BRK.A Berkshire Hathaway Inc

By Paul Page 

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America's top investor is placing a long-haul bet on trucking. Warren Buffett's Berkshire Hathaway Inc. is taking a nearly 40% stake in the operator of Pilot and Flying J travel centers, the WSJ's Nicole Friedman writes, and plans eventually to take control of a business Mr. Buffett says is tied to the intractable need to move more goods "to more people." It's the latest investment in traditional transportation at Berkshire, which also owns BNSF Railway, and marks an indirect move into the trucking business that the Knoxville, Tenn.-based family-owned Pilot Travel Centers LLC serves. Still, the deal seems to run counter to big changes percolating in the business: Some analysts project massive growth in electric and autonomous vehicles, which would cut into the fuel sales that provide Pilot Flying J more than $20 billion in annual revenue. Pilot Chief Executive Jimmy Haslam expects "diesel fuel will power trucks for a long time to come," however, giving the operator a steady business tapping into shipping growth.

Europe is getting more expensive for Amazon.com Inc. and the e-commerce giant has barely expanded its business there. European Union antitrust regulators are moving aggressively to retrieve several hundreds of millions of euros in allegedly unpaid taxes from Amazon, the WSJ's Natalia Drozdiak and Sam Schechner report, as Brussels cracks down on sweetheart tax deals that governments have granted to multinationals. The move against Amazon is over taxation in Luxembourg that was set in a 2003 tax deal with Amazon, one that regulators believe amounts to illegal state aid. The case highlights the complicated efforts multinationals are undertaking to rein in costs even as they expand internationally. That's a big concern for Amazon as it looks to bulk up its presence in the U.K. and spread out across Europe. The French newspaper Le Monde reported this week the company is looking for acquisitions and partnerships in France, including physical locations and deals with distributors.

American eating habits aren't keeping up with pork production. U.S. meatpacking plants are sending record numbers of hogs to slaughterhouses this year, the WSJ's Benjamin Parkin and Jacob Bunge report, pushing pork futures down nearly 40% since the middle of the summer. Wholesale prices for pork bellies are off over 50% since July and retail prices are sliding as American consumption falls behind supply. It's the latest example of agriculture production spinning beyond market demand, and the big supply imbalance carries heavy stakes because farmers and meatpackers are depending on selling abroad. Pork exports rose 11% in the first seven months of 2017 and a fifth of the pork produced in the U.S. this year will be exported as companies sell to countries like Mexico and South Korea where demand is growing. Those shipments depend on politically vulnerable trade agreements, however, and U.S. agriculture can figure prominently when tough trade talk gets more contentious.

SHIPPING OUTLOOK

Retailers are projecting a robust holiday shopping season but the wealth won't be spread around equally. The National Retail Federation forecasts sales will grow between 3.6% and 4% in November and December from a year ago, the WSJ's Sarah Nassauer reports, a rosy outlook in line with outlooks from Deloitte, AlixPartners and RetailNext Inc. Retailers certainly have been bringing in goods with confidence: The NRF says imports at major gateways in its Global Port Tracker report reached the highest volume ever in July, and loaded inbound volume at the Port of Los Angeles grew by more than 15,000 containers from July to August. The broad retail figures belie an industry in turmoil amid big changes in shopping and distribution, however. The NRF predicts "nonstore sales" -- online business -- will grow up to 15% this season. Several big chains have filed for bankruptcy protection this year, while others have closed hundreds of weaker stores, a trend likely to push even more sales online.

QUOTABLE

IN OTHER NEWS

U.S. auto sales set the briskest monthly pace for the year in September, growing 6.1% year-over-year. (WSJ)

Wal-Mart Stores Inc. is buying New York same-day delivery startup Parcel. (Associated Press)

Sears Canada Inc. is on the verge of liquidation under actions in bankruptcy court. (WSJ)

Glencore PLC will invest nearly $1 billion in a Peruvian zinc operation as rebounding commodity prices refill the miner's coffers. (WSJ)

More companies looking for more cost savings are centralizing their procurement decisions. (WSJ)

Google parent Alphabet Inc. says Uber Technologies Inc. knew a former Google engineer had confidential files before buying his self-driving truck startup Ottomotto. (WSJ)

A backlog of relief supplies at Puerto Rico's main port is easing as trucks get better access to distribution centers. (CNBC)

Spot rates to ship sea containers from Asia to Europe and the U.S. are sinking despite the crush of holiday-season orders. (Nikkei Asian Review)

A gauge of factory employment in Europe rose at the fastest pace since 1997. (Bloomberg)

Low water levels and other problems are slowing barge traffic on U.S. rivers, triggering higher shipping rates. (AgWeb)

North Carolina's transport chief says electric-car sales and improving fuel efficiency may cut state gas-tax collections markedly by 2021. (Associated Press)

Pennsylvania is considering ending a longtime tax break for warehouse operations. (PennLIve)

Third-party logistics provider NFI Industries bought port trucker California Cartage Co. (DC Velocity)

Ace Hardware Corp. bought a controlling stake in e-commerce startup The Grommet. (Chicago Sun-Times)

A group representing ship operators says shippers and forwarders must do more to ensure invasive species don't get into shipping containers. (Lloyd's List)

Dubai's Drydocks World is invoking local rules to restrict payments to creditors ahead of its sale to terminal operator DP World. (Splash 24/7)

The U.S. is reviving a complaint over limits on imported wine in Canada's British Columbia province. (BBC)

U.S. ethanol producers are fighting new tariffs Brazil is imposing on imports of the fuel. (Omaha World-Herald)

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

October 04, 2017 06:40 ET (10:40 GMT)

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