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By Paul Page 

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United Parcel Service Inc. is suing the European Union's antitrust watchdog over the regulator's 2013 decision to block the package carrier's acquisition of TNT Express. The $2.15 billion suit revives the heated debate over consolidation in the global parcel industry that culminated in FedEx's Corp's purchase of TNT in 2016. The WSJ's WSJ's Natalia Drozdiak writes that deal only happened after the European Commission formally blocked the UPS-TNT deal three years earlier over concerns the overnight-parcel-delivery market would effectively become a duopoly between the combined company and DHL, a unit of Deutsche Post AG. The European Union's second-highest court last year overturned the decision on the basis of procedural missteps by the regulator. UPS is now seeking compensation from the commission for a decision the company says prevented it from "materializing the benefits associated with that proposed transaction."

A dispute over a marine container terminal in East Africa highlights growing international commercial and geopolitical concerns in the region. The nation of Djibouti seized the port facility run by DP World, and the WSJ's Nikhil Lohade and Matina Stevis-Gridneff report the action marks a dramatic step in the tiny country's moves to take stronger control of a strategically important site where the Red Sea and Gulf of Aden meet. DP World, which owns a third of the Doraleh Container Terminal, is fighting the seizure, but some now expect Djibouti's government, which owns the rest of the site, to strike a deal with Chinese investors. China interests already have a foothold in the region: China Merchant Holding Co. backed a $600 million Djibouti marine terminal that opened last year. The tussle reflects the rising importance of the Horn of Africa, which sits along busy seaborne trade lanes and has gained greater significance as major powers seek strategic outposts in the region.

Wool is the new hot commodity in apparel and supply chains are struggling to catch up. A trend that kicked off when wool sneakers from startup Allbirds Inc. became popular in Silicon Valley is spreading, and big brands like Adidas and Under Armour are jumping on board, raising global demand for merino wool, the fine product named for a breed of sheep. The demand is also driving up prices for the fiber, the WSJ's Lucy Craymer reports, while providing a lesson in how sourcing operations built around agriculture and natural materials can't easily turn supplies up and down to follow annual trends. The sheep population in Australia and New Zealand, the world's largest wool exporters, is near a 100-year low after farmers shifted to dairy or higher-yielding crops after prices of wool collapsed in the 1990s. One apparel maker says it may take seven years of breeding to get sheep producing even on farms that already produce the fine merino wool.

ECONOMY & TRADE

American mining companies are getting the lift they've long been waiting for, but it's not coming from new U.S. demand. American companies are shipping far more coal to Europe and Asia, bulking up international supply lines and helping stop a yearslong decline in the number of U.S. mining jobs. Exports of U.S. thermal coal used by utilities more than doubled last year to 42 million tons last year, the WSJ's Kris Maher reports, more than offsetting a steep drop in coal used at U.S. power plants as U.S. energy business moves toward natural gas. The export opportunities come from a tightening of global supply, attractive pricing in Western Europe and greater coal use in developing countries like India. The U.S. Midwest looks to be benefitting the most as miners push volumes by river barge to export sites on the Gulf of Mexico, while ports on the East Coast are often congested and groups block coal export upgrades on the West Coast.

QUOTABLE

IN OTHER NEWS

International trade flows rose 4.5% in 2017, the fastest pace since 2011. (WSJ)

Mexico's economic growth slowed to 1.5% in the fourth quarter, bringing full-year growth to 2%. (WSJ)

Analysts are stumped by the dollar's 11% slide in the past two years against the currencies of major trading partners. (WSJ)

The market for used equipment including railcars, airplanes and trucks is likely to heat up because of changes in U.S. tax law. (WSJ)

The Trump administration levied new sanctions on North Korea that included restrictions on nearly 60 shipping and trading companies. (WSJ)

The chairman of Chinese car maker Zhejiang Geely Holding Group Co. has accumulated a 9.7% stake in Germany's Daimler AG. (WSJ)

Businesses are reporting strong inflationary pressures even as consumers see few price increases. (WSJ)

General Mills Inc. is jumping into the fast-growing natural pet food market by buying Blue Buffalo Pet Products Inc. for $8 billion. (WSJ)

Semiconductor parts supplier Xcerra Corp. and a Chinese state-backed group terminated their merger agreement, citing difficulty in securing federal approval for the deal. (WSJ)

Auto-parts supplier Takata Corp. will pay a $650 million civil penalty to end a probe by U.S. states into its actions surrounding rupture-prone air bags. (WSJ)

KFC's epic U.K. supply chain woes in the U.K. appear centered on DHL's decision to consolidate logistics operations into a single new, untested distribution center. (Financial Times)

Shoe retailer Charlottee Olympia filed for chapter 11 bankruptcy protection and will close all its U.S. stores. (Forbes)

Japan's Yamato Holdings Co. Ltd. is expanding in Southeast Asia, starting a forwarding service for importers and exporters. (Nikkei Asian Review)

General Electric Co.'s transportation unit signed a $1 billion deal to supply 30 freight locomotives to Ukrainian Railways. (Reuters)

Cargill Inc.'s head of shipping wants to see strong penalties against vessel operators that sidestep new environmental rules. (Lloyd's List)

Shippers of refrigerated goods are turning to intermodal rail transport because of tight highway capacity. (Journal of Commerce)

The cost of building an inland container handling station near the South Carolina's Port of Charleston has soared 26% since the project was announced 17 months ago. (Post and Courier)

Container shipping volume at the Port of Charleston tumbled 9.5% in January. (American Shipper)

U.S. antitrust regulators want to halt Wilhelmsen Maritime Services' acquisition of maritime supplier Drew Marine Group. (Maritime Executive)

Chinese startup Tianjin Cargo Airlines will launch service with three Boeing Co. 737 freighters. (Air Transport World)

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 26, 2018 07:03 ET (12:03 GMT)

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