AMZN Amazon.com Inc

By Paul Page 

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The Trump administration's infrastructure push is beginning. President Donald Trump is set to unveil a program today that aims to transform the way the nation's infrastructure is funded and developed, but the WSJ's Rebecca Ballhaus and Ted Mann report the initiative faces an uncertain road in Congress over finding the money to pay for it. Mr. Trump will propose spending $200 billion in federal funds over 10 years, most of which will come in the form of grants that encourage states and cities to raise their own funds for improving infrastructure. The plan will also expand the size and scope of existing federal loan programs for building rails, airports, highways and water systems. There's no agreement on where the initial new funding comes from, however, and the recent two-year spending deal that Congress agreed to may complicate things. Analysts say that could relieve pressure on lawmakers to produce a big infrastructure initiative this year, even as shipping groups try to keep the pressure on.

Amazon.com Inc. may be facing its most difficult and expensive delivery yet. The online behemoth faces a steep uphill climb in reaching the scale of FedEx Corp. and United Parcel Service Inc. as it begins to roll out a "Shipping with Amazon" operation that seems to set Amazon on a path to creating another U.S. national package shipping giant. The WSJ's Laura Stevens, Jennifer Smith and Paul Ziobro report it would require tens of billions of dollars in investment, including thousands of trucks, hundreds of planes and far more sorting centers to deliver packages for other retailers and consumers at a national scale. Amazon generated around 1.2 billion shipments last year domestically, but most of those were delivered by the U.S. Postal Service, UPS and FedEx. The company isn't talking about how it plans to execute its ambitious logistics plan. Amazon could start buying equipment, of course, or it could seek to accelerate its delivery push by buying a company already in the business.

Maersk Line wants to get more digital and more profitable. The container-shipping unit of A.P. Moeller-Maersk A/S wants to raise freight rates and cut its operating costs, the WSJ's Costas Paris and Dominic Chopping write, after reporting sharp swings in earnings at operations during what it termed "an eventful year." The shipping line had a $48 million profit for the last quarter, a big swing from a $146 million loss the year before but also a step back from earnings earlier in the year. The world's biggest container shipping line saw growth in freight prices slow late in the year. The volatile pricing environment has Maersk looking to tighten control of its costs, and turn more aggressively toward the digital world as it seeks to become a bigger player in end-to-end supply chains. The company is hinting at more acquisitions, and its interest in technology suggests its interest in expansion may not be limited to adding vessels on the water.

TRANSPORTATION

The big winners in rising U.S. shipping prices may be the freight middlemen. Financial results from third-party brokers that connect shippers to trucking fleets show revenues and profits turning sharply upward, the WSJ's Erica E. Phillips reports, as growing economic demand and tight capacity sends companies rushing to find shipping space. C.H. Robinson Worldwide Inc., Echo Global Logistics and XPO Logistics Inc. are among companies reporting strong growth in brokerage business, a turnabout for some of the freight operators after lackluster business in a stagnant U.S. economy. They're benefiting from the resurgent shipping demand that has squeezed capacity across domestic distribution channels and has left shippers willing to pay more to find ways to keep their goods moving. The scarce truck space appears to be driving recent gains in intermodal rail volume, likely a factor in a 33% boost in fourth-quarter operating profit at Hub Group Inc. and a strong rise in the intermodal specialist's gross margins.

The turnaround in raw materials prices is bringing pain to U.S. factories. Rising costs for the basic building blocks of industry production -- including steel, aluminum, copper and resin -- have manufacturing companies weighing whether they can pass higher prices along the supply chain or accept lower profit margins. The WSJ's Andrew Tangel, Harriet Torry and Heather Haddon report the rising commodity prices come as companies also face pressure to raise wages, adding to production expenses. Companies including Caterpillar Inc. and Ford Motor Corp. have said rising material costs are having an impact on their business. Food companies are contending with escalating costs for staples, and distributor Sysco Corp., saw overall food inflation of more than 3% during its most recent quarter. The rising commodity costs should help long-foundering bulk carriers. Analysts Alphabulk says orders for bulk ships are starting to rise, but the order book for the vessels remains at its lowest level relative to the fleet since the early 2000s.

QUOTABLE

IN OTHER NEWS

The Canadian economy shed 88,000 jobs in January and the unemployment rate ticked up to 5.9%. (WSJ)

Apollo Global Management plans an initial public offering for Ceva Logistics as early as April. (New York Post)

Ant Financial Services Group, the Chinese technology giant affiliated with Alibaba Group Holding Ltd., is seeking up to $5 billion in a new funding round. (WSJ)

A Russian plane crashed outside Moscow shortly after takeoff, killing all 71 people on board. (WSJ)

Fresh tension between the European Union and the U.K on Brexit talks threatens to delay progress on an agreement over a transition period. (WSJ)

China National Petroleum Corp. entered the country's first long-term contract to import U.S. liquefied natural gas. (WSJ)

Uber Technologies Inc. settled a lawsuit with Alphabet Inc.'s Waymo over claims that Uber stole self-driving vehicle trade secrets in its purchase of trucker Otto. (WSJ)

European chemical group Umicore is putting another $800 million toward new factories to make components for electric-car batteries. (WSJ)

The U.S. Department of Agriculture expects farm incomes to fall 7% to $60 billion in 2018 on lower crop and livestock revenue. (WSJ)

L.L. Bean is dropping its unlimited-returns policy. (WSJ)

Tesla Inc. expects to have 100,000 orders for its electric Semi truck by 2022, or about a third of the U.S. market. (Commercial Carrier Journal)

Deliveroo is considering an initial public stock offering that would value the U.K.-based food-delivery service at around $2 billion. (Times of London)

Shipments at the U.S. Postal Service Shipping and Package division rose 7% in the quarter ending Dec. 31. (Logistics Management)

Japanese retailers and technology companies are striking partnerships to withstand Amazon's growth in the country. (Nikkei Asian Review)

Amazon is scaling up its Brazil business with investment in a 540,000-square-foot Sao Paulo distribution center. (Reuters)

Harbor trucking companies around the U.S. are finding little resistance to new price increases. (Journal of Commerce)

Los Angeles city planners approved a Prologis Inc. warehouse project over strong objections from nearby residents. (Daily Breeze)

Dollar General Inc. began construction of a one million-square-foot distribution center in eastern Texas. (Longview News-Journal)

Walmart Inc. is taking over operations at an Indiana distribution center from DHL Supply Chain. (Indianapolis Star)

Bain Capital is battling a European consortium for control of debt-laden bulk carrier Giuseppe Bottiglieri Shipping Co. (Splash 247)

A recent breakdown of a cargo ship serving Alaska demonstrated the state's fragile perishables supply chains. (Anchorage Daily 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 , @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

February 12, 2018 06:43 ET (11:43 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.