Today's Top Supply Chain and Logistics News From WSJ
January 25 2017 - 07:14AM
Dow Jones News
By Paul Page
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Brexit is starting to shift the manufacturing cycle in Britain.
Whirlpool Corp. says it is restructuring its production strategy in
the country and in Europe, the WSJ's Andrew Tangel reports,
shifting its supply chain in what's seen as a response to Britain's
vote to leave the European Union. The world's largest appliance
maker says it will adjust manufacturing at a British plant to
deliver dryers only for that country and Ireland and will
consolidate its production for continental Europe into a site in
Poland. Other manufacturers are shifting production to Poland to
reduce costs and bolster their foothold inside the EU's single
market. And Whirlpool's decision to split the production, and keep
some work in the U.K., could help the company hedge against any
future tariffs on imported appliances as the country moves forward
with plans to exit from the EU. It's a Brexit safety valve of sorts
that will require maintaining separate supply chains.
The big warehouse squeeze may be ending. Prologis, Inc., the
world's biggest provider of commercial distribution space, says a
logistics market that's long seen warehouse demand outstripping new
supply is getting closer to balance. That will come as relief to
shippers and logistics companies that have seen leasing prices
soar, particularly near the big population centers that fueling big
growth in e-commerce sales. Prologis Chairman Hamid Moghadam tells
WSJ Logistics Report's Jennifer Smith the market is reaching "the
more mature part of the cycle" after tight discipline kept new
construction in check over the past couple of years. The cycle has
been good to Prologis, which hit an all-time high 97.1% occupancy
rate in the fourth quarter and saw U.S. rents grow 23%. Researchers
at CBRE Group Inc. say space remains tight, but that the decline in
industrial availability last quarter was the slimmest since 2010,
when the U.S. was coming out of the Great Recession.
Alibaba Group Holding Ltd. expects the boom in China's
e-commerce to keep going strong this year. The online sales giant
raised its growth outlook for 2017 after a financial report that
highlighted how the company is riding a wave of online retail
growth in China that is outstripping overall retail sales. The
WSJ's Liza Lin and Joshua Jamerson report Alibaba saw revenue climb
54% in its fiscal quarter ending in December, while profit expanded
38% to $2.57 billion. The report, which included a 73% jump in
active mobile users, shows Alibaba is still building on its home
market even as it seeks firmer footing in its international
expansion. That effort could be helped by a stronger push into
cloud computing, where Alibaba is investing heavily. The company
still faces headwinds in the U.S., where it is under a securities
investigation and charges that it is lax in pulling fakes from its
shopping sites. Profits at home and new financial deals, however,
suggest the company has the backing for a bigger global push.
SUPPLY CHAIN STRATEGIES
Samsung Electronics Co. is blaming its suppliers as the
electronics giant tries to recover from a meltdown in its
smartphone business. In its most comprehensive bid yet to explain a
recall of more than 2.5 million devices, the WSJ's Timothy W.
Martin and Eun-Young Jeong report, the company blames the
overheating of its Galaxy Note 7 smartphones on manufacturing and
design problems involving batteries. Samsung still hasn't
determined the definitive "root cause" of the failure, but the
focus on the supply chain highlights the challenges in pulling
together highly complicated distribution channels for precision
components in modern devices. In this case, battery casings from
one supplier weren't big enough, Samsung says, and new flaws crept
in as the company tried to quickly ramp up replacements. One of the
three independent investigators that Samsung hired found no issues
with the company's supply chain, but the two other firms say
there's plenty of room for concern.
QUOTABLE
IN OTHER NEWS
Canadian National Railway Co.'s fourth-quarter profit rose as
shipping volumes along several key lines improved. (WSJ)
Japan's prime minister says he will continue advocating free
trade and seek to convince President Donald Trump of the importance
of the TPP trade pact. (WSJ)
U.S. home sales declined 2.8% in December. (WSJ)
Inflation in Mexico accelerated at the fastest pace in 18 years
as controversial fuel price increases took hold. (WSJ)
Wal-Mart Stores Inc. is laying off about 200 e-commerce workers
in its California offices. (WSJ)
A rival air-bag maker bidding for Takata Corp. accuses the
troubled Japanese automotive parts supplier of rigging a
months-long auction. (WSJ)
Whirlpool Corp., responding to the Brexit vote, will limit
appliance production in the U.K. to domestic sales and make dryers
in Poland for the other markets. (WSJ)
Rio Tinto PLC, capitalizing on a commodities price rally, sold a
major piece of its coal business for $2.45 billion to a Chinese
company. (WSJ)
Etihad Aviation Group is reassessing its rapid-growth strategy
as the state-owned Middle East airline copes with the oil-industry
downturn. (WSJ)
Johnson & Johnson issued a tepid forecast for the year after
reporting results hurt partly by the impact of the strong dollar on
foreign demand. (WSJ)
Kimberly-Clark Corp. eked out a small gain in net sales despite
growing competition in the consumer-goods arena. (WSJ)
State governments submitted more than 300 transportation
projects for a prospective Trump administration infrastructure
spending plan. (The Hill)
The largest U.S. trucking group won't press Congress this year
to extend the 28-foot limit on twin trailers on trucks. (DC
Velocity)
Ivory Coast's cocoa regulator says late rains and inadequate
port equipment are leaving cocoa supplies piling up at the nation's
harbors. (Bloomberg)
HSH Nordbank is seeking a buyer as the two German states that
control the shipping finance provider look to leave the troubled
sector. (Reuters)
Mitsui O.S.K. Lines, Ltd. is working with companies including
commodities shippers to study building super-sized ships for
transporting liquefied natural gas. (Ship & Bunker)
China Cosco Holdings sold eight container ships for scrap.
(Splash 24/7)
Hyperloop Transportation Technologies is opening a facility in
France to test its fast-train technology. (TechCrunch)
Two brothers who trafficked men from Poland to work in a Sports
Direct warehouse in the U.K. were jailed for six years each under
the Modern Slavery Act. (The Guardian)
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 25, 2017 06:59 ET (11:59 GMT)
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