Today's Top Supply Chain and Logistics News From WSJ
August 18 2017 - 7:00AM
Dow Jones News
By Paul Page
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Wal-Mart Stores Inc.'s bid to win new sales on two fronts is
proving expensive. The retailer's sales rose at a strong pace both
at stores and online in the latest quarter, the WSJ's Sarah
Nassauer and Austen Hufford write, the latest upbeat report in
what's shaping up as a strong summer for storefronts. Same-store
sales rose 1.8% while e-commerce business soared 60%. But expenses
rose and margins narrowed, a result becoming more familiar to
brick-and-mortar stores as they try to use their real estate more
efficiently while following consumers into the digital world. To
pay for the efforts, the company has used automation to replace
some jobs and pressed suppliers to cut their prices, increased the
fees they pay to pass inventory through warehouses and narrowed the
shipping window suppliers must hit to avoid fines. With overall
inventory flat and inventory at stores open for a year down 3.8%
while sales expanded, it looks like that effort is paying off.
Alibaba Group Holding Ltd. is using its big earnings from online
sales in China to invest in a future beyond its core e-commerce
market. The Chinese e-commerce leader will extend its geographic
reach in the business-to-consumer world by taking part in a $1.1
billion investment in PT Tokopedia, an Indonesian marketplace, the
WSJ's Liza Lin reports, flexing its financial muscle after another
quarter by strongly expanding sales and profits. Alibaba nearly
doubled its net income from a year ago to $2.17 billion and boosted
core e-commerce sales by 58% to $6.3 billion. That business built
on demand from Chinese consumers increasingly is providing the
backing for even more growth. Alibaba's operating margin widened by
seven percentage points, which management attributed in part to
better use of data. That's sending costs as a share of sales down
and, perhaps just as important, helping the company fine-tune the
way it uses data to manage sales and logistics as it expands.
The longtime downturn in oil prices is taking a deeper toll on
energy-related businesses. Seadrill Ltd., one of the world's
biggest offshore drilling companies, is warning creditors of major
losses as part of its $10 billion debt-restructuring plan, the
WSJ's Costas Paris reports, including a financial hit the company
says will likely spread to shipyards. The trouble at the company
controlled by Norwegian shipping magnate John Fredriksen is part of
the broader turmoil hitting drillers and suppliers as crude prices
hovering around $50 a barrel undercut oil's economics. That's left
operators from offshore drillers to tanker owners coping with
overcapacity. Shipping analysts Alphatanker say tanker shipping
rates have been hard hit, with "the distinct potential that they
could plumb depths not seen this decade." The offshore sector has
lost billions of dollars, and Seadrill's survival efforts signal
the waves of red ink will hit companies serving the industry even
harder.
INFRASTRUCTURE
The Trump administration plan to bring business more directly
into planning for infrastructure investment is getting sideswiped
by the controversy over the president's remarks on race. The White
House is pulling the plug on the planned infrastructure council
that was to advise President Donald Trump, the WSJ's Ted Mann
reports, acknowledging the proposed members would come under
pressure not to participate after chief executives from two other
business groups disbanded. There will be little immediate impact
since members of the infrastructure council hadn't even been
appointed beyond the initial word in January that it would be led
by two real estate developers close to Mr. Trump. But the action
throws a new wrench into an infrastructure effort that so far has
been measured in broadly-stated ambitions rather than detailed
plans. The president signed an order this week telling agencies to
speed up reviews of projects, but there's been little movement in
Congress on big questions that would come with new spending.
QUOTABLE
IN OTHER NEWS
U.S. factory output slipped 0.1% in July, the second decline in
three months. (WSJ)
U. S. and South Korean negotiators will meet next week in Seoul
to potentially amend a five-year-old trade agreement. (WSJ)
Japanese exports rose 13.4% in July from a year ago, helped by
automotive business. (WSJ)
U.S. housing starts declined for the fourth time in five months
in July, decreasing 4.8%. (WSJ)
The Wisconsin state assembly approved a controversial $3 billion
tax incentive package for Foxconn Technology Group. (WSJ)
Sears Canada Inc.'s top executive is preparing an offer to save
the bankrupt retailer from liquidation. (WSJ)
Bankrupt shipping-fleet operator Toisa Ltd. asked a judge to
approve voting on a debt-restructuring plan that purports to repay
all creditors in full. (WSJ)
Union Pacific Railroad Inc. will lay off 750 workers, including
about 8% of its management force. (Reuters)
U.S. road and rail shipments declined 3.2% from June to July,
according to the Cass Freight Index. (Logistics Management)
A U.S. manufacturers' group asked the White House to rein back
approval of natural gas exports. (Bloomberg)
CMA CGM SA will offer U.S. exporters shipping pacts through the
New York Shipping Exchange with guaranteed rates and transit times.
(American Shipper)
German investment house Ernst Russ is trying to seize control of
Marenave as the ship owner goes through liquidation. (Lloyd's
List)
Iron ore shipments on the Great Lakes rose 68% from a year ago
in the reporting period ending July 31. (Northwest Indiana
Times)
Roadrunner Transportation Systems Inc. is selling its Unitrans
subsidiary to Quick International Courier as it sheds operations
outside its core trucking. (Business Journals)
Pre-tax profit at Nippon Express jumped 24% to $145 million in
the Japanese freight forwarder's fiscal first quarter. (The
Loadstar)
Singapore's exports of electronic products soared 16.8% in July.
(Straits Times)
FedEx Corp. named 35-year company veteran Mark Allen as its
general counsel. (Post & Parcel)
The Port of Los Angeles is reviewing security after a suspected
car thief drove onto a container terminal and climbed a large
gantry crane. (Los Angeles 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
August 18, 2017 06:45 ET (10:45 GMT)
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