Today's Top Supply Chain and Logistics News From WSJ
March 16 2017 - 7:15AM
Dow Jones News
By Paul Page
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Amazon.com Inc. is looking more than ever like an international
freight forwarder. The retail giant plans to expand its third-party
logistics business to include air cargo shipping for its customers
in China, the WSJ's Laura Stevens and Erica E. Phillips report,
putting the company in more direct competition with international
parcel operators for shipments that typically carry premium prices.
What the company calls Amazon Logistics+ service adds a critical
expedited transport piece to the expansive marketplace and
distribution services Amazon is offering to operators in Asia,
bringing the kind of range of shipping options typically provided
by established third-party players. Amazon's stake in Atlas Air
Worldwide Holdings Inc. may give it the capacity to operate its own
planes, but the complications and costs of cross-border flights
likely mean shipments at first will travel on other airlines. Over
time, however, it's hard to imagine that Amazon will be satisfied
having its service following the schedules of other carriers.
Fast-fashion trend-setter Zara thinks it can focus on both
bricks and clicks. With the opening of a five-story behemoth of a
flagship store in its Spanish hometown of La Coruña, Spain, the
company is demonstrating its commitment to brick-and-mortar retail
outlets even as it expands its online efforts, the WSJ's Patricia
Kowsmann writes. Zara, an icon of supply-chain efficiency, is
giving up on smaller storefronts, providing its own spin on an
omni-channel strategy to meet changing shopping patterns. Zara's
push to have fewer but bigger stores, backed by its signature
rapid-fire production system that lets it replenish its stores more
quickly than rivals, is aimed at setting itself apart in an
industry struggling to identify the right brick-and-mortar
strategy. Analysts say Inditex's shifting structure leaves space
for the online platform to expand without cannibalizing the
physical shops, which the company hopes will give it the best of
both worlds.
Mexican regulators say the country's shippers are suffering from
the lack of rail competition. The Federal Competition Commission
says in a new report that Grupo Mexico SAB and the Mexican unit of
Kansas City Southern are heavily inflating prices to make
connections while restricting access to their lines, the WSJ's
Anthony Harrup reports. Mexico is a key revenue generator for KCS,
which reaches deep into the country through its own lines and
through pacts with the Grupo Mexico-operated Ferromex and Ferrosur
railways. It's a critical connection for businesses that operate
beyond the area around the U.S.-Mexico border dominated by trucks,
but the anti-trust regulator says the carriers are abusing their
tight grip on the market. Switching railcars to locomotives of the
other company can take up to a week, the agency says, and the
tariff for shipments on a connecting line averages 8.3 times the
tariff on the original line.
TRANSPORTATION
Asia's Lunar New Year holiday showed up at U.S. seaports last
month, although it hardly caused a celebration. China's exporting
slowdown during the annual break dragged down inbound volumes at
major gateways from Southern California to Virginia, WSJ Logistics
Report's Erica E. Phillips writes, in what ports hope is a pause
before a renewed shipping surge. California's ports of Los Angeles
and Long Beach, together the largest U.S. hub for ocean-container
shipping, reported a 17.9% year-over-year decline in imported
container volume last month. The downturn, which also hit the ports
of Virginia and Oakland, came as China exports fell last month
during the weeks-long pause in factory production during the
holiday. The Global Port Tracker projects a strong rebound to
double-digit growth starting this month, but it's unclear so far
whether the consumer demand this spring will give retailers enough
confidence to refill their distribution channels.
QUOTABLE
IN OTHER NEWS
The Federal Reserve will raise the benchmark federal funds rate
a quarter percentage point and signaled two more rate increases are
coming this year. (WSJ)
Wal-Mart Stores Inc.'s Mexico unit will increase capital
spending by a fifth this year, including investments in logistics
and online commerce. (WSJ)
A bankruptcy judge tentatively approved the $3.8 million sale of
the dormant Desert Line railroad, which connects southern
California to a manufacturing-rich region of northern Mexico.
(WSJ)
U.S. retail sales i nched up 0.1% in February, slowing from 0.6%
growth the month before. (WSJ)
U.S. consumer prices rose 0.1% in February despite a 1%
month-to-month drop in energy prices. (WSJ)
Australia is threatening to restrict natural-gas exports after
producers chasing higher prices in foreign markets have left the
country with a domestic shortage. (WSJ)
A food-technology startup says it has successfully developed the
world's first chicken strip grown in a lab from self-reproducing
cells. (WSJ)
New permit documents show Amazon plans an "AmazonFresh Pickup"
operation as the next phase in its physical retail initiatives.
(GeekWire)
Industrial parts supplier W.W. Grainger Inc. says 60% of its
sales came through online channels last year. (Industrial
Distribution)
Golden Ocean Group, led by Norwegian ship magnate John
Fredriksen, bought Greek bulk carrier Quintana Shipping's 14-vessel
bulker fleet for $364 million. (Splash 24/7)
Cathay Pacific Airways' first annual loss in eight years came as
cargo revenue fell 13.2% and cargo yield dropped 16.3%. (South
China Morning Post)
Kuwait-based logistics provider Agility expanded its net profit
9.7% in the fourth quarter to $51.3 million. (Trade Arabia)
United Parcel Service Inc. will spend $90 million to add more
vehicles that run on natural gas and add fueling stations.
(American Shipper)
Automotive parts maker Gestamp, which operates 98 factories
world-wide, will have a public share offering on Spain's stock
exchange. (Automotive Logistics)
Samsung Heavy Industries Co. says a new vessel being delivered
to Mitsui O.S.K. Lines has a record capacity of 20,150 containers.
(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, @jensmithWSJ 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
March 16, 2017 07:00 ET (11:00 GMT)
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