CP Canadian Pacific Kansas City Limited

By Paul Page 

Sign up: With one click, get this newsletter delivered to your inbox.

CSX Corp. isn't the only freight railroad trying to win back shippers following the service-slashing leadership of the late Hunter Harrison. Canadian Pacific Railway Ltd. is turning to a charm offensive to woo customers back to its fold after many felt alienated by the hard-nosed style of Mr. Harrison, who led CP before moving to CSX last year. The WSJ's David George-Cosh and Paul Ziobro write that Mr. Harrison's efforts to impose a "precision railroading" strategy across operations are still widely applauded for transforming the railroads he headed, improving profits and boosting share price. But the approach also was partly responsible for CP losing lose some key shipping contracts to its bigger rival Canadian National Railway Co., pushing down revenue even as the railroad's operating ratio improved. CP CEO Keith Creel, who took over from Mr. Harrison, has been crisscrossing the U.S. and Canada to meet customers, assuring them that operations are changing along with improved relationships with shippers.

Labor isn't easing up its push against the independent-driver model in port trucking. A new lawsuit filed on behalf of three truck drivers is taking aim at a subsidiary of XPO Logistics Inc., and seeks class-action status in a case alleging the business denies drivers wages and benefits because they are wrongly classified as independent contractors instead of employees. It is the latest in a series of action aimed at trucking companies that haul goods at Southern California ports, WSJ Logistics Report's Jennifer Smith writes, including a suit last month by the city of Los Angeles targeting three trucking firms over the practice. The lawsuit filed Monday in Los Angeles says XPO Logistics Cartage LLC and a predecessor firm, XPO Cartage Inc., repeatedly misclassified drivers. The case targets lost wages, but it also addresses broader issues in trucking operations that include lengthy, unpaid periods waiting for loads that are coming under more scrutiny under California's labor laws.

New U.S. sanctions aimed at North Korea provide a kind of warning shot for the shipping world. The U.S. issued an advisory on shipping practices along with new restrictions on dozens of North Korean shipping and trading companies as part of an offensive on the country's nuclear weapons and ballistic missile programs. The State Department warning goes well beyond the North Korean operators, the WSJ's Samuel Rubenfeld writes, saying an array of shipping businesses risk sanctions if they help support Pyongyang's attempt to evade restrictions. That includes insurers, flag registries, financial institutions and other shipping companies that may work in operations with the targeted companies. The idea, says one legal expert, is to "make North Korean shipping radioactive" by ensuring that companies have too much to lose if they work with the country in the sometimes turbulent world of Asia-Pacific.

TRANSPORTATION

Seadrill Ltd. is getting help from big shipbuilders in the troubled offshore energy company's bid to stay afloat. Samsung Heavy Industries Co. Ltd. and Daewoo Shipbuilding & Marine Engineering Co. agreed to set aside for now contracts together accounting for about $1 billion in potential claims against Seadrill, allowing the new rigs to be marketed for sale. The WSJ's Peg Brickley writes the peace with the shipyards comes as the company run by Norwegian billionaire John Fredriksen quells opposition to its bankruptcy exit plan by making room for more creditors to invest in getting Seadrill back on its feet. The company has staggered under a downturn in the energy business that left it saddled with some $8 billion in debt. Mr. Fredriksen, who had negotiated immunity from lawsuits over his handling of the company's affairs in the original turnaround strategy, remains protected from litigation, and there won't be any move against some $23 million in salaries and bonuses paid to high-ranking company leaders.

QUOTABLE

IN OTHER NEWS

Sales of new homes in the U.S. fell 7.8% in January, the fourth decline in the past six months. (WSJ)

Manufacturing growth across Texas accelerated this month. (WSJ)

Qualcomm Inc. says it is getting closer to negotiating a buyout of fellow semiconductor maker Broadcom Ltd. (WSJ)

French auto parts maker Faurecia SA say it will take a financial hit if the U.S. pulls out of the North American Free Trade Agreement. (WSJ)

FedEx Corp. says it is keeping its discounts to National Rifle Association members as several companies leave the NRA's list of supporting companies. (Memphis Commercial Appeal)

Slowing smartphone sales are hitting the earnings of parts suppliers that have bet heavily on electronics. (Nikkei Asian Weekly)

U.S. and Canada customs officials are testing a plan to pre-inspect cargo at factories and other sites in the host country to speed cross-border trade. (Automotive News)

BAIC Motor Corp. and Daimler AG plan will build a $1.9 billion factory in China as the German automaker deepens its ties there. (Industry Week)

Royal Dutch Shell expects international liquefied natural gas transport to double by 2035. (Lloyd's List)

The Eurasian Rail Alliance plans to expand its rail container service connecting China and Europe this year. (Splash 24/7)

Shippers are reporting unprecedented delays in intermodal services moving through Chicago. (Journal of Commerce)

Logistics provider Geodis says productivity doubled at its Indianapolis warehouse serving an apparel retailer after installing robots. (WWD)

Ship broker Braemer ACM says new shipping operations using big oil tankers from the U.S. will provide benefits to refiners in Asia. (Bloomberg)

Krone Commercial Vehicle opened a 400,000-square-foot parts distribution center in northwest Germany to serve an area from Scandinavia to Turkey. (Logistics Manager)

Walmart Inc. is launching a standalone online bedding brand. (New York Times)

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 27, 2018 06:06 ET (11:06 GMT)

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