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)

Copyright (c) 2017 Dow Jones & Company, Inc.
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