Today's Top Supply Chain and Logistics News From WSJ
January 20 2017 - 7:38AM
Dow Jones News
By Paul Page
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The CSX Corp. board is offering its support for the current
management team and growth strategy even as investors show lots of
confidence in a bid by Hunter Harrison to take control of the
freight railroad. Shares in the carrier surged to all-time highs on
news that the rail industry veteran was teaming up with an activist
investor in a new run at CSX, the WSJ's Paul Ziobro reports, a move
that's will revive talk of consolidation in the industry. Mr.
Harrison walked away from an exit package worth $89 million at
Canadian Pacific Railway Ltd. to make the new effort. CSX investors
are anxious to see if Mr. Harrison can bring the railroad the sort
of efficiency gains he wrung from CP, which just reported its
best-ever annual operating ratio. CSX remains broadly profitable,
but its operating earnings have barely budged this decade and last
year were the lowest since 2010. Mr. Harrison sees room for
improvement, and investors appear to agree -- whether that means
gains for CSX on its own or as part of an even bigger railroad.
Union Pacific Corp. isn't willing to say whether the commodities
slump has hit bottom even though figures at North America's biggest
freight railroad suggest the long-lagging business is getting
better. Union Pacific reported a profit of $1.14 billion in the
fourth quarter, up slightly from $1.11 billion, the WSJ's Ezequiel
Minaya reports, even as revenue slipped slightly to $5.17 billion.
The improvement came mostly because the railroad is continuing to
pare back its operations in line with diminishing demand: Union
Pacific cut its locomotive fleet by 5% in the quarter from the same
quarter the year before, and the railroad is delaying the
acquisition of 40 of the 100 new locomotives it planned to add this
year. But grain volumes jumped, the slide in coal volume and
revenue was more modest and intermodal business was flat. Union
Pacific is looking for volume gains this year, and with capacity
reductions still in place that would mean the carrier would be on a
fast track toward higher pricing.
J.B. Hunt Transport Services Inc. is finding its strongest
returns outside the daily freight market . The transport giant
improved its net profit slightly in the fourth quarter, the WSJ's
Anne Steele reports, but the returns across its various lines
highlight the ongoing struggle that companies face in adjusting
capacity to a volatile and highly competitive market. Weak pricing
in J.B. Hunt's intermodal, freight brokerage and trucking units
held down earnings in those areas even as business jumped at the
dedicated contract services operation that manages fleets for
customers. The company says basic truckload prices fell 1.4% in the
quarter from a year ago and revenue, operating income and revenue
per load in the logistics operation all fell at a double-digit
pace. The strength in dedicated services proves the value the
diversified strategy has for the company, but the results in other
lines suggest that J.B. Hunt and other U.S. freight operators are
still looking for prices to push higher.
TRANSPORTATION
With larger vessels, shifting trade patterns and population
growth all changing the landscape for shipping, industry expert
Olaf Merk says it's time for public policies involving ports to
catch up. The administrator for ports and shipping at the
International Transport Forum writes in a Guest Voices commentary
for WSJ Logistics Report that a new wave of port reform is needed
to meet new demands in modern trade. Mr. Merk writes that many
ports operating strictly as landlords for global cargo terminal
operators are ill-equipped to meet the needs of both ship operators
and the big cities that are growing around seaports. The ports, he
writes, must be "able to bridge the demands of a range of parties
beyond the port while providing innovative transport solutions to
local firms." Questions over port management are becoming more
important as bigger ships strain dockside operations and terminal
operators gaining their own scale through acquisition and
expansion.
QUOTABLE
IN OTHER NEWS
U.S. housing starts rose 11.3% in December and reached their
highest level in nine years in 2016. (WSJ)
The number of Americans newly applying for unemployment benefits
fell sharply and remained near a four-decade low. (WSJ)
The decline in sales at physical stores is hitting small-town
malls in the U.S. especially hard as big chains close anchor sites.
(WSJ)
Big leaps in artificial intelligence are raising tensions among
businesses and policy makers over the impact of the technology on
middle-income jobs. (WSJ)
Beer maker Asahi Group Holdings Ltd. is reviewing its
investments in China, including its minority stake in Tsingtao
Brewery Co. (WSJ)
Shares in DryShips Inc. fell more than 28% after the bulk
carrier announced a one-for-eight reverse stock split.
(MarketWatch)
Alphabet Inc. unit Google is facing inventory shortages of its
Pixel and Pixel XL smartphones. (The Verge)
A measure of U.S. domestic road and rail shipments rose 3.5% in
December, the fastest growth pace in two years. (Logistics
Management)
Malaysia's Port Klang says its container throughput expanded
10.8% last year. (Port Technology)
Freight exports from Hong Kong International Airport jumped
12.8% year-over-year in December. (Air Cargo World)
One of two Hanjin Shipping Co. vessels stranded with crew off
Canada's Pacific Coast for six months is sailing back to Asia after
the ship was sold. (Victoria Times Colonist)
Hapag-Lloyd AG increased the size of its new bond offering to
$266 million, citing strong demand. (American Shipper)
Scorpio Tankers Inc. won a $172 million loan commitment to
finance its purchase of eight tankers under construction. (Shipping
Watch)
The price of U.S. First-Class postage stamps will rise by two
cents on Sunday. (Detroit Free-Press)
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 20, 2017 07:23 ET (12:23 GMT)
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