Today's Top Supply Chain and Logistics News From WSJ
September 14 2016 - 7:12AM
Dow Jones News
By Paul Page
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The beginning of the end may be underway at Hanjin Shipping Co.
The fire sale of the shipping line's fleet has started with the
sale of three bulk carriers, the WSJ's Costas Paris reports, as the
South Korean government is signaling strongly that it won't bail
out the troubled company. Hanjin had been chartering the three
ships, one a cape-size dry bulk vessel and the others smaller
commodities carriers, and the operator's recent bankruptcy left the
ship owners with a troubling prospect that now confronts other
charter companies. An analyst says the companies can either try to
place the vessels on the spot market at lower rates or dump them at
a discount. With more than two-thirds of Hanjin's fleet chartered,
ship owners including Danaos Corp., Navios Maritime Partners LP
will face similar questions. South Korea's president, Park
Geun-hye, dismissed suggestions that the government may offer
Hanjin a financial lifeline, saying that's just "lazy thinking."
That means Hanjin will have to raise money from its existing
investors or by selling the ships that it owns to get through the
coming weeks.
The global shipping industry rout is taking a heavy toll on
German investors. The country's banks and individuals are such big
backers of shipping that they now own about 29% of the world's
container ship capacity, more than the investors of any other
country. The weakness in the industry, highlighted by the ongoing
collapse of Hanjin Shipping, has left many of those investments
underwater, the WSJ's Friederich Geiger reports. The research firm
Deutsche Fondsresearch estimates that almost one-fifth of the 2,200
ships owned by the funds are insolvent, and the group says no fresh
money from bankers or investors is in sight. One fund established
in 2007 with a forecast that it could double the value of
investments within 20 years has instead plummeted 95%, with no
payouts to participants. The impact may be felt across the shipping
industry as some funds collapse and some seek emergency sales of
vessels to raise cash, actions that will undermine the values of
fleets and some more ships to scrapyards.
The fate of national rules requiring electronic logging devices
on trucks may rest with a federal appeals court. The largest
independent truckers group in the U.S. is asking an appellate panel
to throw out the Department of Transportation requirement, due to
take effect at the end of next year, that drivers install devices
that log their hours behind the wheel. Lawyers for the Owner
Operator Independent Drivers Association told judges in Chicago
that the devices known as e-logs would violate the privacy of
millions of drivers, the WSJ's Kelsey Gee reports, and make
highways less safe by giving employers data to push drivers to stay
on the road longer. Trucking customers are watching the outcome
closely because of widespread belief that shining a light on
driving hours will cut shipping capacity by sidelining drivers who
reach their work limits.
SUPPLY CHAIN STRATEGIES
The world's largest furniture retailer is thinking outside the
big box. IKEA says it has opened more click-and-collect locations
this year than traditional stores, a big shift in the company's
strategy and a stark sign of the impact e-commerce is having on the
retail business. Chief Executive Peter Agnefjäll tells the WSJ's
Saabira Chaudhuri that IKEA is undertaking a "total conversion"
from a brick-and-mortar retailer to a multichannel seller "with the
stores at the heart." The shift is especially significant because
IKEA pioneered the concept of big-box retailing, combining
sprawling stores that act as showrooms and warehouses --
distribution centers, effectively, where customers provide the
last-mile delivery and final assembly. But as e-commerce has become
a bigger growth driver, IKEA has rolled out smaller, centrally
located click-and-collect points that allow customers to collect
online orders and carry a limited range of products for immediate
purchase. The company is still adjusting the model: Mr. Agnefjäll
says IKEA is using its 22 click-and-collect locations to test which
products the company should stock and which should be pushed its
budding delivery network.
QUOTABLE
IN OTHER NEWS
Incomes in the U.S. surged 5.2% in 2015, the first increase for
family households in eight years. (WSJ)
The Obama administration filed a World Trade Organization
complaint alleging that China is illegally subsidizing its domestic
wheat, rice and corn growers. (WSJ)
Samsung Electronics Co. is racing to contain damage from a
recall of its Galaxy Note 7 phone that has hit confidence in the
world's biggest smartphone maker. (WSJ)
Arch Coal Inc. won bankruptcy-court approval for a plan to cull
nearly $5 billion in debt from its books and emerge from chapter 11
protection. (WSJ)
Target Corp. plans to hire 7,500 distribution center workers
during the holidays this year, up from 6,500 last year. (Internet
Retailer)
Business groups are urging Congress to restore full financing
authority to the Export-Import Bank. (The Hill)
An alliance of three Asian container shipping lines will start
trans-Pacific service to the ports of Long Beach and Oakland.
(Logistics Management)
Russia plans to halt exports of oil products from foreign ports
on the Baltic Sea by 2018. (Reuters)
The four largest ports in the north of England agreed to a
partnership aimed at consolidating investment and drawing shipping
trade. (city a.m.)
Drone maker IFM is running pilot programs with several companies
to test the use of drones in warehouses for inventory management.
(TechCrunch)
Freight brokers want U.S. regulators to crack down on cargo
terminal operators they say are charging them unfairly for failing
to pick up shipments. (American Shipper)
Cargolux and CAL Cargo Airlines are adding weekly freighter
flights to Puerto Rico this fall. (Air Cargo News)
General Electric plans to shut its turbine manufacturing
operations in East Houston amid falling energy industry demand.
(Fuel Fix)
Boeing Co. lifted its forecast for aircraft demand in China in
the next two decades, saying a rising middle class would spur
travel. (Industry Week)
General Motors Corp. says its auto sales in China jumped 8.1% in
the first eight months of the year as U.S. sales dropped 4.2%.
(Agence France-Presse)
South Carolina Ports Authority Chief Executive Jim Newsome
expects the largest 20 container shipping lines will consolidate
down to 12 in two years. (Charleston Post and Courier)
ABOUT US
Paul Page is deputy editor of WSJ Logistics Report. Follow him
at @PaulPage, and follow the entire WSJ Logistics Report team:
@brianjbaskin, @lorettachao, @RWhelanWSJ and @EEPhillips_WSJ, and
follow the WSJ Logistics Report on Twitter at @WSJLogistics.
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Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
September 14, 2016 06:57 ET (10:57 GMT)
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