UPS United Parcel Service

ByPaul Page 

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Holiday shopping and shipping is about to get more expensive. United Parcel Service Inc. is adding a surcharge onto most online orders around the Black Friday weekend and the week before Christmas, the latest move by package carriers to recoup the big investments they make in peak-season deliveries and the higher costs that come with e-commerce business. The surcharge is a first for UPS, and the WSJ's Paul Ziobro writes that it's among the growing add-on charges that have retailers facing the prospect of either eating the higher costs or passing them along by raising prices. The explosion in online shopping has created a kind of tug-of-war between parcel carriers and retailers over the thinner margins and added complications of delivering goods to homes. The new UPS charges will apply only to the busiest shopping days, and only to residential deliveries. That may push retailers to scale up strategies like in-store pickups of online purchases, something it appears UPS would also like to see.

Blue Apron Holdings Inc. is pushing forward an initial public offering just as food delivery is getting big new attention, but it's unclear whether that will help the startup. The WSJ's Ezequiel Minaya reports the company is at the center of a growing meal-kit delivery business that is carving into sales of traditional grocery stores as consumer change their food-buying habits. With shares expected to price between $15 and $17, Blue Apron is going public just as Amazon.com Inc. is plunging into the grocery business, raising big new questions both for legacy supermarkets and startups. Amazon's entry could change the game for companies like Blue Apron and Instacart that have used new technology and refined logistics to pioneer new paths for food delivery. Blue Apron has gained nearly $800 million in annual revenue so far, but the debt and losses also are growing, and well-funded competition from Amazon could make profits even harder to deliver.

Amazon's surprise deal to buy Whole Foods Market Inc. could speed up efforts to bring more digital tools like data analytics to supply chains. Gartner Inc. chief forecaster John Lovelock tells the WSJ's Angus Loten the "notoriously short shelf life" of food may push Amazon to put its technology to work across Whole Foods' distribution channels, from warehousing to deliveries and other logistics areas. That will give Amazon another area to test its ability to tie analytics to more sophisticated, data-driven marketing strategies. Many big grocers already are implementing new tools to more closely align inventory management and marketing. Kroger Co. has started using cameras and infrared sensors to track foot traffic in its stores, and the company is testing sensor-laden interactive shelves that can detect shoppers in the aisles via their smartphones and provide personalized pricing and product suggestions as they shop.

E-COMMERCE

Alibaba Group Holding Ltd. is trying to get U.S. entrepreneurs to help flip the script on U.S. trade with China. In a two-day event in Detroit, Alibaba chairman Jack Ma is offering an expected 3,000 U.S. small-business owners tips on how to market and ship wares to Chinese consumers. It's part of an increasingly urgent competition between Alibaba and Chinese rival JD.com to tap into the U.S. market, the WSJ's Liza Lin and Laura Stevens report, and to corral customers that are starting to move away from the big sites and toward niche e-commerce providers. To do that, Alibaba will have to convince sellers it's conquered its problem with counterfeits. The U.S. last year reinstated Alibaba's Taobao site to a list of "notorious" marketplaces for fakes, and some U.S. exporters say they've lost business to cheaper, Chinese-made knockoffs. Still, American sellers will be tempted by China's $771 billion online retailing market, which is larger than the U.S. market.

QUOTABLE

IN OTHER NEWS

U.S. new-home construction fell 5.5 % in May, the third straight monthly decline. (WSJ)

Japan's exports jumped 14.9% in May, the strongest jump since January 2015. (WSJ)

The unemployment rates in California and six other states fell to record lows last month. (WSJ)

The U.K. and the European Union concluded their first day of negotiations over Britain's departure from the bloc. (WSJ)

General Motors Co. will eliminate a shift at a sedan plant in Kansas City, Kan., laying off about 1,000 people. (WSJ)

Cruise Automation, the startup owned by GM, is creating a mapping business, a move that could help the auto giant in the race to develop self-driving vehicles. (WSJ)

A new generation of aerospace startups is disrupting the attention to traditional operators at this year's Paris International Air Show. (WSJ)

Boeing Co. lifted its annual 20-year forecast for plane deliveries to 41,030 jetliners with a value topping $6 trillion at list prices. (WSJ)

Auto hauler and logistics provider Jack Cooper has reached a deal with bondholders to restructure more than $400 million in debt. (WSJ)

Three years after the price of crude began its rapid descent, the oil industry and investors are finally resigned to the idea of lower prices for a long period. (WSJ)

EQT Corp. agreed to buy Rice Energy Inc. for $6.7 billion, the latest proposed tie-up between energy producers after low oil prices roiled the industry. (WSJ)

Striking truck drivers picketing at the ports of Los Angeles and Long Beach caused some traffic delays but operations continued normally at cargo terminals. (Los Angeles Daily News)

Auto supplier Robert Bosch GmbH will build a $1.1 billion semiconductor plant in Dresden, Germany to meet surging demand for components for self-driving vehicles. (Bloomberg)

The chief executive of China's JD.com says drones and other robotics technology should help parcel carriers pare their logistics costs. (CNBC)

German shipping investment group MPC Container Ships plans to expand its holdings to 50 vessels and seek a public stock offering in New York. (Lloyd's List)

DAT says U.S. truckload spot market volume rose 7.3% in May to its highest level since September 2015. (DC Velocity)

Diesel fuel prices in the U.S. dipped to the lowest level in six months. (Commercial Carrier Journal)

More luxury fashion brands are buying farms to have better control of their supply chains. (Business of Fashion)

Egypt will buy 100 new multi-use locomotives from General Electric Co. for $575 million to upgrade its rail network. (Reuters)

DHL Express will buy four more A330-300 passenger-to-freighter conversions from ST Aerospace subsidiary Elbe Flugzeugwerke. (Air Cargo News)

The share of sellers who use Fulfillment by Amazon is growing in all countries where Amazon offers the service for its marketplace users. (Ecommerce 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 , @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 20, 2017 06:47 ET (10:47 GMT)

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