Today's Top Supply Chain and Logistics News From WSJ
12 September 2016 - 9:02PM
Dow Jones News
By Paul Page
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The debacle of the Hanjin Shipping bankruptcy may be coming to a
slow conclusion for shippers in the U.S. Some Hanjin ships are
moving to docks at U.S. ports as court rulings provide the
foundering South Korean carrier protection for its ships. The WSJ's
Kwanwoo Jun reports that one vessel, the Hanjin Greece, started
unloading containers at the Port of Long Beach over the weekend,
and officials say three more container ships that have been
stranded at sea are due to berth in the coming days. One hurdle for
shippers as peak retail selling season approaches: funds approved
for spending will cover handling for only four ships while 13
Hanjin ships are bound for U.S. ports. Money to handle those
vessels may be in the pipeline soon. Hanjin shareholder Korean Air
has agreed to provide funding to get more ships moving, but it
looks like unwinding the Hanjin fiasco may take several weeks.
E-commerce is changing more than retail shopping patterns. The
widespread availability of a wide array of goods is transforming
rural America, bringing small-town residents staples at a cheaper
price and goods that can't be found at Dollar General and creating
new economic opportunities and challenges. The rush to online
retail is also raising new challenges in the delivery business, the
WSJ's Laura Stevens writes, since rural consumers are the most
expensive to serve both for retailers and parcel carriers. One
United Parcel Service Inc. driver in rural Oklahoma says his
business has shifted from goods like specialized farm equipment to
mostly routine consumer products, creating a tough financial
proposition. The delivery cost in sparsely-populated areas can
surpass the cost of the goods themselves. That leaves retailers
struggling to solve a tough economic puzzle even as the communities
themselves cope with the pressure local businesses face when
competition can come from thousands of mile away.
Two of the world's biggest electronics companies are adding
critical flexibility to their supply chains by working together.
Intel Corp. is providing wireless chips in some models of the new
iPhone 7 that Apple Inc. rolled out this month, with its baseband
modern semiconductors replacing those sold by Qualcomm Inc. The
WSJ's Don Clark reports Intel is making a breakthrough in the chip
giant's lengthy quest to find a foothold in the big smartphone
market. That will give Intel important new flexibility and new
scale for production -- and minimize its risks by reducing the chip
maker's dependence on the struggling personal computer market.
Apple also reaches a milestone in making its own supply chain more
flexible. Analysts say the company, like many electronics makers,
wants to establish at least two suppliers for key components so
that it can have a backup in case of emergencies and to keep prices
down.
TRANSPORTATION
Google parent Alphabet Inc. and Chipotle Mexican Grill Inc. are
the latest unlikely pair to team up on drone delivery. Alphabet's
research lab, which is called X, is undertaking a test at Virginia
Tech in which drones will ferry burritos from a Chipotle food truck
to a distribution point for customers, the WSJ's Jack Nicas
reports. It may seem a frivolous use of cutting-edge technology,
but the researchers say there's method behind the choice. X chief
Astro Teller says prepared food poses important delivery
challenges, including how to handle busy spikes in demand and how
to protect the cargo. The Virginia Tech campus is also no accident:
the school has a nationally-known engineering program to go with a
population of burrito-loving students. That will help researchers
see how people interact with the technology, and help shape use of
the drones for bigger missions like delivering supplies to areas
hit by natural disasters.
The fallout from Hanjin Shipping's bankruptcy may have surprised
players in the global supply chain, but imagine how it shocked
absurdist filmmaker Rebecca Moss. The 25-year-old is one of four
artists chosen for an "artist in residency" program on container
ships, and WSJ Logistics Report's Erica E. Phillips writes that her
"23 Days at Sea" has taken a new, even absurd, turn. Ms. Moss is
trapped off the coast of Japan aboard the Hanjin Geneva, one of
dozens of vessels that have been stranded at sea since the South
Korean shipping giant filed for bankruptcy protection. Ms. Moss
said she and the crew -- and two American passengers -- have little
idea when they will be able to come ashore. But for program
director Kimberly Phillips, getting caught up in the seemingly
absurd events "is probably the best thing that could happen" to a
program meant to shine a light on the largely invisible global
shipping system.
QUOTABLE
IN OTHER NEWS
Wal-Mart Stores Inc. will stop selling Egyptian cotton sheets
made by Welspun India Ltd., saying the supplier can't guarantee the
products were legitimate. (WSJ)
Italy's Fincantieri SpA and Dutch counterpart Damen Shipyards
Group are in the running to buy STX France from South Korean
debt-ridden parent STX Offshore & Shipbuilding Co. (WSJ)
U.S. consumers' credit balances increased in July, a sign of
steady household spending. (WSJ)
The World Trade Organization ruled against U.S. tariffs that
target subsidies benefiting South Korean rivals to U.S. appliance
maker Whirlpool Corp. (WSJ)
China's car market jumped 26% year-over-year in August, as
consumers took advantage of a tax break to buy vehicles. (WSJ)
Kroger Co. cut its full-year outlook as sliding food prices
stoked a price war and intensified competition among U.S. grocers.
(WSJ)
The Federal Highway Administration sent $2.8 billion in unused
federal highway aid to states, with the largest share of $291.1
million going to California. (Engineering News-Record)
Massachusetts will get $42 million in federal funds to upgrade
Boston's Conley container terminal to handle bigger ships. (Banker
& Tradesman)
Jon Slangerup resigned as chief executive of the Port of Long
Beach to take a post leading an aviation technology company. (Long
Beach Press Telegram)
Carload traffic for U.S. railroads fell 6.6% year-over-year in
August, the slowest rate of decline this year as volume reached its
highest level of the year. (Logistics Management)
China's Best Logistics Technologies raised $760 million in a new
funding round that included investment from Alibaba Group Holding
Ltd. logistics affiliate Cainiao. (Investopedia)
Chinese domestic carrier YTO Express Airlines will start
international freight service with backing from the Shaanxi
province government. (Aviation Week)
The administrator of the Panama Canal Authority insists the
canal will not be drawn into a price war with the Suez Canal.
(Splash 24/7)
SEKO Logistics named James Gagne president as the freight
forwarder set a succession plan under Chief Executive William
Wascher. (American Shipper)
China Cosco Holdings will sell five older ships for scrap for
$14 million. (Fairplay)
U.K. industrial developer Peel Logistics took over warehouse
business Evander Properties. (SHD Logistics)
Amazon.com Inc. is launching one-hour delivery to buyers at
tailgate parties at San Francisco 49ers home games. (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, @RWhelanWSJ 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
September 12, 2016 06:47 ET (10:47 GMT)
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