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By Erica E. Phillips 

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China's economic stumbles are reverberating more strongly across global supply chains. Consumers in the world's second-largest economy are spending less on discretionary goods and big-ticket items, the WSJ reports, as costs for basic necessities are soaring. That's hitting global behemoths like Apple Inc., which roiled markets this week with word that declining smartphone sales in China contributed to a sharp falloff in revenue. China's e-commerce titans Alibaba Group Holding Ltd. and JD.com Inc. are hitting speed bumps as consumer spending drops. Apple's components suppliers have already been reporting weaker results as demand has tapered off, and the company's warning suggests orders may pull back even further. And that signals other companies focused on selling and moving goods in China may also start feeling financial pain.

Sometimes those container imports just can't wait to get ashore. A Mediterranean Shipping Co. vessel lost 270 boxes in rough waters in the North Sea, the WSJ Logistics Report's Costas Paris writes, highlighting a rare but nagging side effect of the world's big ocean trade flows. Geneva-based MSC hired a salvage company to handle the spill, retrieving cargo from the sea and on Dutch island beaches where many of the containers made landfall. Container spills are quite rare in the ocean shipping business, with less than 1,600 containers lost at sea annually on average, of more than 130 million shipped -- about one thousandth of 1%, according to the World Shipping Council. Still, the industry is working on safety measures to reduce losses further, such as verifying container weights and establishing standard practices for loading containers onto ships.

TRANSPORTATION

Private-equity investors are gliding into the airfreight business. KKR & Co. is buying six widebody freighters for $1 billion, the WSJ's Doug Cameron reports, to launch a joint-venture aircraft leasing business with Seattle-based Altavair LP. KKR is entering the cargo segment as e-commerce companies including Amazon.com Inc. are building out their airfreight operations -- a move that has drawn the attention of other investors, too. KKR said it's taking a 50% stake in Altavair and may acquire additional assets beyond the initial six freighters, and may even even splurge on new planes. The firm is jumping into the business amid signs that a boom in airfreight demand appears to be tapering off. Research group WorldACD says November global air cargo volume fell 1.4% from a year ago, and broke from usual patterns by declining 2% from October to November.

The U.S. auto industry is showing signs of stalling. General Motors Co.'s U.S. sales fell nearly 3% in the fourth quarter, the WSJ's Adrienne Roberts writes, as weak business in sedans offset GM's gains in the SUV market. U.S. automakers sold a total of about 17.2 million vehicles in 2018, defying earlier predictions of a downturn, but the outlook for 2019 isn't optimistic as interest rates rise and more consumers are looking to used cars. Escalating trade tensions with China, which imported $13 billion in vehicles from the U.S. in 2017, could also drive down U.S. vehicle production. GM said closing several North American factories and laying off thousands of workers, and automotive supply chains already look to be thinning: The Association of American Railroads says U.S. and Canadian automotive rail shipments fell 4.5% in November.

The U.S. factory sector is signaling far fewer goods are heading into distribution channels. The Institute for Supply Management's manufacturing index declined last month at its steepest rate since 2008, the WSJ's Sharon Nunn and Nick Timiraos write, indicating manufacturing expansion is coming at a slower rate heading into 2019. Growth of new orders and production also slowed sharply, while inventories and imports declined, signaling that U.S. companies are through with their pre-tariff stockpiling. U.S. imports from China hit record levels last year as many companies pulled forward orders to get ahead of impending levies on those goods. "Inventories, rather than foreign trade (imports and exports), were the trigger for these less-buoyant readings," IHS Markit economist Michael Montgomery said.

QUOTABLE

IN OTHER NEWS

The U.S. private sector added 271,000 jobs last month. (WSJ)

The number of Americans filing new applications for unemployment benefits rose by 10,000 last week. (WSJ)

A measure of factory activity in China's manufacturing sector hit its lowest level in three years. (WSJ)

Copper prices are sliding on worries over economic growth in China. (WSJ)

General Motors Co. and DoorDash Inc. are partnering on a food delivery service using autonomous vehicles. (WSJ)

Retailer FullBeauty Brands Inc. is filing for bankruptcy. (WSJ)

Edward Lampert's ESL Investments Inc. has offered $1.8 billion for Sears Holdings Corp.'s real estate. (WSJ)

Bristol-Myers Squibb Co. is acquiring cancer-drug maker Celgene Corp. for about $74 billion. (WSJ)

The American Trucking Associations says the driver turnover rate tumbled 11 percentage points in the third quarter. (Logistics Management)

The Teamsters appealed a federal ruling that U.S. law preempts California's meal-and-break rules for truckers. (Commercial Carrier Journal)

California officials warned warehouse operators against contracting with trucking firms that have violated state wage laws. (The Press-Enterprise)

Patrick Fuchs and Martin Oberman were confirmed to the U.S. Surface Transportation Board. (Progressive Railroading)

A shortage of railcars led to a decline in shipments last month at state-owned Coal India. (Nikkei Asian Review).

Norfolk Southern Corp. is adding automated equipment at its terminals in Chicago and Memphis. (Container News)

A.P. Moeller-Maersk A/S container maker Maersk Container Industry will shut down a China factory as it focuses on refrigerated equipment. (Shipping Watch)

The U.S. Coast Guard doubled the number of workers that maritime companies will have to submit to random drug tests. (Lloyd's List)

Ocean container shipping rates from China to the U.S. West Coast have fallen for seven straight weeks. (Lloyd's Loading List)

Russia granted control over the Arctic Northern Shipping Route to state-run nuclear group Rosatom. (Splash 247)

Extreme weather in the Arctic brought about by climate change has made shipping conditions there more dangerous. (Financial 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 Erica E. Phillips at erica.phillips@wsj.com

(END) Dow Jones Newswires

January 04, 2019 11:15 ET (16:15 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.