MRK Merck and Co Inc

By Paul Page 

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The world-wide cyberattacks that have plagued corporations are hitting the shipping business in a big way. Container shipping giant Maersk Line was among a raft of global companies and institutions that were crippled by a virus similar to last month's ransomware attack, with operations around the world rocked by the hack. APM Terminals, another unit of A.P. Moeller-Maersk A/S, halted handling at several ports, including New York-New Jersey. The WSJ's James Marson, David Gauthier-Villars and Michael Amon report other corporate victims of the Petya attack include pharmaceutical giant Merck & Co. and Russian oil company PAO Rosneft, and TNT Express, the European operating unit of FedEx Corp., was also affected. The biggest impact may have been on Ukrainian state institutions, but for a broad array of businesses the attack on Maersk marked an alarming sign of the vulnerability of supply chains to hacking. Maersk carries an outsize share of global trade on its ships, leaving the potential financial pain from the hack to reach companies far beyond the vessels themselves.

Buying more tankers in an oversupplied market may seem foolhardy to some, but shipping magnate John Fredriksen is used to sailing against prevailing business currents. The self-made billionaire, leader of tanker operator Frontline Ltd. and head of a troubled offshore-drilling company tells the WSJ's Costas Paris that he's still looking to expand his fleet even after two unsuccessful takeover attempts of rival tanker firms. Mr. Fredriksen says he has some $2 billion targeted for acquisitions, and is looking for the biggest of tankers -- very large crude carriers, or VLCCs. His reasoning: shipping companies will scrap three times as many tankers this year than they did last year, with fewer new vessels coming to market, placing a bigger premium on capacity. He's moving in a depressed tanker market, but analysts note the shipping veteran has always had strong timing. And he's trying to consolidate in a business that so far has averted the sort of consolidation that has marked the container shipping trade.

Takata Corp. may be going under, but the company isn't exactly going away. The company's bankruptcy filing this week sets the stage for the dissolution of the eight-decade-old auto-parts maker, although the WSJ's Sean McLain and Mike Spector write that the business could limp on for several years supplying parts for the approximately 54 million defective air bags that still need to be replaced in the U.S. alone. The unprecedented recall affects roughly 16% of the 260 million vehicles now on American roads. Takata is trying to get support from major car makers to support efforts to save the auto-components business, and in the meantime expects to sell itself to Key Safety Systems Inc. for $1.6 billion. That's far less than Takata owes to car makers that have been recalling vehicles, and it will leave new leadership to manage the logistics behind the biggest and most complicated recall the auto industry has faced.

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Blue Apron Inc. is hoping to sell investors on its initial public offering, but the meal-kit maker's biggest challenge may be finding customers. Company financial statements show that gaining and retaining buyers of its home-delivery service is getting harder and more expensive, the WSJ's Eliot Brown reports, highlighting the tough economics behind many e-commerce startups. To live up to its targeted $3 billion valuation, Blue Apron must replace a large share of customers who quit after trying its food and lure ever more people through ads and free offers. That's sent marketing costs as a share of revenue soaring, pressing the business to keep down spending in other areas while meeting its high logistics demands. The reality for such startups is that the vast majority of U.S. shopping still takes place in brick-and-mortar stores, and customers of online startups can easily jump from one app to another, making it difficult for a company to sustain growth.

United Parcel Service Inc. is taking bigger actions to pare its growing pension burden. The package carrier plans to freeze pension plans for about 70,000 nonunion employees, the WSJ's Paul Ziobro and Vipal Monga report, seeking to corral a retirement fund with a nearly $10 billion deficit. The company closed the pension plan to new hires last year and offered buyouts to former workers, joining major U.S. corporations looking to rein back a collective deficit in the S&P 1500 pension plans that totaled $408 billion last year. The deficits have persisted even as those firms contributed more than $550 billion combined into the plans from 2008 to 2016, pressing companies to look for more ways to stem the bleeding. The concern has been growing at UPS, and remains a major issue in other segments of the freight business. The Central States Pension Fund covering retired unionized truck drivers has assets of barely half of its obligations, and faces insolvency within the next decade.

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IN OTHER NEWS

Puerto Rico is shopping private stakes in seaports, airports and other infrastructure, hoping to use private-public partnerships to help the troubled U.S. territory's finances. (WSJ)

The International Monetary Fund cut its forecast for the U.S. economy, saying it could no longer assume tax cuts and higher infrastructure spending. (WSJ)

The Mexican peso rose to its highest level in more than a year against the dollar. (WSJ)

U.S. home-price growth slowed in April for the first time in months. (WSJ)

The Trump administration added a new layer of duties on imports of Canadian lumber while saying it still hopes to negotiate a settlement. (WSJ)

Western Digital Corp. submitted to Toshiba Corp. a new proposal to buy their joint-venture chip business in partnership with private equity company KKR & Co. (WSJ)

Industrial parts giant W.W. Grainger Inc. expects online sales to account for 80% of the company's business within five years. (Industrial Distribution)

Auto-parts startup Pearl Automation, launched by former Apple Inc. engineers with $50 million in venture funding, shut down after three years. (Axios)

Greek shipowners voted to voluntarily pay double tonnage taxes for another year to help the country's struggling economy. (Lloyd's List)

Singamas Container Holdings expects to swing to a first-half profit on growing demand for its shipping containers. (Seatrade Maritime)

Chinese container makers are retooling factories to switch to a new, more environmentally-friendly paint. (Bloomberg)

Growth in the Port of New York and Jersey's loaded import container volume slowed to 4.8% in May, down from 14% in April. (American Shipper)

German discount grocer Lidl will build a fourth U.S. distribution center, about 45 miles northwest of Atlanta, as it adds more stores to its U.S. expansion. (Chain Store Age)

Grocer Kroger Co. will get a $2.1 million grant from Michigan to build a distribution center north of Detroit. (Crain's Detroit Business)

UPS expects to expand its use of alternative fuels from 19.6% to 40% by 2025. (Air Cargo World)

Growth in freight volume within China accelerated to 9.9% in May. (Xinhua)

Veteran public relations executive Heath Hall was named deputy director of the Federal Railroad Administration. (Progressive Railroading)

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. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Write to Paul Page at paul.page@wsj.com

(END) Dow Jones Newswires

June 28, 2017 07:09 ET (11:09 GMT)

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