Today's Top Supply Chain and Logistics News From WSJ
April 04 2017 - 7:07AM
Dow Jones News
By Paul Page
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The automobile industry, which has helped prop up the U.S.
economíc recovery, is facing an inventory glut. Car sales
unexpectedly slid in March, the WSJ's Adrienne Roberts reports,
heightening concerns about bloated dealer stocks and raising
worries that the market weakness will spread back through the
supply chain to factories. Auto makers sold 1.55 million vehicles
in March, down 1.6% from a year ago, according to Autodata Corp.,
suggesting the market is poised to end a seven-year growth streak.
Meanwhile, J.D. Power says the number of days a vehicle sat on a
dealer lot before being sold hit 70 days in March, the highest
level since July 2009. Inventories have been excessive since the
end of 2016, and WardsAuto.com says more than 4 million unsold
vehicles crammed dealer lots as of Feb. 28. Deeper discounting is
on the way, and car-company earnings may take a hit and that could
trigger new cost-paring production cuts.
There's no talk at Tesla Inc. about a slowdown in automobile
demand , and certainly no suggestion of restraint in production.
The upstart Silicon Valley electric-car maker is marking a
milestone in surpassing Ford Motor Co. in market capitalization
this week, the WSJ's Tim Higgins and Christina Rogers report, just
as the company is preparing to scale up its manufacturing and
distribution capabilities. Tesla seems to be defying fears that the
auto industry is heading toward a downturn, reporting skyrocketing
sales of its electric cars -- although sales remain relatively
modest -- even as low gasoline prices have sunk demand for other
electric vehicles. Its global sales rose 69% in the first quarter,
putting the car maker on the path to meet its goal of 50,000
deliveries in the first half of this year. Tesla delivered 76,000
cars last year -- about a third of what Ford sold in this year's
first quarter alone. But for the moment, it looks like investors
are betting on new technology over the internal combustion
engine.
Apple Inc. is getting sharp pushback from a small but critical
supplier as the electronics giant tries to take greater control of
its supply chain. The U.K.-based Imagination Technologies Group PLC
is signaling a possible patent fight after Apple said it was
working on its own design for the technology to process graphics in
its iPhones and other devices. The WSJ's Stu Woo report's that
Imagination's shares are taking a big hit in London trading on the
news that it would lose its biggest customer, a sign of the heavy
shadow Apple's big business casts across its suppliers. In this
case, Imagination says Apple also depends heavily on the company
for graphic processing units that Imagination insists would be
"extremely challenging" to duplicate without infringing on the
company's design. That could bring Apple its second intellectual
property dispute with a supplier this year, following its suit in
January against chip supplier Qualcomm Inc.
SUPPLY CHAIN STRATEGIES
The political climate around the world may test the resilience
of supply chains on a grand scale. In a WSJ Logistics Report Guest
Voices commentary, Yossi Sheffi, the director of the Massachusetts
Institute of Technology's Center for Transportation &
Logistics, writes that the early months of President Donald Trump's
administration raise critical questions over risk and uncertainty
for supply chains that companies should address in their planning.
Potential changes in trade and taxation are coursing through policy
circles in Washington, and those issues along with talk of changes
in immigration policies, may upend ties between suppliers and
vendors deep in distribution channels. Mr. Sheffi writes that the
potential scenarios and outcomes are too numerous to prepare for
fully, however, and that companies watching the very heated
political debates underway must focus on separating rhetoric from
real potential impact on operations and finances.
QUOTABLE
IN OTHER NEWS
U.S. manufacturing growth slipped in March but remained in
strong expansion territory. (WSJ)
An Ocean Rig UDW Inc. creditor is trying to halt the offshore
drilling contractor's restructuring, arguing Chief Executive George
Economou is using the business as a piggy bank for his other
shipping enterprises. (WSJ)
The global aviation community remains hamstrung by technical,
marketing and jurisdictional disputes in attempts to update
flight-data recorder technology. (WSJ)
The U.K.'s Office of Financial Sanctions Implementation added
financial penalties as part of changes in how it enforces
sanctions. (WSJ)
Tight ocean shipping capacity is triggering a surge in air
freight demand between Asia and Europe. (Lloyd's Loading List)
Japan's Kawasaki Heavy Industries will cut its struggling
shipbuilding and offshore business by nearly a third. (Nikkei Asian
Review)
United Parcel Service Inc. is launching ground delivery and
pickup service on Saturdays to speed up delivery of e-commerce
shipments. (MarketWatch)
Peloton Technology will start testing its truck platooning
system this spring on the Ohio Turnpike. (Cleveland
Plain-Dealer)
The White House nominated Kevin K. McAleenan, the acting Customs
and Border Protection deputy commissioner, as permanent
commissioner. (American Shipper)
Competition authorities in Norway scuttled shipping company
Eimskip's proposed acquisition of rival Nor Lines. (IHS
Fairplay)
China Merchants Port Holdings Co. reported a 14.5% year-on-year
rise in container throughput in 2016. (Container Management)
A prosecutor is investigating payments the South Carolina Ports
Authority made to a political consultant without bidding or review.
(Charleston Post & Courier)
Cutlery maker Wüsthof is cracking down on discount resellers on
Amazon's marketplace in part by barring them from storing its goods
at Amazon warehouses and using the company's fulfillment service.
(Internet Retailer)
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.
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Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
April 04, 2017 06:52 ET (10:52 GMT)
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