Today's Top Supply Chain and Logistics News From WSJ
March 29 2017 - 7:16AM
Dow Jones News
By Paul Page
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Amazon.com Inc. is placing one of its biggest bets yet on the
global e-commerce arena . The company is buying into the Middle
East with its acquisition of Dubai-based Souq.com, the WSJ's
Nicolas Parasie reports, buying into the region's small but
expanding online shopping market . Amazon didn't give a value but a
banker familiar with the deal said it was worth around $700
million. Amazon has been spending heavily on expanding its global
footprint but doesn't often snap up companies as large as Souq.com.
Amazon's move sets up a potentially fierce battle with regional
real-estate billionaire Mohamed Alabbar, who plans to launch a $1
billion e-commerce platform called Noon this spring. Online sales
in the Persian Gulf region are still small compared with more
mature markets, but Amazon is entering on the cusp of what analysts
say will be a period of rapid e-commerce growth.
The drive for warehouse space is hitting record levels in
Europe, and the demand can be traced back to Seattle. Amazon has
become a major force in a European logistics real-estate sector
that is being reshaped by online shopping, the WSJ's Art Patnaude
reports. In the U.K. alone, the Seattle-based online retail giant
accounted for nearly a quarter of all warehouse property space
leased last year. Experts say the rush by Amazon and others to find
capacity is drawing in more real-estate investors. While Europe's
overall commercial real-estate investment fell last year,
industrial and logistics volumes rose 7.3% to a record $27.24
billion, says CBRE. The key is the growing demand for rapid
delivery as online sales grow in Europe's dense population zones as
well as smaller towns that typically are far from the sprawling
distribution centers.
Investment cash seems to be flowing into the logistics sector.
Shipping technology startup Freightos raised $25 million in a new
funding round led by General Electric Co.'s GE Ventures, WSJ
Logistics Report's Erica E. Phillips writes, the second big
infusion this week for a logistics tech operation. The funding for
Israel-based Freightos follows a $25 million Series A funding round
this week for Silicon Valley startup Turvo, which hopes to use
software to make it easier for shippers to track and manage their
goods across the supply chain. Freightos wants to use the new cash
to expand its booking and pricing-information platform, and provide
its software to freight forwarders for their back-office functions.
In both cases, investors like the focus on technology in a global
business. PitchBook Data Inc. says venture capital money flowing
into the logistics sector has grown from $60 million in 2013 to
nearly $200 million a year ago.
TRANSPORTATION
Freight rail consolidation is underway in North America, but
it's not happening with the major railroads. Mexican mining and
railroad company Grupo Mexico SAB is buying Florida East Coast
Railway Holdings Corp., the WSJ's Anthony Harrup reports, in a $2.1
billion deal that will give the Mexican company a 351-mile railway
with operations in Florida that reach into the U.S. southeast.
Jacksonville, Fla.-based FEC runs trains through the ports of
Miami, Everglades and Palm Beach, and has agreements that connect
with lines that carry cargo as far as Dallas, Atlanta and
Charlotte. Grupo Mexico, which operates Mexico's Ferromex and
Ferrosur railways, says the business will complement its operations
in Texas. The acquisition will need regulatory approval before
closing, a step that may prove more than a speed bump if the Trump
administration flags the deal while it considers negotiating a new
North American Free Trade Agreement.
Freight railroads probably shouldn't load up on new coal car
orders just yet. The Trump administration is rolling back President
Barack Obama's signature climate-change policies. But the WSJ's
Cassandra Sweet writes that is unlikely to reverse the U.S. utility
industry's shift to natural gas, solar and wind as leading sources
of electricity even if it may extend the life of some aging
coal-fired power plants. Cheap U.S. natural gas has prompted many
companies to scrap older coal plants in favor of gas-fired plants,
which require fewer workers to operate, and many utilities say
their investments are being driven by economic as well as
regulatory forces. The changing energy picture has had a dramatic
impact on freight rail networks, even with double-digit gains in
coal traffic this year. Coal shipments were up 15.5% in the first
two months of 2017 from last year, but that was still just shy of
30% below the coal volume the railroads hauled five years ago.
QUOTABLE
IN OTHER NEWS
A measure of U.S. consumer confidence reached its highest level
in 16 years. (WSJ)
Home prices in the U.S. rose in January at their fastest rate
since mid-2014. (WSJ)
Wal-Mart Stores Inc. is exploring ways to better integrate its
Walmart Pay system with its mobile shopping app. (WSJ)
Ford Motor Co. detailed $350 million in investment in three
Michigan factories, much of it under a commitment in a 2015 labor
agreement. (WSJ)
China's Tencent Holdings Ltd. bought a 5% stake in Tesla Inc.
(WSJ)
Aviation parts supplier Aerospace Holdings Inc. filed for
chapter 11 bankruptcy protection and is looking for a buyer for its
aircraft parts business. (WSJ)
Offshore drilling contractor Ocean Rig UDW Inc. filed for
bankruptcy protection to block distressed debt investors from
interfering with a restructuring to slash $3.7 billion in debt from
its books. (WSJ)
Nippon Cargo Airlines canceled orders for two Boeing Co. 747-8
freighters. (Business Journals)
Emirates Airlines will return two leased 747 freighters as it
shrinks cargo operations in a weak shipping market. (The
Loadstar)
Pratt & Whitney is building replacement aircraft engines
after up to 42 engines were removed from new Airbus Group SE
A320neo jets because of problems. (Bloomberg)
European exporters say they are seeing sharply reduced capacity
to Asia as container lines adjust services under new alliances.
(Maritime Executive)
CMA CGM SA and PSA International are doubling the capacity of
the container terminal they jointly operate at the Port of
Singapore. (Straits Times)
Canadian National Railway Co. started operating intermodal
trains through Minnesota's Duluth Seaway Port. (Duluth News
Tribune)
U.K. business recruiter Bis Henderson Group says it has seen an
upturn in supply-chain executive recruitment since the Brexit vote.
(SHD Logistics)
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 and follow the WSJ
Logistics Report on Twitter at @WSJLogistics.
Subscribe to this email newsletter by clicking here:
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Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
March 29, 2017 07:01 ET (11:01 GMT)
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