Today's Top Supply Chain and Logistics News From WSJ
June 16 2017 - 6:46AM
Dow Jones News
By Paul Page
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The rapid-fire supply chain strategy Spain's Zara used to build
its business is helping the fast-fashion icon defy gravity in a
turbulent retail market. The company's parent, Inditex SA, saw an
18% surge in net profit in its recent quarter and a 14% jump in
sales, a sharp contrast with the major retrenchment American
companies including Gap Inc., J. Crew Group Inc. and Nordstrom Inc.
are undergoing as shopping patterns change. The streamlined
production system that has allowed Zara to outpace rivals is now
giving it a powerful platform to succeed online, the WSJ's
Jeannette Neumann reports. The company makes 60% of its garments in
Spain and nearby countries, gaining quick response on consumer
trends and using Spain-based logistics centers that it leverages to
constantly refresh its stores with small batches of new designs.
The strategy has been a boon for its online business, feeding
steady updates to web shoppers even as other retailers struggle to
build a digital presence alongside traditional stores.
Nike Inc. is trying to move faster. The sportswear giant is
resetting its strategy to focus on key markets, digital sales and
fewer products as it adjusts to online shopping trends that are
changing the relationship between suppliers and traditional retail
outlets. The WSJ's Sara Germano reports Nike has seen its future
orders tumble in recent quarters as traditional sporting goods
chains such as Sports Authority have stumbled. One immediate impact
of the strategy: Nike will cut its global workforce by about 2%, or
1,000 jobs, retrenching for the first time since the recession. CEO
Mark Parker says the company is now "delivering product faster than
ever," and will speed things up even more. To do that, Nike will
slash its styles by 25% to focus on its biggest franchises, which
will help streamline operations at the front end of the company's
sprawling global supply chain.
U.S. grocers are coming under fresh pressure as consumers and
discount rivals build new supply chains outside traditional
distribution networks. Grocery behemoth Kroger Co. sent a shockwave
through the industry with its new warning that intensifying
competition would further cut into earnings this year, and the
WSJ's Annie Gasparro writes the company's troubles are part of the
larger trends that are roiling the business. Consumers are shopping
for more of their groceries outside of traditional supermarkets.
Online merchants, discounters and meal-kit delivery services all
are cutting into grocers' market share. Food and beverage sales at
brick-and-mortar stores in the U.S. were down nearly $3 billion in
the first quarter from a year earlier. And a new wave of discount
grocers is pushing into the arena, with Germany-based chains Lidl
and Aldi both investing heavily. With margins already thin and
sales slowing, traditional grocers are trying to find a response in
a market that's changing at a rapid pace.
COMMODITIES
China's dominant hold on global rare earths supplies may soon
extend into the U.S. A failed bidder for the Mountain Pass rare
earths mine, the sole U.S. source of elements essential to
electronics devices, says he'll challenge a bankruptcy auction that
would deliver the mine to a buyout group backed by a Chinese
company. With a bid of $20.5 million, two U.S. investment firms
were selected to take control of Mountain Pass, along with China's
Leshan Shenghe Rare Earth Shareholding Co., the WSJ's Peg Brickley
reports. China controls most of the global supply of rare earths,
elements used in small amounts in electronics, from cells phones to
weapons systems. Rival bidder Tom Clarke, a Virginia entrepreneur
is drumming on the national security implications of the deal. He
says he has lined up international allies to revive a mine that
boomed when Chinese trade policy crimped the world supply but
failed when policies changed and prices fell.
QUOTABLE
IN OTHER NEWS
U.S. manufacturing output fell 0.4% in May from a postrecession
high the month before. (WSJ)
Mexico's peso is trading at its strongest levels in more than a
year, as both domestic and external risks to the currency recede.
(WSJ
Canadian manufacturing sales increased in April at their fastest
pace in four months. (WSJ)
Nestlé SA is considering selling its U.S. confectionery
business, as packaged-food giants struggle to accommodate changing
consumer tastes. (WSJ)
French oil-services company CGG Group filed for bankruptcy
protection after reaching a restructuring deal that will eliminate
about $2 billion in debt. (WSJ)
Some truck drivers and warehouse workers serving the ports of
Los Angeles and Long Beach plan to strike starting Monday. (Los
Angeles Times)
Optimism among U.S. trucking executives is giving way to a
restrained outlook amid tepid "choppy" shipping demand. (Logistics
Management)
The temporary shutdown of the Port of Charleston over a bomb
scare began with a call from a social media conspiracy theorist. (
New York Times)
The latest round of layoffs at Sears Holding Corp. includes the
president and other senior executives at the retailer's online
operation. (Internet Retailer)
Investment group Jefferies forecast that Maersk Line will
improve its profitability by $2 billion this year, twice the
carrier's own projection. (Shipping Watch)
United Parcel Service Inc. plans to open a $260 million shipping
hub in Plainfield, Ind., by 2019. (WFYI)
Orders for new dry bulk shipping vessels in May reached the
highest level in 14 months. (Lloyd's List)
Kellogg is dropping its direct-store delivery distribution
operation and shifting to a warehouse fulfillment model. (Business
Journals)
Supply Chain Solutions will launch a cargo operation across Lake
Michigan from Milwaukee to Indiana under a designated "marine
highway" program. (Northwest Indiana Times)
Florida-based regional cargo airline Amerijet will start
trans-Atlantic service in 2018, with twice-weekly freighter flights
to Brussels. (Air Cargo World)
U.S. rail shipments of petroleum and petroleum products fell
11.3% in the past week. (Railway Age)
Brazil reported record exports of finished vehicles in May.
(Automotive Logistics)
ABOUT US
Paul Page is deputy editor of WSJ Logistics Report. Follow him
at @PaulPage, and follow the entire WSJ Logistics Report team:
@brianjbaskin , @jensmithWSJand @EEPhillips_WSJand follow the WSJ
Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
June 16, 2017 06:31 ET (10:31 GMT)
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