By Paul Page 

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Santa Claus's distribution network is under strain. United Parcel Service Inc. and FedEx Corp. are scrambling to keep up with holiday shipping volumes that have blown past expectations, WSJ Logistics Report's Erica E. Phillips and Jennifer Smith write, delaying delivery of online orders. Analysts say on-time delivery rates for the parcel carriers have been down slightly in the weeks since Thanksgiving even as the companies add workers at sorting hubs, extend delivery windows and suspend on-time guarantees. The holiday performance has come under greater scrutiny since carriers had a rough time moving goods a couple of years ago, a sign of the difficulty operators have in planning for online sales demand. Despite the stress, the big shipping volumes are an upbeat signal for retail demand that adds to signs of broader economic growth in the fourth quarter. Trucking companies are reporting stronger shipping volumes since Thanksgiving, suggesting a late-year surge fueled by greater consumer and business confidence. Right now, that's helping build e-commerce package volume, but operators hope it also fuels momentum for the start of the New Year.

Maersk Line is thinking well beyond the box as it maps out its container shipping strategy. The shipping unit of A.P. Moller-Maersk A/S wants to tie together its transport and logistics business to sell the kind of broader end-to-end distribution services of companies like UPS and FedEx, the WSJ's Costas Paris and Dominic Chopping report. At an investor meeting, Maersk chief executive Soren Skou outlined an ambitious vision in which the world's biggest container shipping line grows even bigger and becomes an integral part of the supply chains of its customers. It's a bid to move farther away from the shipping world's commoditized industrial service that Maersk executives believe has helped drag down ocean pricing. In practical terms, it will mean moving more goods through cargo terminals run by its sister company APM Terminals and tying in more closely with its logistics unit, Damco. Over time, however, Maersk may look to grow as much on the land as it has on the water.

Supply chains are moving into overdrive to combat a global shortage that's hitting parents and children hard: a scarcity of Hatchimals. The furry, walking, talking toy birds that hatch from a shell are one of the big sensations of the season, the WSJ's Kathy Chu reports, and Canada's Spin Master Corp. is scrambling to get Chinese factories to ramp up production. The toy's sudden popularity is one of those crazes for quirky items that can pop up around the holidays, and it's taken on a world-wide dimension thanks to e-commerce, social media and the global nature of distribution. Because the craze spread most quickly in the U.S., Canada and the U.K., consumers elsewhere have found the toys weeks after they sold out elsewhere -- creating a global market led by opportunistic sellers. The manufacturer, meantime, has been shipping the toys by air, spending far more than ocean transport to get its Hatchimals in place before the market cracks.

SUPPLY CHAIN STRATEGIES

A New Jersey delivery firm says it's found new life after a troubled retail delivery contract helped push the business into bankruptcy. A judge ruled that EZ Worldwide Express can put a debt-payment plan into motion and emerge from bankruptcy protection after downsizing operations, the WSJ's Katy Stech reports, including the big business the company did for fast-fashion retailer Forever 21 Inc. To EZ Worldwide, that pact highlighted the contradictions that can come with big shipper-supplier contracts: the deal helped EZ Worldwide expand rapidly, but it also provided more than half the company's revenue and left the business heavily exposed when Forever 21's shipping "declined precipitously." EZ Worldwide has focused on spreading its business around to more retailers, and now has a deal with Amazon.com Inc. that the company says carries "tremendous growth prospects."

QUOTABLE

IN OTHER NEWS

A bankruptcy judge ordered Hanjin Shipping Co. to disclose all its U.S. assets and money it may have taken out of the country. (WSJ)

Senate Majority Leader Mitch McConnell says he doesn't want Donald Trump to propose a "trillion-dollar stimulus" plan for infrastructure. (MarketWatch)

FedEx CEO Fred Smith warned in a speech of "massive economic repercussions" if the U.S. follows protectionist policies Mr. Trump has espoused. (Memphis Commercial Appeal)

Sustainability ranking firm EcoVadis secured more than $30 million in venture funding. (WSJ)

North Dakota's crude-oil production in October rose to a five-month high. (WSJ)

With the Trans-Pacific Partnership in tatters, Republican Sen. Rob Portman says the U.S. should consider separate trade deals with China and Japan. (WSJ)

European Union nations agreed to allow higher tariffs on cheap imports of some raw materials, an effort largely aimed at commodities from China. (WSJ)

China's industrial output accelerated to 6.2% in November and retail sales surged 10.8%, keeping the economy on course to hit the government's annual growth target. (WSJ)

Alphabet Inc. is spinning off its driverless-car technology research group into a full business unit called Waymo. (WSJ)

3M Co. expects higher sales growth in 2017 as it benefits from Mr. Trump's plans to boost infrastructure and rejuvenate U.S. manufacturing. (WSJ)

Japan's Asahi Group Holdings Ltd. will buy brewing assets in five Eastern European nations from Anheuser-Busch InBev NV for $7.8 billion. (WSJ)

Luxury retailer Neiman Marcus Group Ltd.'s quarterly loss more than doubled on declining same-store sales. (WSJ)

Brazil's retail sales contracted 0.8% from September to October and 8.2% from a year ago. (Rio Times)

Moody's Investors Service set a negative outlook for the global shipping industry in 2017. (American Shipper)

Genesee and Wyoming Inc. will buy British port services provider Penalver Transport and issue new stock to pay for the $110 million purchase. (The Hour)

Japan's 'K' Line is threatening to suspend vehicle transshipment operations at Sri Lanka's Hambantota port after striking dock workers prevented a ship from sailing. (IHS Fairplay)

Hudson's Bay Co. is extending its use of robotics after calling rollout of the technology at a Toronto distribution center "a giant leap forward." (Chain Store Age)

British online fashion retailer ASOS Plc plans to double U.K. manufacturing because of the pound's post-Brexit plunge. (Bloomberg)

Drivers at a distribution center run by British logistics operator Wincanton plan a walkout next week over a pay dispute. (Logistics Manager)

Amazon's new license to deliver alcohol in Scotland is drawing criticism. (The Courier)

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, @smithjenBK 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

December 14, 2016 06:59 ET (11:59 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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