Today's Top Supply Chain and Logistics News From WSJ
February 17 2017 - 07:02AM
Dow Jones News
By Paul Page
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The voyage is over for Hanjin Shipping Co. A bankruptcy court in
Seoul pulled the plug on the stricken firm today, the WSJ's In-Soo
Nam reports, ruling the business that was the world's
seventh-largest container shipping company just a year ago will be
liquidated. The collapse is the starkest result of a historic crash
in the shipping business that has triggered unprecedented
consolidation in an industry that carries much of the world's
trade. Hanjin, which helped build South Korea's export-focused
economy over its 40 years on the water, has 37 ships left that are
being auctioned to pay creditors, and the few dozen employees left
will lose their jobs. The Korea Maritime Institute said, as a
result of the Hanjin collapse last August, up to 12,000 jobs will
be lost in the port city of Busan and the southern region where
most of Korea's shipping facilities are based.
The longshore union and employers at East Coast ports have taken
the first, relatively easy steps toward reaching terms on a new
contract. To get a real agreement before the current pact expires
in 19 months, however, the International Longshoremen's Association
and the United States Maritime Alliance Ltd., will have to tackle
tough issues both sides believe are key for their organizations.
They held what both sides called "productive and fruitful" informal
talks this week, WSJ Logistics Report's Jennifer Smith writes. But
a work slowdown last month at South Carolina's Port of Charleston
over a new automated gate system also demonstrated the schism at
ports over the critical issue of automation. The talks will come at
a critical point for ports: West Coast gateways have seen their
share of containerized imports slip in recent years, and long-term
labor peace on the Atlantic coast would be a key point in selling
shippers on the direction of their supply chains.
U.S. farmers are using a new tool in their efforts to cut costs
and remain in business: the internet. A growing share of
agriculture purchasing is taking place online, the WSJ's Jesse
Newman and Jacob Bunge report, as farmers look outside their usual
markets for industrial-scale deliveries of herbicides, seeds and
essential equipment. The shift could upend a decades-old system
built around small-town suppliers that also offer farming advice
and sell services such as spraying for weeds. It also highlights
the growing weight of business-to-business e-commerce, which is
more difficult to execute than basic online consumer sales and can
create complicated deliveries of industrial goods, particularly
large volumes that can be classified as hazardous materials. But
the farmers are finding one clear benefit: lower prices. One buyer
says he cut his spending on herbicides in half by going around his
local co-operative, savings that make the shipping costs well
worthwhile.
ECONOMY & TRADE
The activist-investor takeover bid for CSX Corp. is getting more
confused. Railroad industry veteran Hunter Harrison tells the WSJ's
Jacquie McNish and Joann S. Lublin he's frustrated by a new impasse
in the negotiations, and disappointed that his partner, Paul Hilal,
couldn't reach a deal after standing firm on some compensation and
governance demands. CSX says it will take the buyout bid by Mr.
Hilal's hedge fund to a shareholder vote -- a sharp break from what
had looked to be friendly talks aimed at a peaceful change in
control. A hostile effort could prove costly, but the freight
railroad says Mr. Hilal's demands would also carry heavy costs. Mr.
Harrison says he just wants to move on to "value creation for the
shareholders," but he's not saying what changes he would recommend
to get the deal done.
While most retailers are struggling with e-commerce, teenagers
seem to have online sales all figured out. The U.S. volume of
apparel and other items sold on Vinted, ThredUP and other such
reselling services has more than doubled since 2013, the WSJ's
Khadeeja Safdar reports, and analysts PrivCo estimate the market
now surpasses $2 billion. Although just a small sliver of the
retail business, the market is gaining traction on the growing
number of teens who are using the online capabilities to resell
used clothing, as well as exchange tips on fashion, trends and
accessories. That's a contrast with the foundering business at many
physical retailers, and it's one more way internet sales are eating
into traditional store sales. With some building sales through eBay
and apps like Shopify, the sales are a kind of micro-economy that
creates another stream for parcel carriers to draw shipments into
their delivery networks.
QUOTABLE
IN OTHER NEWS
Workers at Boeing Co.'s large plane-making facility in South
Carolina voted overwhelmingly against joining the machinists'
union. (WSJ)
U.S. housing starts fell 2.6% in January but private housing
permits rose to the highest level in 14 months. (WSJ)
Canadian Prime Minister Justin Trudeau vows to strengthen ties
with the European Union. (WSJ)
Natural gas prices fell to a nearly three-month low amid signs
the market is oversupplied. (WSJ)
Air France-KLM SA's profit jumped to $839.8 million last year as
cargo revenue fell 14.7%. (WSJ)
Canadian plane and train maker Bombardier Inc. posted a
worse-than-expected loss and slide in revenue in the fourth
quarter. (WSJ)
Net profit at Wal-Mart de Mexico SAB rose 23% in the fourth
quarter on higher sales and cost controls. (WSJ)
Fashion retailer Kate Spade & Co. signaled it may be for
sale, saying is reviewing its strategic options after posting
higher fourth-quarter revenue and profit. (WSJ)
The head of Air Transport Services Group Inc. says Amazon.com
Inc. may need up 100 jet freighters as it expands logistics
operations. (The Loadstar)
Wal-Mart is buying outdoor apparel and recreation gear retailer
Moosejaw for $51 million. (Detroit Free Press)
Rickmers Maritime Trust gave a grim view of the shipping line's
financial recovery efforts after posting a $180 million loss for
2016. (Splash 24/7)
Idaho-based WinCo Foods opened an 800,000-square-foot
distribution center outside Dallas to back the company's expansion
in Texas and Oklahoma. (Dallas Morning News)
Omnitracs LLC will provide Peloton Technology truck platooning
capabilities in its fleet management software. (Fleet Owner)
Deutsche Post DHL Group and China's Huawei Technologies Co. will
develop supply-chain software tied to Internet-of-Things
technology. (Post & Parcel)
E-commerce platform Shopify Inc. says the value of goods sold
through its merchants nearly doubled in the fourth quarter.
(Internet Retailer)
Vietnam's government is launching a logistics development plan
aimed at expanding the sector by 15% to 20% per year over the next
decade. (Viet Nam News)
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
February 17, 2017 06:47 ET (11:47 GMT)
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