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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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