By Paul Page
Sign up:With one click, get this newsletter delivered to your
inbox.
Santa Claus's distribution network is under strain. United
Parcel Service Inc. and FedEx Corp. are scrambling to keep up with
holiday shipping volumes that have blown past expectations, WSJ
Logistics Report's Erica E. Phillips and Jennifer Smith write,
delaying delivery of online orders. Analysts say on-time delivery
rates for the parcel carriers have been down slightly in the weeks
since Thanksgiving even as the companies add workers at sorting
hubs, extend delivery windows and suspend on-time guarantees. The
holiday performance has come under greater scrutiny since carriers
had a rough time moving goods a couple of years ago, a sign of the
difficulty operators have in planning for online sales demand.
Despite the stress, the big shipping volumes are an upbeat signal
for retail demand that adds to signs of broader economic growth in
the fourth quarter. Trucking companies are reporting stronger
shipping volumes since Thanksgiving, suggesting a late-year surge
fueled by greater consumer and business confidence. Right now,
that's helping build e-commerce package volume, but operators hope
it also fuels momentum for the start of the New Year.
Maersk Line is thinking well beyond the box as it maps out its
container shipping strategy. The shipping unit of A.P.
Moller-Maersk A/S wants to tie together its transport and logistics
business to sell the kind of broader end-to-end distribution
services of companies like UPS and FedEx, the WSJ's Costas Paris
and Dominic Chopping report. At an investor meeting, Maersk chief
executive Soren Skou outlined an ambitious vision in which the
world's biggest container shipping line grows even bigger and
becomes an integral part of the supply chains of its customers.
It's a bid to move farther away from the shipping world's
commoditized industrial service that Maersk executives believe has
helped drag down ocean pricing. In practical terms, it will mean
moving more goods through cargo terminals run by its sister company
APM Terminals and tying in more closely with its logistics unit,
Damco. Over time, however, Maersk may look to grow as much on the
land as it has on the water.
Supply chains are moving into overdrive to combat a global
shortage that's hitting parents and children hard: a scarcity of
Hatchimals. The furry, walking, talking toy birds that hatch from a
shell are one of the big sensations of the season, the WSJ's Kathy
Chu reports, and Canada's Spin Master Corp. is scrambling to get
Chinese factories to ramp up production. The toy's sudden
popularity is one of those crazes for quirky items that can pop up
around the holidays, and it's taken on a world-wide dimension
thanks to e-commerce, social media and the global nature of
distribution. Because the craze spread most quickly in the U.S.,
Canada and the U.K., consumers elsewhere have found the toys weeks
after they sold out elsewhere -- creating a global market led by
opportunistic sellers. The manufacturer, meantime, has been
shipping the toys by air, spending far more than ocean transport to
get its Hatchimals in place before the market cracks.
SUPPLY CHAIN STRATEGIES
A New Jersey delivery firm says it's found new life after a
troubled retail delivery contract helped push the business into
bankruptcy. A judge ruled that EZ Worldwide Express can put a
debt-payment plan into motion and emerge from bankruptcy protection
after downsizing operations, the WSJ's Katy Stech reports,
including the big business the company did for fast-fashion
retailer Forever 21 Inc. To EZ Worldwide, that pact highlighted the
contradictions that can come with big shipper-supplier contracts:
the deal helped EZ Worldwide expand rapidly, but it also provided
more than half the company's revenue and left the business heavily
exposed when Forever 21's shipping "declined precipitously." EZ
Worldwide has focused on spreading its business around to more
retailers, and now has a deal with Amazon.com Inc. that the company
says carries "tremendous growth prospects."
QUOTABLE
IN OTHER NEWS
A bankruptcy judge ordered Hanjin Shipping Co. to disclose all
its U.S. assets and money it may have taken out of the country.
(WSJ)
Senate Majority Leader Mitch McConnell says he doesn't want
Donald Trump to propose a "trillion-dollar stimulus" plan for
infrastructure. (MarketWatch)
FedEx CEO Fred Smith warned in a speech of "massive economic
repercussions" if the U.S. follows protectionist policies Mr. Trump
has espoused. (Memphis Commercial Appeal)
Sustainability ranking firm EcoVadis secured more than $30
million in venture funding. (WSJ)
North Dakota's crude-oil production in October rose to a
five-month high. (WSJ)
With the Trans-Pacific Partnership in tatters, Republican Sen.
Rob Portman says the U.S. should consider separate trade deals with
China and Japan. (WSJ)
European Union nations agreed to allow higher tariffs on cheap
imports of some raw materials, an effort largely aimed at
commodities from China. (WSJ)
China's industrial output accelerated to 6.2% in November and
retail sales surged 10.8%, keeping the economy on course to hit the
government's annual growth target. (WSJ)
Alphabet Inc. is spinning off its driverless-car technology
research group into a full business unit called Waymo. (WSJ)
3M Co. expects higher sales growth in 2017 as it benefits from
Mr. Trump's plans to boost infrastructure and rejuvenate U.S.
manufacturing. (WSJ)
Japan's Asahi Group Holdings Ltd. will buy brewing assets in
five Eastern European nations from Anheuser-Busch InBev NV for $7.8
billion. (WSJ)
Luxury retailer Neiman Marcus Group Ltd.'s quarterly loss more
than doubled on declining same-store sales. (WSJ)
Brazil's retail sales contracted 0.8% from September to October
and 8.2% from a year ago. (Rio Times)
Moody's Investors Service set a negative outlook for the global
shipping industry in 2017. (American Shipper)
Genesee and Wyoming Inc. will buy British port services provider
Penalver Transport and issue new stock to pay for the $110 million
purchase. (The Hour)
Japan's 'K' Line is threatening to suspend vehicle transshipment
operations at Sri Lanka's Hambantota port after striking dock
workers prevented a ship from sailing. (IHS Fairplay)
Hudson's Bay Co. is extending its use of robotics after calling
rollout of the technology at a Toronto distribution center "a giant
leap forward." (Chain Store Age)
British online fashion retailer ASOS Plc plans to double U.K.
manufacturing because of the pound's post-Brexit plunge.
(Bloomberg)
Drivers at a distribution center run by British logistics
operator Wincanton plan a walkout next week over a pay dispute.
(Logistics Manager)
Amazon's new license to deliver alcohol in Scotland is drawing
criticism. (The Courier)
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, @smithjenBK 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
December 14, 2016 06:59 ET (11:59 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
United Parcel Service (NYSE:UPS)
Historical Stock Chart
From Aug 2024 to Sep 2024
United Parcel Service (NYSE:UPS)
Historical Stock Chart
From Sep 2023 to Sep 2024