Today's Top Supply Chain and Logistics News From WSJ

Date : 05/19/2017 @ 7:11AM
Source : Dow Jones News
Stock : Wal-Mart Stores, Inc. (WMT)
Quote : 86.22  0.0 (0.00%) @ 6:29AM

Today's Top Supply Chain and Logistics News From WSJ

Wal Mart Stores (NYSE:WMT)
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By Brian Baskin 

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Wal-Mart Stores Inc. may have solved a problem that's so far eluded most of its competitors: how to draw new customers to both its website and its stores. While rivals like Target Corp. are reporting sagging sales and declining foot traffic, Wal-Mart's same-store revenue rose 1.4% in the first quarter, the WSJ's Sarah Nassauer and Anne Steele report. The gains complement a 63% surge in U.S. e-commerce sales, and indicate that the company's strategy of investing both in store improvements and online operations is starting to pay off. Those efforts include a campaign to reduce inventory in stores that has placed additional pressures on suppliers. Wal-Mart is also blurring the lines between its e-commerce and brick-and-mortar businesses by encouraging customers to pick up online orders in stores. One problem Wal-Mart hasn't cracked: how to boost sales without sacrificing margins. Profits were down 1.3% in the first quarter, as spending on stores and technology rose, and the company cut prices on some goods to fend off competitors.

General Motors Co. may be closing car dealerships in India, but the company plans to keep its supply chain in the country intact. GM has made little headway in India's fast-growing auto market, selling about as many cars there in a year as it does in just a few days in the U.S. The company has found more success in tapping India's cheap labor market, operating an assembly plant in Maharashtra that tripled production volume to 53,000 vehicles in 2016 - or nearly double the number sold in India. The plant, plus a design and engineering center in Bangalore, will remain open even after GM halts sales, the WSJ's Mike Colias writes. By contrast, GM is selling its manufacturing capabilities in South Africa, another country where it plans to end sales in order to focus on core markets like the U.S., China and South America. The retrenchment also comes as GM spends hundreds of millions of dollars on developing self-driving cars and other technology to stay ahead of new competitors emerging in Silicon Valley.

CSX Corp. executives say their newly installed CEO's health problems aren't slowing his efforts to modernize the railway. Chief Executive Hunter Harrison has at times relied on a portable oxygen machine, raising questions among investors about his stamina as he works to overhaul CSX's operations, the WSJ's Paul Ziobro writes. Mr. Harrison has only been in the job for 10 weeks, but he has already pushed through major changes, such as closing "hump yards," where trains roll downhill to be steered toward their next destination. CSX's chief financial officer says that trains are already moving faster and arriving on time more frequently - and that Mr. Harrison has been "equally blunt and equally as effective" with or without supplemental oxygen. But some investors are worried about Mr. Harrison's long-term ability to run the company. That's complicating a June 5 shareholder vote on whether to pay him $84 million to replace the pay package he forfeited by leaving his previous job at the helm of Canadian Pacific Railway Ltd.

ECONOMY & TRADE

Plenty of trucking startups pitch themselves as the "Uber for freight." Now they'll have to contend with Uber Technologies Inc. itself. The ride-sharing company has publicly launched its app, which allows shippers and truckers to arrange freight transportation using their smartphones. Uber joins a field crowded with numerous startups, which say they're cheaper, more-convenient alternatives to traditional freight brokers. Uber's track record in software and managing data will help, but the company will likely need to undercut the commission taken by brokerages to gain significant market share, Ryan Petersen, founder of shipping startup Flexport, tells Wired. Many online freight booking services say they're seeing explosive growth, albeit from low levels. Much of that business comes from small shippers, however, and Silicon Valley has yet to show it can make inroads with big retailers and manufacturers that make up traditional brokers' core customers.

QUOTABLE

IN OTHER NEWS

The Trump administration told Congress it will launch formal talks to renegotiate the North American Free Trade Agreement. (WSJ)

International Business Machines Corp. ordered thousands of remote workers to relocate to regional offices or leave the company. (WSJ)

Japan's economy expanded for a fifth-straight quarter, fueled by booming manufacturing exports. (WSJ)

The Conference Board's index of leading economic indicators rose for a fourth month in April. (WSJ)

Alibaba Group Holding Ltd. reported a 60% jump in fiscal fourth-quarter revenue from a year earlier. (WSJ)

Tesla Inc. has leased the largest-ever warehouse in the San Francisco Bay area. (Inbound Logistics)

The Port of San Francisco is seeking a new bidder to save one of its last remaining shipyards. (San Francisco Examiner)

The Port of Charleston, which recently received the largest-ever container ship to stop on the East Coast, is exploring ways to attract even bigger vessels. (Post and Courier)

Royal Mail PLC reported stronger profits as its growing logistics business offset fading parcel revenue. (MarketWatch)

Global Logistic Properties' fourth-quarter profit surged as asset values rose. (Straits Times)

U.S. East Coast and Gulf Coast ports i ncreased their share of Asian imports. (Journal of Commerce)

Qantas Freight won a contract with China Post to fly airmail between China and the U.S. (Air Cargo News)

Air carriers are tacking on fuel surcharges, raising concerns with forwarders. (The Loadstar)

Daimler opened an $18.7 million "proving ground" in Oregon to test autonomous trucks, platoons and other technology. (Commercial Carrier Journal)

KeepTruckin, a startup that helps truckers digitize driving logs and other information, raised $18 million in a funding round. (Reuters)

U.S. rail traffic rose 5.7% in the week ended May 13 compared with a year earlier. (Progressive Railroading)

San Francisco is considering a ban on sidewalk delivery robots. (SFGate)

ABOUT US

Brian Baskin is editor of WSJ Logistics Report. Follow him at @brianjbaskin, and follow the entire WSJ Logistics Report team: @PaulPage, @jensmithWSJ and @EEPhillips_WSJ and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Write to Brian Baskin at brian.baskin@wsj.com

 

(END) Dow Jones Newswires

May 19, 2017 06:56 ET (10:56 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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