MCD McDonalds Corp

By Paul Page 

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From coal production sites in Appalachia to poultry farms and chemical plants along the eastern U.S. seaboard, companies say they're feeling the pain from deep service problems along CSX Corp.'s troubled freight rail network. Congestion, delays and erratic operations are hitting the railroad from Chicago down to Florida, the WSJ's Paul Ziobro reports, and companies are telling regulators and lawmakers that CSX's problems are undermining their business. One customer, chemical company Chemours, says it slowed production and has been "hanging by a thread" awaiting long-stalled raw materials, and customers including McDonald's Corp. and Kellogg Co. have turned to costlier truck transport. The woes arise from the rapid-fire, rough rollout of new CSX chief Hunter Harrison's effort to streamline operations and set the "precision railroading" that Mr. Harrison touts. The CEO insists CSX is fixing bottlenecks as the company pushes forward on long-term plan, and he's promising bigger improvements next month. But if the problems persist into the fall the calls for regulators to intervene will grow louder.

Imports are hitting U.S. ports in big numbers this summer as retailers stock up with newfound confidence and shipping companies reap the benefits. American ports saw near-record levels of container imports last month, WSJ Logistics Report's Erica E. Phillips writes, in a booming start to the peak shipping season that looks likely to deliver a financial boost to long-beleaguered maritime operators. The coast-to-coast surge is especially heavy in furniture, back-to-school goods and auto parts, trade data service Panjiva says, and it comes along with more reports that U.S. consumers are more confident in the economy. The push to the ports may come from more than the retail consumer market, however. Supply-chain management group Unis Co. says it's seeing a pickup in industrial materials such as those auto parts. That could signal more activity in the manufacturing sector, including plans by companies to ramp up U.S. factory work later in the year.

While most of North America is focused on efforts to rewrite the continent-wide trade pact, the five-year-old agreement between the U.S. and South Korea is coming under fresh debate. The countries wrapped up new talks over their free-trade deal this week, the WSJ's Kwanwoo Jun reports, with the U.S. still insisting the agreement needs to be reworked and Seoul opposing any changes without an objective joint study. Like the talks over the North American Free Trade Agreement, the move on what's known as the Korus FTA is dividing the U.S. business community. Meat exporters and the U.S. Chamber of Commerce like the pact the way it works now. But the American auto and steel industries want a rewrite as they watch heavy loads of imports head into the country. The Trump administration says South Korea is partly to blame for a global glut in steel, effectively positioning Seoul against an industry that's been central to the White House's pitch to industrial America.

ECONOMY & TRADE

All those package carriers hitting the streets may get some side work pushing for a corporate tax rewrite. United Parcel Service Inc. hosted U.S. House Ways and Means Chairman Kevin Brady (R., Texas) at its Louisville, Ky., air hub, the WSJ's Richard Rubin reports, and bolstered the chairman's pitch to rewrite the tax code with a call for employees and customers to join the effort. Beyond a television ad campaign and corporations' roster of Washington lobbyists, companies are trying to rally broader public support for business tax cuts this year, inviting senior lawmakers to their facilities and encouraging workers to contact their members of Congress. UPS Chief Executive David Abney says the company's more than 300,000 workers should understand that a lower corporate tax rate help workers because "it benefits our customer. It will create more packages for us" and create jobs. Labor leaders say workers should be more skeptical, and there are still deep disagreements among businesses and lawmakers about overhauling taxes.

QUOTABLE

IN OTHER NEWS

China's yuan has risen 4% against the dollar since January. (WSJ)

Mexico chalked up its 16th straight quarter of economic growth in the April-to-June period. (WSJ)

Recent share moves on Wall Street suggest investors are giving up on the Trump administration's infrastructure push. (WSJ)

The U.S. is preparing a proposal to let the U.S. withdraw from a corporate arbitration system at the heart of the North American Free Trade Agreement. (WSJ)

LG Electronics Inc. will build a factory in Michigan to make electric car parts. (WSJ)

The U.S. Treasury targeted Chinese coal exporters in new sanctions at companies and individuals it says aided North Korea's nuclear weapons program. (WSJ)

Ford Motor Co. will start a company to make electric cars in China in a joint venture with local auto maker Anhui Zotye Automobile Co. (WSJ)

European antitrust regulators will launch an in-depth look at Bayer AG's $57 billion acquisition of Monsanto Co. (WSJ)

Retailer Kohl's Corp. plans to open a fifth e-commerce fulfillment center and four small-format stores this quarter. (MarketWatch)

Australian mining giant BHP Billiton Ltd. is looking at selling its U.S. oil and gas operations. (WSJ)

Upstart financing firm Affirm Inc. is in talks to offer installment loans through Wal-Mart Stores Inc. (WSJ)

Alevo USA Inc., a North Carolina energy storage startup tied to a Russian billionaire tycoon, filed for bankruptcy. (WSJ)

International Business Machines Inc. signed Tysons Foods Inc., Unilever Plc and other big food and retail companies to its test of blockchain technology in the supply chain. (Reuters)

Tanker operators are scrapping more very large crude carriers this year as spot earnings fall to three-year lows. (Lloyd's List)

The Port of Los Angeles plans to spend $13 million to bring cargo data from its terminals and shipping lines under a single platform. (Daily Breeze)

Canadian National Railway Ltd. carried a record 21.8 million metric tons of grain in the just-ended crop year. (Materials Management & Distribution)

The American Trucking Associations' truck tonnage index rose 0.1% from June to July. (Transport Topics)

Chinese autonomous-truck company TuSimple is setting up a research and testing site in Tucson, Ariz. (Tucson Sentinel)

Blue Apron Holdings Inc. lost its human resources chief, implemented a hiring freeze and fired part of its recruiting team. (Bloomberg)

Indian e-commerce company Paytm will invest $35 million in strengthening its logistics network. (Economic Times)

FedEx Corp.'s ground unit will open a $30 million parcel sorting center in Chattanooga, Tenn., next month. (Chattanooga Times Free Press)

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 23, 2017 06:38 ET (10:38 GMT)

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