By Paul Page
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Big store owners have made their choice of one delivery agent
for the holidays: consumers. Retailers including Wal-Mart Stores
Inc. and Target Corp. are investing heavily to make it easier for
shoppers to pick up their online orders in stores, the WSJ's Sarah
Nassauer and Khadeeja Safdar report. The in-store pickup plan is
aimed at smoothing pain points for retailers and their customers
and trying to turn the brick-and-mortar business into an advantage
over Amazon.com Inc. and its expansive online marketplace and
delivery operations. Among the changes: Wal-Mart will make products
available for same-day store pickup, put more staff at pickup
counters and stock the inventory closer to workers. Managing
inventory for both online and store sales has been a major problem
for retailers, and this holiday season will provide a big test of
whether the sellers can get the mix right. PwC says its survey of
consumers showed about 21% of Americans use in-store pickup
regularly and 48% say they use it "on occasion."
Shipping & Transit LLC has taken in millions of dollars
through shipment tracking over several years yet hasn't shipped or
tracked much of anything. The business based at a home in Boynton
Beach, Fla., has used its claim that it invented the idea of
tracking and notification to become the country's biggest filer of
patent lawsuits, raking in big money by going after small companies
that try to tell their customers where their packages are going.
Shipping & Transit doesn't sell tracking systems, or anything
else, the WSJ's Ruth Simon and Loretta Chao report. Instead, it
claims licensing fees when companies provide "status messages for
cargo, shipments and people," and the company or its predecessor
has sued dozens of major retailers and big delivery operators. Most
of its targets are small, and at a few thousand dollars the fees
generally are less costly than litigation. But startups say the
legal challenge can be crushing for would-be entrepreneurs.
United Parcel Service Inc. is placing a big bet on growth in
shipping demand. The parcel delivery giant issued an upbeat
forecast for record holiday shipments, the WSJ's Mike Esterl and
Doug Cameron report, and says it expects strong expansion in
e-commerce demand in the U.S. and robust growth in Asia and Europe.
UPS is backing up its bullish outlook by buying 14 Boeing Co. 747-8
freighters, the company's first aircraft order since 2008. The deal
pushes UPS more deeply into jumbo-jet operations at a time when
international shipping demand has been soft for many companies and
populist anti-trade currents seem to present new barriers to global
goods movement. The company is pressing lawmakers to support new
trade agreements that are drawing scorn in the presidential
campaign but would bring new freight volume for its new, bigger
planes. In the meantime, UPS says cross-border e-commerce is
surging six times faster than the broader economy, growth that
helped the company show big gains across its business lines in the
third quarter.
TRANSPORTATION
Amazon.com Inc.'s investment in logistics is coming at a heavy
price. The e-commerce giant's profit came in sharply below
expectations, and far behind its second-quarter earnings as the
costs from opening new warehouses and slashing delivery times
soared. Shipping costs were up 43% year-over-year to $3.9 billion,
well ahead of the 29% growth in sales, the WSJ's Laura Stevens
reports, and the company is predicting more of the same as it
builds out its own logistics network. Amazon has opened 23
warehouses world-wide since July, after opening just three in the
first half of the year. The company has been expanding that
network, including investment in air cargo and trucking operations
that it will control, as it pushes to expand its high-yield,
service-intensive Prime membership program for consumers. As the
membership grows, Amazon is getting more items delivered in as fast
as an hour.
Hanjin Shipping Co.'s troubled business may be nearing an end.
Hyundai Merchant Marine Co. is bidding for the bankrupt carrier's
Asia-U.S. route assets as the dismantling of one of the world's
biggest container shipping lines picks up speed, the WSJ's In-Soo
Nam reports. The new submission from what had been Hanjin's smaller
South Korean rival will give HMM a chance to carry out a weeklong
due diligence of what's left of Hanjin's assets, which could lead
to a final takeover proposal as soon as next week. Some of Hanjin's
former cargo vessels are starting move into other fleets as the
shipping industry and financial groups begin to seek equilibrium
after the turmoil triggered by the carrier's late-summer move into
receivership. Germany's HSH Nordbank is taking control of six of
the biggest vessels Hanjin had used and chartering them to Maersk
Line. The bank is part of a syndicate that also plans to charter
three container ships to Mediterranean Shipping Co., with delivery
slated for December.
