By Paul Page
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A.P. Moeller-Maersk A/S is splitting in two, laying the
groundwork for the world's largest shipping line to join a wave of
consolidation that's swept the industry this year. The split comes
as the Danish conglomerate's two main businesses - marine shipping
and energy - are mired in historic slumps. Maersk Line will form
the core of a transportation and logistics division, along with
shipping terminals and other assets, the WSJ's Dominic Chopping
writes. Analysts say the split will allow management to focus on
navigating the world's biggest shipping line through one of the
worst markets in years, without the distraction of managing
Maersk's energy assets during a protracted oil rout. Executives
said after the split was announced that they'll apply this renewed
focus toward acquisitions. That's the surest indication yet that
the shake-out that already includes several mergers among large
shipping lines - and one bankruptcy - is nowhere near over.
The International Brotherhood of Teamsters wants XPO Logistics
Inc. to add one more acquisition to its purchase-built business:
union drivers. The Teamsters are mounting campaigns to organize XPO
drivers in Aurora, Ill., and warehouse workers in North Haven,
Conn., WSJ Logistics Report's Robbie Whelan writes, adding to
recent union drives in Texas and California. The union is trying to
regain some momentum in the trucking business by targeting one of
the biggest -- and fastest-growing -- companies in the freight
world. Most of the XPO employees the Teamsters are trying to
organize formerly worked for Con-way Inc., the second-largest
less-than-truckload carrier, which XPO bought for $3 billion in
September 2015. The union is also undertaking an aggressive effort
to unionize drivers at FedEx Freight, the FedEx Corp. unit that is
the biggest operator in the LTL arena.
FedEx Corp. is bullish on the holiday shipping season even
though the company is growing more pessimistic about U.S. economic
progress. Fresh from improved earnings in its fiscal first quarter,
FedEx raised its outlook for the year in part because of what the
carrier says e-commerce will feed another record-breaking holiday
shipping season. FedEx executive Michael Glenn told analysts it
expects each of the four Mondays during the peak period "to be
among the busiest in our corporate history," the WSJ's Mike Esterl
reports. FedEx's results show the company is continuing to gain
from the e-commerce surge; average daily volume at its Ground unit,
which handles most of the packages from online sales, expanded 10%
in the three months ending Aug. 31. Despite the optimism, FedEx is
adding fewer seasonal workers this year -- 50,000, down 5,000 from
a year ago -- which may be because it expects overall economic
growth to be smaller than earlier projections.
The seemingly sudden unraveling of Hanjin Shipping Co. is
shining a harsh light on business practices at one of the world's
biggest shipping companies, and on the family-run conglomerates at
the center of South Korea's corporate culture. Investigators in
Seoul are looking into the stock sales this year of the company's
former chairwoman, Choi Eun-young, who dumped all her stock in
Hanjin this spring in a series of sales that saved her and her
family at least $1 million in losses as the business foundered and
its share price sank. The probe comes, the WSJ's In-Soo Nam
reports, as maritime and logistics try to clean up the supply chain
turmoil left in the wake of Hanjin's collapse. The company's main
creditor and largest shareholder offered a combined $100 million to
get stranded boxes moving again, sending Hanjin shares soaring even
as experts said the money may not be enough to resolve the
situation. Shippers and creditors also ask why the carrier didn't
act more quickly to rein in the damage. Analysts trace some of
Hanjin's woes to her leadership: Ms. Choi agreed to many of the
costly ship leases that many believe are central to Hanjin's
troubles.
ECONOMY & TRADE
There won't be applause in Australia for the apparent resolution
of a trade dispute between the U.S. and China over beef exports.
The impact of the U.S.-China agreement on global markets turns out
to be a lesson in global trade, the WSJ's Lucy Craymer reports,
with U.S. producers hailing the promise of renewed access to China
while foundering Australian exporters will be facing new headwinds.
China consumes around 13% of the world's beef and will import
825,000 metric tons of beef this year, by U.S. estimates, 24% more
than in 2015 and up from just 11,000 tons back in 2002. Any U.S.
gain is likely to come at the expense of Australia. Its exports to
China are down 35% this year, as a shortage of animals available
for slaughter sent prices to record highs. Brazil has overtaken
Australia as China's top supplier because of its low prices, and
now the U.S. looks set to compete for the higher end of the
market.
QUOTABLE
IN OTHER NEWS
The Federal Reserve left short-term interest rates unchanged,
but signaled it still expects to raise them before year-end.
(WSJ)
A "backlash against globalization" is stunting trade growth and
contributing to stagnating world economic output, the Organization
for Economic Cooperation and Development says. (WSJ)
Apple Inc., which is working to build an electric car, has held
talks about investing in British sports car maker McLaren
Technology Group. (WSJ)
China's two largest steelmakers, Baosteel Group Corp. and Wuhan
Iron & Steel Group Co., confirmed merger plans amid Beijing's
efforts to consolidate the industry. (WSJ)
Manufacturers of metal-cutting machines are shearing prices amid
a global slump in industrial machinery demand. (WSJ)
The World Trade Organization is expected to rule the European
Union failed to adequately eliminate illegal subsidies to plane
maker Airbus Group SE. (WSJ)
The U.S. government gave Airbus the go-ahead to deliver
jetliners to Iran Air. (WSJ)
Amazon.com Inc. appears to be using its proprietary algorithms
to steer customers toward its own more expensive products over
goods from other retailers on its marketplace. (ProPublica)
Amazon is preparing to open bookstores on the U.S. East Coast,
with signs pointing to Boston, New York and Washington, D.C.
(Boston Globe)
The head of CMA CGM SA says he is looking for acquisition
targets that will become available in a "wave of consolidation"
expected to follow Hanjin Shipping's collapse. (Reuters)
The new FedEx Corp. rate schedule includes a change in the
dimensional pricing formula that will raise prices for oversize
shipments. (DC Velocity)
Startup Freshingstock.com is seeing strong growth in business
handling returns for online sales in the U.S. from Chinese
companies. (Internet Retailer)
U.S. metropolitan areas exported more than $1.3 trillion in
merchandise in 2015, accounting for 89% of all U.S. goods exports,
the Department of Commerce said. (Material Handling and
Logistics)
Blue Diamond Growers opened an expanded warehouse that will meet
new food-safety standards with hands-free handling of almonds.
(Modesto Bee)
Indiana could be short some 1 million workers needed to fill
manufacturing jobs in the next decade. (MarketWatch)
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:
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Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
September 22, 2016 07:17 ET (11:17 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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