company's machinery and engine sales dropped 17% from a
year ago, a troubling sign that will echo beyond Caterpillar's own
business since it suggests that the appetite for bigger projects
around the world remains weak.
QUOTABLE
IN OTHER NEWS
U.S. sales of new single-family homes rose 10.1% in the first
six months of the year in the U.S. (WSJ)
Oil prices sank to a fresh three-month low as a supply glut
keeps weighing on the market. (WSJ)
Air France-KLM SA said geopolitical and economic uncertainties
that are depressing revenue would more than wipe out savings from
lower fuel costs. (WSJ)
U.K. economic growth accelerated in the second quarter, growing
at a 2.4% annual rate ahead of the Brexit referendum. (WSJ)
3M Co. trimmed its sales outlook after reporting falling sales
in its struggling electronics and energy business. (WSJ)
China's Huawei Technologies Co. is confident it will reach its
target to ship 140 million smartphones in 2016, up 30% from last
year. (WSJ)
Sporting goods retailer Under Armour Inc. will start selling a
new casual-wear line and expand its sales to midtier department
stores. (WSJ)
The U.K. government gave Amazon.com Inc. greater freedom to test
drone deliveries in the country. (The Telegraph)
The U.S. and Mexico will implement a new air services agreement
on Aug. 21 that will allow for greater freedom for cargo flights.
(Air Cargo World)
Korean shipbuilder Hyundai Heavy Industries Co. Ltd. swung to
its biggest net profit in three years amid reduced costs and gains
in non-shipbuilding business. (Korea Herald)
China's online retail sales will grow at a 24.6% annual rate
over the next three years, according to a Jefferies Group analysis.
(South China Morning Post)
A survey shows a large majority of retailers have been
frustrated at aligning mobile e-commerce strategy with supply chain
operations. (Sourcing Journal)
Smaller online merchants got fewer visitors and sales during
this year's Amazon Prime Day than during the promotion last year.
(Charleston Post and Courier)
Indian e-commerce firm Flipkart is buying domestic online
fashion retailer Jabong for $70 million in cash. (Reuters)
Mediterranean Shipping Co. joined CMA CGM SA as an investor and
board member of French start-up container monitoring company
Traxens. (The Loadstar)
Logistics technology provider Freightos launched an online
marketplace for international freight rates. (American Shipper)
Freight broker Scott Logistics Corp. bought Louisiana-based Apex
Freight Services. (Transport Topics)
The first ship carrying liquefied natural gas passed through the
newly expanded Panama Canal. (Port Technology)
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.
Subscribe to this email newsletter by clicking here:
http://on.wsj.com/Logisticsnewsletter .
Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
July 27, 2016 06:37 ET (10:37 GMT)
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