Today's Logistics Report: Walmart Delivering Sales; Shipping Out Poultry; Pulling Forward Under Armour
November 15 2019 - 10:33AM
Dow Jones News
By Paul Page
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Walmart Inc.'s fast-growing e-commerce strategy increasingly
runs through its grocery business. The retail behemoth's e-commerce
sales soared 41% in the latest quarter, the WSJ's Sarah Nassauer
reports, leading a strong period that saw same-store sales overall
grow 3.2% and pushes the company into the holidays with an upbeat
outlook for consumer demand. Groceries gave Walmart the biggest
boost in online business, backing up investments that include
growing home delivery and a push toward a subscription service to
compete more directly with Amazon.com Inc. Walmart has been
resetting its broader e-commerce strategy and selling some of its
specialized online acquisitions, however, and it's unclear how some
of the remaining digital brands are doing. Groceries probably
provide the best chance to compete with Amazon because Walmart is
the country's biggest grocer, but expanding delivery services for
other consumer goods could prove more expensive.
ECONOMY & TRADE
There's finally some positive news in U.S.-China trade, even if
it's only for one commodity. China is lifting a more than
four-year-old ban on U.S. poultry imports, the WSJ's Josh Zumbrun
reports, in what an industry group says could lead to sales of some
$2 billion of poultry. American poultry had been banned in China
since 2015 following an outbreak of avian influenza, and
negotiators have discussed lifting the ban in ongoing trade talks.
The ban has cost American poultry producers a major market,
particularly for specialized products like chicken feet, which are
called "paws" in the U.S. meat industry and were sold in big
batches for Chinese consumers. China has been looking for more
protein sources since an outbreak of African swine fever has
decimated homegrown pork stocks, and the decision on chicken could
provide some goodwill in the U.S.-China trade talks.
SUPPLY CHAIN STRATEGIES
Under Armour Inc.'s long history of hitting big sales targets
may have had more to do with manipulating its supply chain than
reaching consumers. The sports apparel company leaned on retailers
to take products early and shifted contract terms for shipments,
the WSJ's Khadeeja Safdar and Aruna Viswanatha report, pulling
business from future quarters to mask slowing demand for the
company's athletic apparel. Federal investigators are investigating
the company's revenue recognition, a probe the U.S. Attorney's
office in Baltimore is now coordinating with a civil securities
fraud investigation by the U.S. Securities and Exchange Commission.
The questions go to the heart of business relationships between
suppliers and retailers that can sometimes become a tug-of-war over
shipments, inventory and the high-stakes accounting behind supply
chains. One former employee says it was common to pull forward
orders to book revenue, but "once this starts it doesn't seem to
stop."
QUOTABLE
IN OTHER NEWS
A.P. Moeller-Maersk AS's third-quarter profit jumped 31% to $520
million but revenue slipped and the company cut its outlook for the
container shipping business. (WSJ)
The Bank of Mexico cut interest rates by a quarter
percentage-point. (WSJ)
OPEC lowered its oil production growth forecast for non-cartel
countries for 2020. (WSJ)
House Speaker Nancy Pelosi says Democrats and the Trump
administration are moving toward a deal on a renegotiated trade
agreement with Canada and Mexico. (WSJ)
Democratic presidential candidate Joe Biden is proposing a plan
to spend $1.3 trillion on U.S. infrastructure over the next decade.
(WSJ)
Sales of plant-based milk products have grown 6% in the U.S. in
the past year while cow-milk sales have declined 3%.
(MarketWatch)
Toray Industries is halting production of key components for a
passenger plane Mitsubishi Aircraft Corp. is developing for global
markets. (Nikkei Asian Review)
U.S. imports of footwear from China fell 8.6% in September while
footwear imports from Vietnam rose 11.1%. (Sourcing Journal)
U.S. exports of wood pellets rose 18.7% in the first nine months
of 2019 from a year ago. (Biomass Magazine)
The California Trucking Association is suing the state over its
sweeping new labor law involving independent-contractor workers.
(Associated Press)
Navistar Inc. says the strike against General Motors Corp. cost
the truck manufacturer about $140 million in revenue. (Commercial
Carrier Journal)
Civil unrest in Chile spread to the country's ports as
dockworkers went on strike. (Maritime Executive)
Maritime insurer TT Club says incidents of fires on container
ships have doubled in frequency this year. (Lloyd's List)
India's Adani Ports and Special Economic Zone Ltd. trimmed its
outlook on decelerating shipping volumes. (LiveMint)
Michigan-based auto parts supplier Meritor Inc. named Dan
Crabtree vice president for its global supply chain. (Automotive
Logistics)
The Port of Oakland named interim executive director Danny Wan
to the position on a permanent basis. (American Shipper)
ABOUT US
Paul Page is editor of WSJ Logistics Report. Follow the WSJ
Logistics Report team: @PaulPage , @jensmithWSJ and @CostasParis.
Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
November 15, 2019 10:18 ET (15:18 GMT)
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