Today's Top Supply Chain and Logistics News From WSJ
October 04 2017 - 6:55AM
Dow Jones News
By Paul Page
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America's top investor is placing a long-haul bet on trucking.
Warren Buffett's Berkshire Hathaway Inc. is taking a nearly 40%
stake in the operator of Pilot and Flying J travel centers, the
WSJ's Nicole Friedman writes, and plans eventually to take control
of a business Mr. Buffett says is tied to the intractable need to
move more goods "to more people." It's the latest investment in
traditional transportation at Berkshire, which also owns BNSF
Railway, and marks an indirect move into the trucking business that
the Knoxville, Tenn.-based family-owned Pilot Travel Centers LLC
serves. Still, the deal seems to run counter to big changes
percolating in the business: Some analysts project massive growth
in electric and autonomous vehicles, which would cut into the fuel
sales that provide Pilot Flying J more than $20 billion in annual
revenue. Pilot Chief Executive Jimmy Haslam expects "diesel fuel
will power trucks for a long time to come," however, giving the
operator a steady business tapping into shipping growth.
Europe is getting more expensive for Amazon.com Inc. and the
e-commerce giant has barely expanded its business there. European
Union antitrust regulators are moving aggressively to retrieve
several hundreds of millions of euros in allegedly unpaid taxes
from Amazon, the WSJ's Natalia Drozdiak and Sam Schechner report,
as Brussels cracks down on sweetheart tax deals that governments
have granted to multinationals. The move against Amazon is over
taxation in Luxembourg that was set in a 2003 tax deal with Amazon,
one that regulators believe amounts to illegal state aid. The case
highlights the complicated efforts multinationals are undertaking
to rein in costs even as they expand internationally. That's a big
concern for Amazon as it looks to bulk up its presence in the U.K.
and spread out across Europe. The French newspaper Le Monde
reported this week the company is looking for acquisitions and
partnerships in France, including physical locations and deals with
distributors.
American eating habits aren't keeping up with pork production.
U.S. meatpacking plants are sending record numbers of hogs to
slaughterhouses this year, the WSJ's Benjamin Parkin and Jacob
Bunge report, pushing pork futures down nearly 40% since the middle
of the summer. Wholesale prices for pork bellies are off over 50%
since July and retail prices are sliding as American consumption
falls behind supply. It's the latest example of agriculture
production spinning beyond market demand, and the big supply
imbalance carries heavy stakes because farmers and meatpackers are
depending on selling abroad. Pork exports rose 11% in the first
seven months of 2017 and a fifth of the pork produced in the U.S.
this year will be exported as companies sell to countries like
Mexico and South Korea where demand is growing. Those shipments
depend on politically vulnerable trade agreements, however, and
U.S. agriculture can figure prominently when tough trade talk gets
more contentious.
SHIPPING OUTLOOK
Retailers are projecting a robust holiday shopping season but
the wealth won't be spread around equally. The National Retail
Federation forecasts sales will grow between 3.6% and 4% in
November and December from a year ago, the WSJ's Sarah Nassauer
reports, a rosy outlook in line with outlooks from Deloitte,
AlixPartners and RetailNext Inc. Retailers certainly have been
bringing in goods with confidence: The NRF says imports at major
gateways in its Global Port Tracker report reached the highest
volume ever in July, and loaded inbound volume at the Port of Los
Angeles grew by more than 15,000 containers from July to August.
The broad retail figures belie an industry in turmoil amid big
changes in shopping and distribution, however. The NRF predicts
"nonstore sales" -- online business -- will grow up to 15% this
season. Several big chains have filed for bankruptcy protection
this year, while others have closed hundreds of weaker stores, a
trend likely to push even more sales online.
QUOTABLE
IN OTHER NEWS
U.S. auto sales set the briskest monthly pace for the year in
September, growing 6.1% year-over-year. (WSJ)
Wal-Mart Stores Inc. is buying New York same-day delivery
startup Parcel. (Associated Press)
Sears Canada Inc. is on the verge of liquidation under actions
in bankruptcy court. (WSJ)
Glencore PLC will invest nearly $1 billion in a Peruvian zinc
operation as rebounding commodity prices refill the miner's
coffers. (WSJ)
More companies looking for more cost savings are centralizing
their procurement decisions. (WSJ)
Google parent Alphabet Inc. says Uber Technologies Inc. knew a
former Google engineer had confidential files before buying his
self-driving truck startup Ottomotto. (WSJ)
A backlog of relief supplies at Puerto Rico's main port is
easing as trucks get better access to distribution centers.
(CNBC)
Spot rates to ship sea containers from Asia to Europe and the
U.S. are sinking despite the crush of holiday-season orders.
(Nikkei Asian Review)
A gauge of factory employment in Europe rose at the fastest pace
since 1997. (Bloomberg)
Low water levels and other problems are slowing barge traffic on
U.S. rivers, triggering higher shipping rates. (AgWeb)
North Carolina's transport chief says electric-car sales and
improving fuel efficiency may cut state gas-tax collections
markedly by 2021. (Associated Press)
Pennsylvania is considering ending a longtime tax break for
warehouse operations. (PennLIve)
Third-party logistics provider NFI Industries bought port
trucker California Cartage Co. (DC Velocity)
Ace Hardware Corp. bought a controlling stake in e-commerce
startup The Grommet. (Chicago Sun-Times)
A group representing ship operators says shippers and forwarders
must do more to ensure invasive species don't get into shipping
containers. (Lloyd's List)
Dubai's Drydocks World is invoking local rules to restrict
payments to creditors ahead of its sale to terminal operator DP
World. (Splash 24/7)
The U.S. is reviving a complaint over limits on imported wine in
Canada's British Columbia province. (BBC)
U.S. ethanol producers are fighting new tariffs Brazil is
imposing on imports of the fuel. (Omaha World-Herald)
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
October 04, 2017 06:40 ET (10:40 GMT)
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