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A wave of blockbuster payouts over highway accidents is starting to take a big toll on the trucking industry. The awards alone carry heavy costs, but the bigger impact has come as companies have pulled out of the business of insuring truck fleets, leaving carriers scrambling for coverage. WSJ Logistics Report's Brian Baskin writes that rising premiums are hitting as uncertainty over accident costs is growing. Carriers are facing more "nuclear" verdicts, where juries award tens or even hundreds of millions of dollars, with the 2014 Wal-Mart Stores Inc. fatal truck crash that injured comedian Tracy Morgan considered a watershed moment that opened the litigation floodgates. Zurich Insurance Group AG and American International Group Inc. have since pulled out of the business of insuring for-hire trucks. Some companies are pointing in their earnings reports to rising insurance and accident costs, and for them the concerns are growing at an odd time: the number of people killed in accidents involving large trucks fell 20% in the last decade, yet the costs of those accidents have never been higher.

The fallout from the Hanjin Shipping Co. bankruptcy is crashing business at U.S. West Coast ports. Early reports from California gateways show import volumes sank last month as Hanjin's ships were stranded offshore and turbulence spread across regional supply chains. Hanjin controlled only about 3.2% of global container shipping capacity, WSJ Logistics Report's Erica E. Phillips writes, but the disruptions had an outsize impact at terminals where the carriers calls. The Port of Long Beach had its weakest September for imports since 2012, with volume down 15% from the same month last year, and Oakland's inbound shipments slipped back 4.2%. The figures suggest the peak shipping season is turning into something of a roller-coast at U.S. ports. Data specialists Panjiva Inc. says overall imported shipments declined 11.2% from August to September, an abrupt step back from the year's busiest month, although business was up 1.3% from September 2015.

Amazon.com Inc. is showing growing confidence that this year's holiday shopping will run through its warehouses. The e-commerce giant is stepping up its seasonal hiring in the U.S. by 20%, bringing in some 120,000 workers at its distribution centers, the WSJ's Joshua Jamerson reports. The hiring growth is a sharp contrast with plans at other major retailers and at the big parcel carriers that look to keep staffing levels heading into the holidays largely the same as last year. It also demonstrates the growing weight logistics operations are carrying in the annual push to get workers in place for consumer sales. Target Corp., for instance, is adding 70,000 seasonal workers to stores, the same as last year, while boosting hiring at fulfillment centers by 15%, to 7,500. E-commerce sales in the U.S. grew 15.8% in the second quarter, according to the U.S. Department of Commerce.

SUPPLY CHAIN STRATEGIES

Britain's battle over the Marmite supply chain is over -- for now. Consumer products distributor Unilever PLC and Tesco PLC, Britain's largest grocery chain, say they've resolved a dispute over pricing that kept the supplier's goods off Tesco's online sites for a time. The standoff marked an unusually public fight in Britain's typically button-down corporate world, the WSJ's Saabira Chaudhuri reports, and it highlighted the tensions in supplier-vendor channels since the country's June 23 Brexit vote. The decision to leave the European Union has sent the pound into a dive, changing the financial balance between businesses across the supply chain. In this case, Unilever insisted on raising prices 10% across its full range of products, from familiar names like Dove soap to Britons' beloved Marmite vegetable spread. The companies have retreated, but analysts say the Unilever-Tesco standoff could set the tone for how any future prices increases in the U.K. are passed along.

The Teamsters union has a foot in the door at XPO Logistics Inc., but getting deeper into the company's operations may take a long time. The International Brotherhood of Teamsters says warehouse workers and truck drivers at XPO sites in Connecticut and Illinois voted to join the union, the first win for the Teamsters at the business since XPO bought trucking giant Con-way Inc. last year for $3 billion. Still, WSJ Logistics Report's Loretta Chao writes that the two stations brought only about 200 votes in total for the union, counting only a small fraction of the 44,000 workers the company counts in the U.S. Experts say the union faces a steep climb to expand its foothold: although the logistics business is expanding rapidly, warehouse workers often are hired through staffing agencies, and organizing them station by station presents a big logistics challenge. Experts say the organizing effort may have an impact in the short-term, however, if XPO boosts wages to keep the labor group at bay.

QUOTABLE

IN OTHER NEWS

A majority of economists surveyed by The Wall Street Journal believe a U.S. recession i s likely in the next four years. (WSJ)

Ford Motor Co.'s launch of the F-Series Super Duty truck was slowed this year because of unspecified "parts issues," a union official says. (WSJ)

Transportation startup Hyperloop One Inc. hired a senior financial executive from Uber Technologies Inc. and raised $50 million in new financing to keep its development on track. (WSJ)

Delta Air Lines Inc. board Chairman Richard H. Anderson has retired and will be replaced by Francis S. Blake, a former CEO of Home Depot Inc. (WSJ)

Japanese consumers are fueling strong growth at discount retailers even as sales at luxury stores sag. (WSJ)

Ulta Salon Cosmetics & Fragrance Inc. raised its outlook for retail store additions in the U.S. to as many as 1,700 after reporting strong sales growth. (WSJ)

Fortress Investment Group LLC is exploring a sale of Florida East Coast Railway Corp., the regional freight carrier it took private in 2007. (Bloomberg)

New York State regulators ruled two former Uber drivers are eligible for unemployment payments, treating them as employees rather than independent contractors. ( New York Times)

Truckload carrier USA Truck Inc. will raise pay rates for independent drivers by up to 33 cents a mile. (Fleet Owner)

German car maker Daimler AG will build a $551 million factory in Poland to produce a new generation of auto engines. (Associated Press)

The share of sellers on Amazon's marketplace using Amazon's fulfillment services has grown by more than a third over the past 12 months, to 40.6%. (Internet Retailer)

The Port of Rotterdam opened an "additive manufacturing laboratory" aimed at making the port a 3D-printing hub for the maritime shipping and offshore industries. (Lloyd's Loading List)

The U.S. Department of Transportation gave several local governments a total of $165 million as part of its "Smart Cities" congestion-relief program. (TechCrunch)

Belgium's Port of Zeebrugge will expand its automotive-handling capacity by 40%. (Automotive Logistics)

The chief executive of online freight booking startup Haven says ocean freight forwarders will fail if they don't embrace automation. (The Loadstar)

CMA CGM SA named Michel Delville, the former financial chief at high-tech battery maker Saft Group, as its chief financial officer. (MarineLink)

Descartes Systems Group acquired supply software provider Appterra for $5.8 million. (American Shipper)

British property developer db Symmetry won planning permission for a warehouse and distribution park about 60 miles northwest of London. (Logistics Manager)

United Parcel Service Inc. will expand its premium morning package-delivery service to 28 countries. (DC Velocity)

The trucking industry has contributed $97,000 to Donald Trump's presidential campaign , down from the $1.05 million contributed to Mitt Romney in 2012. (Commercial Carrier Journal)

News and entertainment web site Buzzfeed is starting a merchandise sales site as part of an expanding e-commerce strategy. (Poynter)

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, @RWhelanWSJ 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 14, 2016 06:57 ET (10:57 GMT)

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