Today's Top Supply Chain and Logistics News From WSJ
November 17 2017 - 07:08AM
Dow Jones News
By Paul Page
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Wal-Mart Stores Inc. thinks it's in position to gain ground
against Amazon.com Inc. The world's biggest retailer posted its
strongest quarterly U.S. sales growth in nearly a decade, picking
up momentum for a strategy aimed at finding customers in both its
brick-and-mortar stores and online. The WSJ's Sarah Nassauer
reports that e-commerce sales at Wal-Mart, which has made a series
of acquisitions in online retail, jumped 50% and are on track to
reach $17.5 billion this year. That's still a fraction of overall
revenue, and analysts say Amazon's sales are 10 times greater than
Wal-Mart's online business. But with Wal-Mart's digital business
growing and Amazon moving more deeply into physical stores, the
companies increasingly look like they are competing on similar
ground. Wal-Mart is still trying to maintain its profit margins as
it builds up logistics for online fulfillment, a question that may
grow more important at Amazon as it seeks to blend distribution
operations for online and store operations.
Talks on redrawing North America's trade map are resuming under
a cloud of pessimism. Working-level teams for the U.S., Canada and
Mexico are convening in Mexico City starting today, but the WSJ's
William Mauldin, Dudley Althaus and Paul Vieira report that top
trade officials are staying home, highlighting the difficult state
of the North American Free Trade Agreement talks. Mexico and Canada
are still digesting contentious U.S. proposals like stricter rules
for the proportion of a vehicle's components that must originate in
North America and in the U.S. to avoid tariffs. Freight transport
concerns also are reaching the table, with the U.S. looking to pull
back a Nafta provision that allows Mexican trucks to operate in the
U.S. The American Trucking Associations has asked the Trump
administration to maintain the program, but the Teamsters union
opposes it. The countries have said they want to complete talks by
March, but delays deeper into next year could make an agreement
less likely.
Tesla Inc.'s new heavy-duty electric truck is supposed to go 500
miles on a single charge, assuming the vehicle can get traction in
the trucking world. Tesla Chief Executive Elon Musk revealed the
company's first all-electric truck along with a new $200,000 super
car late Thursday, the WSJ's Tim Higgins reports, in his latest
attempt to stir excitement for his vision to upend transportation.
The Semi, due out in 2019, will join a highly ambitious automotive
supply chain that has stumbled in its bid to ramp up mass-market
production. The truck has sleek, bullet train-like cab designed for
wind resistance and is equipped with Tesla's semiautonomous driving
system to assist drivers and that will allow the trucks to travel
autonomously in convoys with the company's other big rigs. Without
giving the sticker price, Mr. Musk says the semi would be cheaper
to operate than a diesel truck and possibly -- using the autonomous
technology -- even less expensive than rail.
MANUFACTURING
The sweeping changes in the business of generating power are
triggering an upheavalin the industrial sector. German electrical
engineering giant Siemens AG is the latest behemoth in the business
to respond to the upheaval by looking for ways to get smaller, the
WSJ's Zeke Turner and William Boston, moving to cut its global
workforce by 2% while tackling overcapacity in core units that
provide gigantic turbines, industrial motors and other heavy
equipment. The actions follow General Electric Co.'s moves this
week toward a sweeping restructuring ahead of what the company
calls a "reset year." The companies have been caught off-guard by a
rapid shift by governments and companies away from large, fossil
fuel-powered plants to renewables. Siemens says demand for its
biggest turbines has fallen dramatically and orders for large
electrical motors for industries from mining to steel and
shipbuilding are also tumbling. The declines are so big they
suggest the industrial sector overall is being reset.
Emerson Electric Co. is driving to consolidate the world of
industrial automation. The company is ratcheting up efforts to take
over Rockwell Automation Inc., the WSJ's Dana Cimilluca, Andrew
Tangel and Bob Tita write, sweetening its buyout offer and raising
the pressure on its rival to come to the negotiating table. Emerson
is pushing ahead on the idea that it can get cost savings and
better openings in the factory sector by creating a new powerhouse
in the production of equipment and software used to control
automated manufacturing processes. Analysts estimate that market is
worth some $200 billion as companies increasingly look to simplify
factory-control processes and for an offering that integrates
equipment and software. Automation systems broadly have been a
sweet spot for industrial investment as customers look for more
efficiency from existing plants and as manufacturing becomes more
automated and digital.
QUOTABLE
IN OTHER NEWS
The U.S. House passed a bill that would sharply lower the
corporate tax rate and transform the U.S. system for taxing
multinational corporations. (WSJ)
U.S. manufacturing output jumped 1.3% in October, in a strong
post-hurricane recovery. (WSJ)
The number of Americans filing new applications for unemployment
benefits rose for the second straight week. (WSJ)
Canadian manufacturing shipments unexpectedly rose in September
despite a steep decline in auto business. (WSJ)
South Korea's won reached its strongest level against the dollar
since September 2016. (WSJ)
Best Buy Co. is stepping up discounting and shipping offers
after weak sales growth left the retailer with more inventory than
expected. (WSJ)
Calvin Klein is bypassing department stores and selling new
underwear only on Amazon.com Inc. this holiday season. (WSJ)
Volkswagen AG and its Chinese partners will invest nearly $12
billion by 2025 developing electric cars for the local market.
(WSJ)
Amtrak recorded its lowest operating loss in decades this year
on rising ridership and revenues. (WSJ)
A retail industry group says Bangladesh factories have made
strong progress in improving safety standards for workers.
(Sourcing Journal)
Shanghai Pharmaceuticals Holding Co is buying Cardinal Health
Inc's China drug distribution business. (Reuters)
Canadian grocer Loblaws is closing 22 stores and launching an
internet-based home-delivery service. (CBC)
Tight aviation capacity is pushing freight forwarders to charter
aircraft for peak-season shipping. (Air Cargo News)
Chinese regulators said several state-owned port authorities
must rein back what they called anti-competitive practices that
raise shipping costs. (Lloyd's List)
Florida's Port of Jacksonville is building a terminal for
handling automobiles. (American Shipper)
Embattled Hong Kong commodities trader Noble Group is stepping
up talks with lenders in a bid to avoid restructuring. (Splash
24/7)
Hong Kong authorities are weighing plans to place condominiums
on podiums above the port's busiest container terminal. (South
China Morning Post)
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
November 17, 2017 06:53 ET (11:53 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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