Today's Top Supply Chain and Logistics News From WSJ
October 18 2017 - 5:56AM
Dow Jones News
By Paul Page
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Amazon.com Inc. knows where you live and wants to move in. The
e-commerce giant has won commitments to install delivery-locker
systems in thousands of properties across the U.S., many of them
before this year's peak holiday shopping season. The WSJ's Laura
Kusisto writes that several of the nation's largest apartment
operators have signed on so far to a plan that could help Amazon
consolidate its control over how goods make it from distribution
centers to the front door. It would help apartment managers cope
with a major problem: the surging pile of boxes that flood lobbies
as online sales grow. If it works, the program called Amazon Hub
would shift how apartment operators deal with packages, and give
Amazon an alternative to bringing goods straight to doors or to
remote locations for pickup. It also would give Amazon the cost
benefits that parcel carriers strive for by delivering big loads of
packages to a single destination
CSX Corp. says it's just a matter of time before it wins backs
frustrated industrial shippers. Chief Executive Hunter Harrison
issued the upbeat assessment as the freight railroad hit profit
projections for the third quarter, the WSJ's Paul Ziobro, despite a
slim 1% gain in revenue that showed erratic service was taking a
toll on its business. An increase in pricing helped railroad boost
earnings slightly to $459 million even as volumes in key
commodities such as chemicals, automotive and agriculture fell.
Some of those carload declines are likely the result of service
problems that sent some customers rushing to trucks and, where
possible, competing rail to keep orders flowing and factories
running. That hasn't thrown Mr. Harrison off his push toward
"precision railroading," and the steady profitability will also
help keep the plan on track. Once service is restored, he says,
customers will come back "immediately."
The U.S., Canada and Mexico won't finish updating the North
American Free Trade Agreement this year and the countries suggest
there are big hurdles in getting an agreement next year. Officials
pointed to "significant conceptual gaps" in ending a round of
meetings that the WSJ's Jacob M. Schlesinger and William Mauldin
report has stoked a growing fear among Nafta supporters that the
discussions may prove futile, and the end result could be the death
of the 23-year-old pact. The countries pushed off the next talks
into November, and officials pointed to progress in less
controversial areas such as customs, trade facilitation and digital
trade. But Mexican and Canadian officials say items such as U.S.
demands for "national content" in automobiles are have created
steep divisions. Canada's foreign minister says the provision
"would severely disrupt" supply chains for cars and auto parts and
likely would violate global trade rules.
SUPPLY CHAIN STRATEGIES
A battle over leverage is building up in pharmaceutical supply
chains. Impax Laboratories Inc. and Amneal Pharmaceuticals LLC
agreed to merge in a deal that that would create the nation's
fifth-largest generic-drug company by revenue, the WSJ's Jonathan
D. Rockoff and Dana Cimilluca report, putting the combined business
in a better position to tackle changing distribution channels for
generic drugs. The merger comes as wholesalers and retailers are
teaming up to become increasingly powerful forces in moving
generics in the $84 billion market. Those operators have formed
three "buying groups" that are so large they have been able to
squeeze generic-drug makers in negotiations. That's led to falling
prices for generic drugs and cut out some smaller manufacturers.
The new Amneal Pharmaceuticals will consolidate some production and
cut costs, but the bigger gain may be the extra bulk to negotiate
with the growing behemoths that distribute and sell the
lower-priced copies.
Wal-Mart Stores Inc. says its direct competition with Amazon is
only just starting. The retailer's U.S. e-commerce chief Marc Lore
says the company is looking at ways to expand "in every sector"
after an acquisition spree brought in a string of trendy e-commerce
startups, the WSJ's Laura Stevens reports, suggesting the buying
binge is not over. Wal-Mart trails rival Amazon in online market
share, but Mr. Lore told The Wall Street Journal's WSJ D.Live
technology conference that a network of thousands of stores that
can serve as hubs for online orders and distribution give the
retailer a "second-mover advantage." Wal-Mart is shifting its focus
from adding new physical stores to scaling up digital business, and
it's projecting that e-commerce sales will grow 40% in its next
fiscal year. The company is building up its distribution capability
while locked in a battle with Amazon over minimum prices for
discounted delivery.
QUOTABLE
IN OTHER NEWS
U.S. industrial production rose 0.3% in September while factory
output expanded just 0.1%. (WSJ)
New Jersey is offering Amazon $7 billion in tax incentives to
place its second headquarters in Newark. (WSJ)
The Trump administration reversed efforts to make it easier for
farmers to challenge meatpackers over pricing and allegations of
uncompetitive practices. (WSJ)
Volvo Cars unveiled its first high-performance electric car in
Shanghai, in a direct challenge to Tesla Inc. (WSJ)
The Haynesville Shale, a giant natural-gas field in northwest
Louisiana, is roaring back to life after a lull while drillers
looked to Texas. (WSJ)
The U.K. government is moving to extend its powers to block
foreign acquisitions of British companies that threaten national
security. (WSJ)
Peter Bellew became the third chief executive to quit Malaysia
Airlines Bhd since 2014. (WSJ)
Harley-Davidson Inc. cut its forecast for world-wide motorcycle
shipments by 6% to 8% after seeing revenue slide 10% in the third
quarter. (WSJ)
Technology-focused trucking startup Convoy struck a deal to
handle more shipments for Anheuser-Busch. (Forbes)
Industrial parts distributor W.W. Grainger closed 40 branches in
Canada in the third quarter. (Industrial Distribution)
Container imports at South Carolina's Port of Charleston rose
6.9% year-over-year in September. (Charleston Post and Courier)
Shipping line Hapag-Lloyd raised $414 million from the sale of
11.7 million new shares. (Journal of Commerce)
Exports out of Hong Kong International Airport soared 14%
year-over-year in September. (Air Cargo News)
India's Mahindra Logistics won a regulator's approve to launch
an initial public offering. (Economic Times)
Japanese carrier K-Line and Chilean logistics operator Agunsa
formed an automotive logistics company, KAR Logistics. (Automotive
Logistics)
South Korean police are seeking an arrest warrant for Hanjin
Group Chairman Cho Yang Ho following a probe into use of company
funds for construction work at his house. (Reuters)
Gabon's Port of Owendo opened a $300 million container and
multi-use cargo terminal. (Port Technology)
China's COSCO (Dalian) Shipyard delivered its first deep-sea
underwater vessel to Maersk Supply Service. (Xinhua)
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 18, 2017 05:41 ET (09:41 GMT)
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