JBHT J B Hunt Transport Services Inc

By Paul Page 

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Trucking companies are piling up big revenue growth in a resurgent U.S. economy while they try to keep costs from growing just as fast. Analysts expect rising driver pay and disruptions from September's big storms to weight on third-quarter results for truckload carriers, WSJ Logistics Report's Jennifer Smith writes, even as manufacturing activity expands and retailers appear to be restocking inventories at a rapid pace. J.B. Hunt Transport Services Inc. highlighted the market's whipsaw impact in its just-released earnings, reporting net profit fell 8.2% in the September quarter despite an 8.9% boost in revenue. Stronger demand and hurricane-relief efforts have left capacity tighter and shipping rates higher, but some fleets are struggling to find drivers. They're competing for workers in a tight labor market where construction and energy jobs also beckon, and some companies are boosting pay and recruiting incentives before they've secured broader rate increases with shippers. They're betting that if they can get the revenue sooner the profits will quickly follow.

Here's a real page-turner for the logistics world: books are back in vogue, and publishers want to speed up supply chains to catch new readers. With e-book sales declining and consumer-book sales growing after a decade of technological upheaval cut into publishing revenues, executives at top companies say they are done relying on new formats. Instead, the WSJ's Zeke Turner writes, publishers are returning to fundamentals while streamlining business to get books to the market faster than ever. Books are among the array of products that have thinned out in consumer distribution channels in an increasingly digital world, and the return to growth will put more demand on trucking and warehousing that serves the market. But the need for speed, driven in part by rapid changes in the political world, will put new demands on logistics. With publishers pushing to get big sellers to readers sooner, shipping will have to get more nimble and move more quickly through or even around distribution centers.

Steel is pushing back against aluminum in auto manufacturing supply chains. Auto makers are using new varieties of lighter, stronger steel in new models like Honda Motor Co.'s Ridgeline pickup truck and General Motors Co.'s Chevrolet Malibu sedan, the WSJ's Bob Tita writes, as the business reverses a years-long move away from the metal to take the weight off cars with more flexible aluminum and other light materials like carbon fiber. Steel has always been cheaper and stronger than aluminum, but the weight of conventional steel has worked against tougher fuel economy requirements. New products are changing calculations, however, and ArcelorMittal N.V. now expects auto makers' global demand for press-hardened steel sheet, which is strong and malleable for complex stamped parts, to grow 36% by 2020. That's shifting industrial supply chains. Arcelor Mittal is opening the third U.S. plant of its kind in Detroit this year to produce the new generation of lightweight, super-strong sheets prized at auto factories.

SUPPLY CHAIN STRATEGIES

Natural-gas producers have built formidable supply chains to deliver their product around the world except for one key component: the demand side. Energy companies are trying to establish new markets for liquefied-natural gas, a version of the fuel that can be easily shipped, the WSJ's Sarah McFarlane reports, after erecting big export infrastructure only to see LNG prices sink on global markets since 2014. Producers now are promoting LNG for industrial trucking and shipping, and they're considering building power plants and infrastructure in developing markets such as South Africa and Vietnam. LNG demand has been growing, largely because it is inexpensive and technological innovations cut the cost of building import terminals. But many countries don't have the infrastructure to distribute large amounts of gas. Investing in the demand side carries bigger risks for producers, however, bringing consumers that one expert notes are "less creditworthy, less experienced, less organized, and politically less predictable."

Tractor-trailers are put together for transporting food not cooking it, but that means nothing when you're a truck driver on the road and crave some jambalaya. That's why trucker Micheal "Boomer" Welch found that canned chicken and tomato sauce and a cut-up Slim Jim could help bring a waft of his Louisiana home to his rig at a snowed-in Wyoming truck stop. Mr. Welch is part of a small but highly discerning fleet of chefs on the road, WSJ Logistics Report's Jennifer Smith writes, motivated by thrift, health and creative attention to gustatory concerns to turn their rigs into mobile kitchens. The trucker-chefs whip up meals with cookers and crockpots that plug into the cigarette lighters of their cabs. And they swap recipes online and compete in virtual contests like the "Chopped Challenge" run by Big Truck Cooking, a 12,600-member Facebook group. They're helped by more goods at truck stops aimed at cooking and a growing field of more experienced and healthier drivers.

QUOTABLE

IN OTHER NEWS

Spending at U.S. retailers jumped 1.6% last month, boosted by higher car sales and gasoline prices in the wake of several hurricanes. (WSJ)

U.S. consumer prices rose 0.5% in September, mostly due to higher fuel costs. (WSJ)

A measure of U.S. consumer sentiment rose swiftly in the first half of October to its highest level since 2004. (WSJ)

Exports of goods from the eurozone jumped 2.5% in August despite the euro's appreciation. (WSJ)

China boosted its crude oil imports by roughly 1 million barrels a day in September. (WSJ)

General Motors Co. reached a tentative agreement with the union representing factory workers who have been on strike for nearly a month at an SUV plant in Canada. (WSJ)

Sears Canada Inc. won court approval to hold going-out-of-business sales to begin liquidation of 130 stores starting this week. (WSJ)

South Korea's finance minister says Seoul should diversify its trade relations beyond the U.S. and China. (WSJ)

Glencore PLC has a standstill agreement temporarily preventing it from making a hostile bid for Bunge Ltd., raising the possibility it will renew efforts to acquire the grain trader. (WSJ)

U.S. business inventories rose 0.9% in August in the largest gain this year. (CNBC)

Maersk Line expects to trim about 11% of the Hamburg Sud workforce as it integrates the German container line. (Lloyd's List)

CSX Corp. plans to scale back operations at its North Baltimore, Ohio, hub, a linchpin of its i ntermodal strategy. (Trains)

Couriers for U.K. delivery company Hermes say they are being pressured to work for 20 straight days in the runup to Christmas. (The Guardian)

Amazon.com Inc. is extending its U.K. expansion with the addition of a distribution center in Bolton, in northwest England. (Reuters)

U.S. safety regulators shut down Pyle Transportation, an Iowa-based trucker tied to fatal immigrant deaths in Texas. (Cedar Rapids Gazette)

Qatar Airways launched Boeing 777 freighter service to Pittsburgh on a route starting in Doha. (American Shipper)

Yusen Logistics Co. Ltd. won halal certification in Indonesia, part of an effort to expand in a fast-growing region with a large Muslim population. (Nikkei Asian Review)

Bashar Obeid resigned as chief financial officer of Dubai-listed logistics company Aramex. (Al Bawaba)

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

October 16, 2017 06:47 ET (10:47 GMT)

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