UPS United Parcel Service

By Paul Page 

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Pricing competition is already breaking out in the parcel world well before this year's holiday shipping season. FedEx Corp. came out with its new surcharges for the peak delivery period, and the carrier is taking a sharply different path than rival United Parcel Service Inc. FedEx is raising charges, but the WSJ's Paul Ziobro reports the operator is focusing its increases on the weight and size of shipments, adding hefty penalties for oversize boxes and odd-shaped goods that fall outside the company's handling guidelines. UPS, by contrast, is basing new surcharges on the timing of shipments, making it more expensive to deliver to homes around the peak periods. Both companies are trying to manage the surge of e-commerce shipments that strains operations and profit margins, and UPS with its surcharge strategy aims to convince retailers to spread out shipments. FedEx is gambling it can cover the extra costs of a demand spike while ensuring that bigger shipments pay a hefty price for slowing down operations.

A new generation of robots is heading into warehouses with a new message for workers: we want to collaborate, not compete. Several automation companies are designing robots meant to work alongside people rather than to completely replace manpower, WSJ Logistics Report's Jennifer Smith writes, a sign that strategies for using robotics in warehouse operations are evolving as the technology develops and companies get more experience in using it on a daily basis. The new robots being deployed by companies including Deutsche Post AG's DHL, Quiet Logistics Inc. and RK Logistics Group are small and relatively cheap mobile machines that move alongside humans and help them work more efficiently. Robotics firms pitch them as a way to boost productivity during busy times, such as the holidays, when extra labor is harder to find. That's not as ambitious as automating an entire warehouse, of course, but developers say the lower cost makes them easier to insert into existing operations -- and find the common ground between robots and humans.

Alibaba Group Holding Ltd.'s new pact with luxury conglomerate Kering Co. comes laden with significance beyond any goods it may bring to online marketplaces. Kering, whose brands include Gucci and Saint Laurent, is dropping its lawsuit against Alibaba over the sale of counterfeit goods on Alibaba's websites, the WSJ's Matthew Dalton and Liza Lin report, adding to an ongoing rapprochement between the luxury industry and China's e-commerce companies. Key high-end retailers are cautiously agreeing to sell through China's online platforms, pushing aside concerns about China's unruly counterfeiting industry using these websites to peddle fakes. Just this week, Saint Laurent said it would sell over the internet in China for the first time through a partnership involving JD.com, China's second-largest online retailer. Under its deal with Alibaba, Kering will take part in a "joint task force" aimed at pursuing counterfeiters, at step toward what Kering's brands hope will be the pursuit of more sales in China.

SUPPLY CHAIN STRATEGIES

Retailer Uniqlo is trying to put its clothing in front of customers in the real world without investing in more brick-and-mortar stores. The apparel seller owned by Fast Retailing Co. is rolling out vending machines at several airports and shopping malls that will dispense Uniqlo's apparel to people who may need a quick addition to their outfits, the WSJ's Khadeeja Safdar reports. It's part of a retooled expansion after the company stumbled in its early efforts to move into the U.S., and the latest sign of imaginative strategies retailers are undertaking to find consumers without investing in big storefronts. Many retailers are looking for a middle-ground between physical stores and moving entirely online, and some like Best Buy Co. have already turned to vending for some staples. Clothing marks a new frontier, and Uniqlo will cope with added complications in its distribution channels, including delivering goods to the sites, tracking the inventory and dealing with those returns.

QUOTABLE

IN OTHER NEWS

Toyota Motor Corp and rival Mazda Motor Corp. plan to build a $1.6 billion factory in the U.S. by 2021 that would create 4,000 jobs.(WSJ)

Orders for heavy-duty trucks in the U.S. rose 5% from June to July. (WSJ)

Inflation in the Group of 20 largest economies fell in June to its lowest level in almost eight years. (WSJ)

China is urging the Trump administration to back off plans for tough trade actions, warning that conflict would hurt both sides. (WSJ)

Drug giant Teva Pharmaceuticals Industries Ltd. slashed its outlook amid growing competition, leadership woes and difficulties in a sprawling supply chain built through acquisitions. (WSJ)

Tesla Inc. may issue new debt this year as efforts to ramp up production of its Model 3 sedan drain cash reserves. (WSJ)

Amazon.com Inc. says its new 260,000-square-foot distribution center outside Melbourne is "just the start" of its expansion in Australia. (The Australian)

An Australian court fined Nippon Yusen Kabushiki Kaisha, or NYK Line, nearly $20 million for colluding with other carriers to fix prices for shipping cars. (Sydney Morning Herald)

Mercedes-Benz Trucks will start using 3D printing to produce spare and replacement truck parts. (Fleet Owner)

Uber Technologies Inc. expanded the geographic reach of its Uber Freight truck load-matching app. (Heavy Duty Trucking)

DHL Supply Chain is expanding its use of "smart glasses" for warehouse workers in its world-wide operations after completing a test of the devices. (Supply Chain Digital)

Teekay Tankers Ltd. swung to a $7.1 million net loss on a steep decline in revenue in what it called an oversupplied global tanker market. (Lloyd's List)

U.S. ethanol inventories are near an all-time high. (Omaha World-Herald)

Australia's IFM Investors bought a 40% stake in Turkey's Mersin International Port from Akfen Holding. (Daily Sabah)

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. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Write to Paul Page at paul.page@wsj.com

(END) Dow Jones Newswires

August 04, 2017 06:51 ET (10:51 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.