China's ZTO Express Inc. had a rough first day as a
publicly-traded company. The delivery giant raised $1.4 billion in
the largest U.S. initial public offering this year, the WSJ's Alec
Macfarlane reports, but shares in the business nosedived 15% from
the offering price of $19.50. Founded in 2009, ZTO operates a fleet
of more than 3,300 trucks and counts Chinese e-commerce giants
Alibaba Group Holding Ltd. and JD.com Inc. as customers. For
investors, ZTO provides a new way to bank on expected growth in
China's burgeoning e-commerce industry. Backers of the IPO say ZTO
plans to use most of the proceeds to buy land and equipment and to
build facilities to expand its sorting capacity. Private-equity
firm Warburg Pincus, which holds a 6.2% stake in the business, says
ZTO has a strong foothold in a fragmented Chinese express delivery
market. ZTO's faltering debut on the New York Stock Exchange,
however, signals investors have grown cautious about how quickly
and profitably China's delivery companies will grow.
QUOTABLE
IN OTHER NEWS
The shipping industry's global regulator agreed to begin
imposing strict new limits on sulfur emissions from vessels
starting in 2020. (WSJ)
XPO Logistics Inc. sold the truckload business it acquired
through Con-way Inc. to Canadian trucker TransForce Inc. for $558
million. (WSJ)
The European Union and Canada reached an expansive trade
agreement, the first such pact the EU has negotiated with another
major industrialized economy. (WSJ)
Demand for long-lasting manufactured goods slipped slightly in
September. (WSJ)
The French government is struggling to dismantle a migrant camp
in Calais that has disrupted freight and passenger traffic across
the English Channel. (WSJ)
Nissan Motor Co. is displaying strong confidence in U.K.
manufacturing with a decision to make new sport-utility models at
its plant in northern England. (WSJ)
ValuePart Inc., which distributes parts for earth-moving
equipment through an extensive network of North American
warehouses, filed for bankruptcy protection. (WSJ)
General Electric Co. will pay $599 million for a controlling
stake in Concept Laser GmbH. (WSJ)
Qualcomm Inc. is buying NXP Semiconductors NV for $39 billion,
adding a top supplier of automotive chips to its business.
(WSJ)
Potash Corp. of Saskatchewan Inc.'s third-quarter profit and
sales tumbled as an ongoing slump in prices outweighed a pickup in
volumes. (WSJ)
British drugmaker GlaxoSmithKline Pharmaceuticals Ltd. is
drawing up contingency plans to secure its supply chain after the
U.K. leaves the European Union. (Financial Times)
Austrian steelmaker Voestalpine opened a $740 million plant in
Corpus Christi, Texas, to supply materials throughout North
America. (Platts)
Boeing Co. expects global air cargo traffic to grow at a 4.2%
average annual rate over the next 20 years. (Industry Week)
Georgia-based Less-than-truckload carrier Saia Inc. will add
northeast U.S. service as a step toward national coverage. (DC
Velocity)
Macy's Inc. faces hurdles in working with suppliers and
distributors to meet its goal of placing RFID tags on all its
merchandise by next year. (Supply Chain Dive)
The U.S. Maritime Administration awarded $4.85 million in grants
for initiatives to transport containerized freight on rivers.
(American Shipper)
Retailer Sports World Chicago halted online orders for Chicago
Cubs gear because it can't keep up with the overwhelming demand.
(Internet Retailer)
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 and @EEPhillips_WSJ, and follow the WSJ
Logistics Report on Twitter at @WSJLogistics.
Subscribe to this email newsletter by clicking here:
http://on.wsj.com/Logisticsnewsletter .
Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
October 28, 2016 06:30 ET (10:30 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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