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By Paul Page 

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Big store owners have made their choice of one delivery agent for the holidays: consumers. Retailers including Wal-Mart Stores Inc. and Target Corp. are investing heavily to make it easier for shoppers to pick up their online orders in stores, the WSJ's Sarah Nassauer and Khadeeja Safdar report. The in-store pickup plan is aimed at smoothing pain points for retailers and their customers and trying to turn the brick-and-mortar business into an advantage over Amazon.com Inc. and its expansive online marketplace and delivery operations. Among the changes: Wal-Mart will make products available for same-day store pickup, put more staff at pickup counters and stock the inventory closer to workers. Managing inventory for both online and store sales has been a major problem for retailers, and this holiday season will provide a big test of whether the sellers can get the mix right. PwC says its survey of consumers showed about 21% of Americans use in-store pickup regularly and 48% say they use it "on occasion."

Shipping & Transit LLC has taken in millions of dollars through shipment tracking over several years yet hasn't shipped or tracked much of anything. The business based at a home in Boynton Beach, Fla., has used its claim that it invented the idea of tracking and notification to become the country's biggest filer of patent lawsuits, raking in big money by going after small companies that try to tell their customers where their packages are going. Shipping & Transit doesn't sell tracking systems, or anything else, the WSJ's Ruth Simon and Loretta Chao report. Instead, it claims licensing fees when companies provide "status messages for cargo, shipments and people," and the company or its predecessor has sued dozens of major retailers and big delivery operators. Most of its targets are small, and at a few thousand dollars the fees generally are less costly than litigation. But startups say the legal challenge can be crushing for would-be entrepreneurs.

United Parcel Service Inc. is placing a big bet on growth in shipping demand. The parcel delivery giant issued an upbeat forecast for record holiday shipments, the WSJ's Mike Esterl and Doug Cameron report, and says it expects strong expansion in e-commerce demand in the U.S. and robust growth in Asia and Europe. UPS is backing up its bullish outlook by buying 14 Boeing Co. 747-8 freighters, the company's first aircraft order since 2008. The deal pushes UPS more deeply into jumbo-jet operations at a time when international shipping demand has been soft for many companies and populist anti-trade currents seem to present new barriers to global goods movement. The company is pressing lawmakers to support new trade agreements that are drawing scorn in the presidential campaign but would bring new freight volume for its new, bigger planes. In the meantime, UPS says cross-border e-commerce is surging six times faster than the broader economy, growth that helped the company show big gains across its business lines in the third quarter.

TRANSPORTATION

Amazon.com Inc.'s investment in logistics is coming at a heavy price. The e-commerce giant's profit came in sharply below expectations, and far behind its second-quarter earnings as the costs from opening new warehouses and slashing delivery times soared. Shipping costs were up 43% year-over-year to $3.9 billion, well ahead of the 29% growth in sales, the WSJ's Laura Stevens reports, and the company is predicting more of the same as it builds out its own logistics network. Amazon has opened 23 warehouses world-wide since July, after opening just three in the first half of the year. The company has been expanding that network, including investment in air cargo and trucking operations that it will control, as it pushes to expand its high-yield, service-intensive Prime membership program for consumers. As the membership grows, Amazon is getting more items delivered in as fast as an hour.

Hanjin Shipping Co.'s troubled business may be nearing an end. Hyundai Merchant Marine Co. is bidding for the bankrupt carrier's Asia-U.S. route assets as the dismantling of one of the world's biggest container shipping lines picks up speed, the WSJ's In-Soo Nam reports. The new submission from what had been Hanjin's smaller South Korean rival will give HMM a chance to carry out a weeklong due diligence of what's left of Hanjin's assets, which could lead to a final takeover proposal as soon as next week. Some of Hanjin's former cargo vessels are starting move into other fleets as the shipping industry and financial groups begin to seek equilibrium after the turmoil triggered by the carrier's late-summer move into receivership. Germany's HSH Nordbank is taking control of six of the biggest vessels Hanjin had used and chartering them to Maersk Line. The bank is part of a syndicate that also plans to charter three container ships to Mediterranean Shipping Co., with delivery slated for December.

China's ZTO Express Inc. had a rough first day as a publicly-traded company. The delivery giant raised $1.4 billion in the largest U.S. initial public offering this year, the WSJ's Alec Macfarlane reports, but shares in the business nosedived 15% from the offering price of $19.50. Founded in 2009, ZTO operates a fleet of more than 3,300 trucks and counts Chinese e-commerce giants Alibaba Group Holding Ltd. and JD.com Inc. as customers. For investors, ZTO provides a new way to bank on expected growth in China's burgeoning e-commerce industry. Backers of the IPO say ZTO plans to use most of the proceeds to buy land and equipment and to build facilities to expand its sorting capacity. Private-equity firm Warburg Pincus, which holds a 6.2% stake in the business, says ZTO has a strong foothold in a fragmented Chinese express delivery market. ZTO's faltering debut on the New York Stock Exchange, however, signals investors have grown cautious about how quickly and profitably China's delivery companies will grow.

QUOTABLE

IN OTHER NEWS

The shipping industry's global regulator agreed to begin imposing strict new limits on sulfur emissions from vessels starting in 2020. (WSJ)

XPO Logistics Inc. sold the truckload business it acquired through Con-way Inc. to Canadian trucker TransForce Inc. for $558 million. (WSJ)

The European Union and Canada reached an expansive trade agreement, the first such pact the EU has negotiated with another major industrialized economy. (WSJ)

Demand for long-lasting manufactured goods slipped slightly in September. (WSJ)

The French government is struggling to dismantle a migrant camp in Calais that has disrupted freight and passenger traffic across the English Channel. (WSJ)

Nissan Motor Co. is displaying strong confidence in U.K. manufacturing with a decision to make new sport-utility models at its plant in northern England. (WSJ)

ValuePart Inc., which distributes parts for earth-moving equipment through an extensive network of North American warehouses, filed for bankruptcy protection. (WSJ)

General Electric Co. will pay $599 million for a controlling stake in Concept Laser GmbH. (WSJ)

Qualcomm Inc. is buying NXP Semiconductors NV for $39 billion, adding a top supplier of automotive chips to its business. (WSJ)

Potash Corp. of Saskatchewan Inc.'s third-quarter profit and sales tumbled as an ongoing slump in prices outweighed a pickup in volumes. (WSJ)

British drugmaker GlaxoSmithKline Pharmaceuticals Ltd. is drawing up contingency plans to secure its supply chain after the U.K. leaves the European Union. (Financial Times)

Austrian steelmaker Voestalpine opened a $740 million plant in Corpus Christi, Texas, to supply materials throughout North America. (Platts)

Boeing Co. expects global air cargo traffic to grow at a 4.2% average annual rate over the next 20 years. (Industry Week)

Georgia-based Less-than-truckload carrier Saia Inc. will add northeast U.S. service as a step toward national coverage. (DC Velocity)

Macy's Inc. faces hurdles in working with suppliers and distributors to meet its goal of placing RFID tags on all its merchandise by next year. (Supply Chain Dive)

The U.S. Maritime Administration awarded $4.85 million in grants for initiatives to transport containerized freight on rivers. (American Shipper)

Retailer Sports World Chicago halted online orders for Chicago Cubs gear because it can't keep up with the overwhelming demand. (Internet Retailer)

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 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

October 28, 2016 06:30 ET (10:30 GMT)

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