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.
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)
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.
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(END) Dow Jones Newswires
February 17, 2017 06:47 ET (11:47 GMT)
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