AMZN Amazon.com Inc

By Paul Page 

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The logistics industry may be wondering just how high Amazon.com Inc. wants to fly. The e-commerce giant is tying up with Atlas Air Worldwide Holdings Inc. to lease 20 Boeing Co. 767 freighters, the WSJ's Joshua Jamerson reports , Amazon's second big deal this year for airfreight capacity. With the earlier pact with Air Transport Services Group for 20 767 cargo planes, Amazon will soon control a fleet of 40 freighters in the U.S. and have significant stakes in both air carriers if it picks up the warrants for stock purchases that come with the jet-lease agreements. The e-tailer's moves could be a boon to operators that have been laboring through a decade of stagnation in the air cargo business, and Amazon's impact could grow if its ambitions extend beyond ferrying its own goods around North America. That's because Amazon may hold enough air capacity to offer competition to parcel carriers FedEx Corp, and United Parcel Service Inc., particularly if the company bundles its distribution operation more tightly with the third-party sales services it offers small retailers.

In era of increasingly rapid goods delivery, Alibaba Group Holding Ltd. is telling investors that they'll have to wait. The e-commerce giant reported an 85% jump in quarterly profit in its fourth quarter on a 39% boost in revenue. But the WSJ's Alyssa Abkowitz reports the growth was behind expectations after a series of high-profile acquisitions aimed at expanding the company's reach. Vice Chairman Joe Tsai is urging patience as Alibaba builds up its Taobao and Tmall marketplaces while investments in cloud computing and Southeast Asian e-commerce startup Lazada Group start to pay off. The market isn't standing still, however: JD.com Inc. has been eating into Alibaba's market share, with faster revenue growth for the past six quarters. Alibaba is expanding in rural China, so the competition in its back yard will be over which company can deliver the goods the fastest while the company is waiting for investments abroad to pay off.

Ports on the U.S. West Coast can only hope shipping this spring isn't a preview of what they'll see after the expanded Panama Canal opens. Ports from Seattle to Long Beach saw their smallest share of U.S. container imports in March than at any point since last winter's labor strife, WSJ Logistics Report's Erica E. Phillips writes. The dropoff was steep, with West Coast ports handling just 43.6% of imported goods, down from about 50% in recent months. The analysis by trade economist Jock O'Connell of Beacon suggests the ports were hit hard by falling trade with China, as well as sluggish global growth and persistent high inventories among U.S. retailers. The figures are only one month's result, but the report could have bigger implications if the trend holds, suggesting a shift in some global trade patterns that could speed up investment in distribution channels tied more closely to the Gulf and East coasts.

SUPPLY CHAIN STRATEGIES

Transportation-world needs are helping growth in one of the few raw materials to defy the global commodities rout. The price of lithium carbonate equivalent shot up to as high as $20,000 per ton, more than triple its price some 18 months ago, pressing more mining of a product nicknamed "white petroleum," the WSJ's Stephanie Yang and Biman Mukherji report. China is a big driver of the surge because the country is turning to lithium batteries to power its transportation sector. Lithium-ion batteries are at the heart of electric vehicles, which are grabbing a larger share of auto sales every year, and one expert expects total lithium demand will increase 500% by 2020. Getting the battery-grade material is a logistical challenge, however, since it is found in remote locations. And the growing reliance on lithium will pressure the airfreight industry so solve safety problems connected with handling batteries.

QUOTABLE

IN OTHER NEWS

Chinese conglomerate HNA Group is in advanced discussions to take control of Singapore-listed logistics company CWT Ltd. (WSJ)

Eurozone retail sales fell in March for the first time in five months. (WSJ)

Retail sales in the U.K. plunged 6.1% in April. (WSJ)

General Motors Co.'s sales in China rose 7.5% in April over a year ago, while Ford Motor Co. reported an 11% drop in deliveries. (WSJ)

Apple Inc. is asking India's government to allow the company to refurbish and sell secondhand iPhones there. (WSJ)

Archer Daniels Midland Co. reported a 53% drop in quarterly profit after U.S. exports declined amid cheap overseas alternatives and a glut in the agricultural commodities. (WSJ)

GM and Lyft Inc. are working together to start tests within a year of a fleet of self-driving electric taxis on public roads. (WSJ)

Metals-market companies are bracing for changes that Tesla Motors Inc.'s push into the automobile industry will cause in metals supply chains. (WSJ)

Oculus recruited Hans Hartmann from Fitbit Inc. as chief operating officer as the tech electronics company tries to repair supply chain and logistics problems. (TechCrunch)

GM plans to resume operations Monday at four North American plants where assembly was halted after supply-chain interruptions caused by Japan's earthquakes. (manufacturing.net)

Some shipping industry figures want the business to set global curbs on carbon emissions before countries or regional blocs take action. (Reuters)

Georgia's Port of Savannah will offer to weigh containers for free to help shippers comply with a new verification requirement. (American Shipper)

Automobile shipping companies filed a class-action complaint at the Federal Maritime Commission alleging price-fixing and collusion by major ocean car carriers. (Splash 24/7)

Japan's tuna imports are waning as young diners favor beef over sushi. (Financial Times)

Net profit at forwarder Expeditors International of Washington Inc. declined 9.6% in the first quarter as customers showed caution "about how to spend their logistics dollar." (The Loadstar)

Matson Inc. Chief Executive Matt Cox says market conditions in China are still deteriorating after the shipping line saw a steep first-quarter profit decline. (Honolulu Star-Advertiser)

E-commerce software provider Shopify Inc. nearly doubled first-quarter revenue over last year and increased the number of retail customers by 70%. (Internet Retailer)

Daily sales at industrial distributor Fastenal expanded 3.8% in April over the same month last year. (Industrial Distribution)

The Pacific Northwest cherry crop, which fuels big shipping from the region, is projected to grow strongly this year. (FruitNet)

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

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