Today's Top Supply Chain and Logistics News From WSJ
January 18 2017 - 6:58AM
Dow Jones News
By Paul Page
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Shopping mall owners facing the loss of big retailers are
getting help from an unlikely arena -- e-commerce business. Some
retailers are converting empty mall space into makeshift
distribution centers for pickup and returns of goods bought online,
the WSJ's Esther Fung and Jennifer Smith report, even as more
online merchants are opening their own physical stores to reach
more customers. Some retail centers, including those at town-center
locations in smaller cities, are even housing Amazon Lockers, which
allow customers of Amazon.com Inc. to pick up and return packages
at their convenience. It's part of the changes that the surge in
online shopping are imposing on the physical landscape in the
retail world, where both online specialists and storefront
operators are trying to match changing customer preferences to new
distribution channels. Mall owners have been hard hit by the move
to online sales, but the delivery strategies may bring relief to
that troubled wing of the real estate market.
The Limited Stores Co.'s filing for bankruptcy protection marks
a watershed for the retail industry. The company is going through a
sale through bankruptcy that seeks to make The Limited the biggest
merchant in several years to transform itself from brick-and-mortar
business to online specialist, the WSJ's Lillian Rizzo and Peg
Brickley report. The apparel retailer has at least one potential
buyer lined up, an affiliate of Sycamore Partners that is bidding
to take on the brand name and e-commerce assets. The company, once
an icon of logistics for its international distribution operation,
already closed its 250 stores this month, and joins a growing list
of retailers that include American Apparel LLC, Aéropostale Inc.
and Sports Authority Holdings Inc. that have been pushed into
bankruptcy by changing consumer buying patterns. The filing also
leaves several logistics providers as unsecured creditors,
including Mast Global Logistics, United Parcel Service Inc., FedEx
Corp. and TradeGlobal LLC.
The dying embers in railroad coal shipments may have some life
in them. CSX Corp. says its top line grew 9.2% in the last quarter
of 2016, the WSJ's Anne Steele reports, amid a small reprieve from
plunging coal shipments. The company's overall profit slipped to
$458 million, but that was only slightly below the profit from a
year ago, the latest signal that rail industry fortunes are
recovering. Carriers have been cutting costs over the past couple
of years, but CSX is also seeing gains in critical business lines.
Coal shipments rose 8.3% in the quarter, which included an extra
accounting week, and were up 2.8% even without those added days.
That comes after a 2016 in which U.S. freight railroads saw their
fewest coal carloads since the Association of American Railroads
began tracking the figures in 1988. But overall industry coal loads
were up year-over-year in December, and so were intermodal
shipments, giving railroads some momentum heading into 2017.
ECONOMY & TRADE
Tough political talk about manufacturing has some companies
looking to crunch the numbers behind moving production to the U.S.
The studies in many cases are in their early stages, but the WSJ's
Richard Teitelbaum reports the economic analyses are coming as an
overhaul of the U.S. tax code looms and President-elect Donald
Trump seems to be calling out big-name companies on a near-daily
basis for plans to expand abroad. Fitbit Inc. has already met with
a contractor that makes its fitness trackers, and contract
manufacturer Flex Ltd., says it is getting requests to analyze the
impact of moving factory work to the U.S. It's a complex equation
that will involve labor, logistics, supplier relationships and
changes in tax law that may not become clear for several months or
longer. But for many businesses, the questions over supply chains
are critical to their operating models, and they're not waiting to
understand the impact.
Plans in Washington for so-called border adjustment may need
adjustment. In a new twist in the increasingly heated debate over
potential import taxes, President-elect Donald Trump criticized a
cornerstone of House Republicans' corporate-tax plan, the WSJ's
Richard Rubin and Peter Nicholas report, throwing into doubt a
measure pitched as an alternative to import tariffs. The idea would
tax imports and exempt exports to encourage companies to locate
jobs and production in the U.S. But Mr. Trump calls the idea "too
complicated." That's potentially a big win for retailers and oil
refiners who have warned the measure would force them to raise
prices because they rely so heavily on imported goods. It also
highlights the uncertainty that Mr. Trump's comments on
manufacturing and imports are casting over businesses and policy
makers. So far, he has cajoled and pressured companies. But the
apparent divide between the incoming president and congressional
allies underscores the challenge he'll face turning his agenda into
law.
QUOTABLE
IN OTHER NEWS
Prime Minister Theresa May said the U.K. intends to leave the
European Union's single market, a definitive break with the
potential to reset trade and supply chains for a broad range of
businesses. (WSJ)
General Motors Co. confirmed it will invest an extra $1 billion
in its U.S. manufacturing and bring in-house some production now
being done by a supplier in Mexico. (WSJ)
Hyundai Motor Co. plans to invest up to $3.1 billion in its
existing U.S. manufacturing facilities and may build another plant
in the country. (WSJ)
Several business groups and companies want the incoming Trump
administration to salvage and renegotiate the Trans-Pacific
Partnership trade deal. (WSJ)
Wal-Mart Stores Inc., the largest U.S. importer by shipping
container volume, says it plans to create about 10,000 U.S. jobs
this year. (WSJ)
The dollar fell to a one-month low following Mr. Trump's remarks
that it is "too strong." (WSJ)
A rush by Chinese investors into copper is fueling a sharp rise
in prices for the industrial commodity. (WSJ)
A U.K. court approved an agreement between Rolls-Royce Holdings
PLC and Britain's Serious Fraud Office to settle a four-year
corruption investigation. (WSJ)
Shipbroker Braemar ACM says 35 container ships have already been
sent for scrapping so far this year. (The Loadstar)
Hapag-Lloyd AG will raise $159 million through a bond sale to
pay early redemption of notes due this fall and other purposes.
(American Shipper)
Less than a third of North American shoppers in a survey say
buying goods online and picking them up in stores works smoothly.
(Internet Retailer)
Trucking lobbyists want the Republican-controlled U.S. Congress
to bar enforcement of state laws on driver work rules. (Commercial
Carrier Journal)
Japanese companies are shipping more goods on railroads in part
because of a chronic shortage of truck drivers. (Japan Times)
A cold snap in Europe has left the U.K. with a vegetable
shortage, including depleted zucchini supplies. (Evening
Standard)
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 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
January 18, 2017 06:43 ET (11:43 GMT)
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