Today's Top Supply Chain and Logistics News From WSJ
31 October 2017 - 10:03PM
Dow Jones News
By Paul Page
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The shipping world's restructuring wave is washing over maritime
finance. Three U.S. private-equity firms have submitted bids to
take over troubled German lender HSH Nordbank, the WSJ's Costas
Paris reports, extending restructuring in a banking sector still
weighed down by the heavy debt load left from the downturn in
global shipping. The Royal Bank of Scotland struck agreements
earlier this year to sell some $600 million in shipping loans as it
moved away from the sector. Now, state-owned HSH is rushing to find
a buyer after suffering massive losses on shipping debt. Looking to
buy in are Apollo Capital Management LLC, Cerberus Capital
Management LP and J.C. Flowers & Co. The crunch in the
financial arena doesn't appear to be slowing carrier efforts to add
capacity: Cosco Shipping Holdings plans to raise $1.9 billion
through a share offering in Shanghai, with the money intended to
back the purchase of 20 container ships Cosco has already
ordered.
Apple Inc. is redesigning its foundation electronic devices to
jettison a key supplier. The new iPhones and iPads would replace
components made by Qualcomm Inc., the chip maker locked in a legal
fight with Apple, the WSJ's Dana Mattioli and Tripp Mickle report,
redrawing the company's supply chain for critical components that
handle communications between wireless devices and cellular
networks. Apple would turn to modem chips from Intel Corp. and
possibly from MediaTek Inc., moving away from the world's biggest
supplier of such chips. Qualcomm has supplied Apple for a decade.
But the companies have been battling over Apple's claim that
Qualcomm is unfairly blocking competitors and charging exorbitant
patent royalties. Apple's plans aren't yet set, but the new designs
suggest the dispute could spill beyond the courtroom and into the
smartphone supply chain and reset a market Qualcomm now dominates
with a 50% share.
The commodities world is gearing up for electric cars. The
London Metal Exchange plans to launch futures contracts for battery
metals as soon as early 2019, the WSJ's David Hodari reports, a new
sign that the race to build a new generation of automobiles is
restructuring supply chains from factories to the sourcing of raw
materials. The LME will work with battery producers and car makers
on contracts for minerals such as cobalt and lithium that are used
in batteries that power electric vehicles. Manufacturers are trying
to manage risk in the mining of cobalt in particular. The commodity
is found in the Democratic Republic of Congo, and analysts
including Macquarie say the automobile industry could face
"sustained and widening shortages" of cobalt as soon as 2020. There
are similar forecasts for lithium, and analysts say manufacturers
will have to produce batteries that are more efficient, and use
less of the minerals, to back projections for electric-vehicle
growth.
SUPPLY CHAIN STRATEGIES
Automation in manufacturing may soon change the direction and
speed of apparel supply chains. Sportswear supplier Nike Inc. is
talking about moving more of its manufacturing to the Americas,
advancing a near-shoring strategy that marks a reversal of sorts of
the move to Asia that made the company a mainstay of globalization.
The plan, reported in Quartz, is to work with outsourced
manufacturing specialist Flex to bring production closer to Nike's
big North American market, reining back the company's long supply
chains to get goods to consumers faster. Nike is hoping to save on
labor costs by using more robotics on assembly lines, expanding a
strategy its used at Asia factories. Such automation is growing
more common as apparel companies look to cut costs. The longer-term
benefit may be that they'll be able change production more quickly
to match shifting consumer tastes.
The shop-and-ship holiday season hasn't even started but the
competition is already on to handle the returns. United Parcel
Service Inc. is rolling out an online returns service for small and
medium-size e-commerce businesses, the WSJ's Sara Castellanos
writes, adding to the growing focus on an area widely seen as a
barrier to profitable online sales expansion. Retail analysts say
nearly a third of online purchases are returned, triple the rate of
returns for in-store sales. Many brick-and-mortar stores have
focused more on getting holiday shoppers to return online purchases
to stores to help trigger more in-store sales and reduce the high
costs of dealing with returns. And department store Kohl's Corp.
struck a deal with Amazon.com Inc. this year to allow buyers to
bring Amazon purchases back to Kohl's sites. It's a variation on
the multi-channel strategy that store operators say can simplify
returns.
QUOTABLE
IN OTHER NEWS
U.S. consumer spending rose in September at the fastest
month-to-month pace in eight years. (WSJ)
Crude oil prices are at their highest level in eight months.
(WSJ)
China's factory activity slowed in October, suggesting the
country's economy is cooling. (WSJ)
Nintendo Co. sharply raised its sales forecast for the Switch
game machine. (WSJ)
Three low-cost passenger airlines are launching operations in
Canada. (WSJ)
Staples Inc. plans to sell its operations in China as it focuses
on its business closer to home. (WSJ)
Employment at the Port of New York and New Jersey grew 20% from
2014 to 2016. (Newark Star-Ledger)
The United Nations Conference on Trade and Development says
recent shipping-industry consolidation may threaten competition.
(Lloyd's Loading List)
Amazon is slashing the fees it charges grocery sellers on its
marketplace. (Recode)
Best Buy Co. is using logistics operator Geodis to expand
same-day delivery to 15 more U.S. cities this fall. (Minneapolis
Star-Tribune)
TransRisk struck deals with Nodal Exchange LLC and DAT Solutions
LLC for its plan to offer trading in trucking spot-price futures.
(DC Velocity)
A federal appeals court halted implementation of a portion of an
Obama administration regulation setting emissions-reduction
standards for truck trailers. (The Hill)
The U.S. will start collecting anti-dumping duties on aluminum
foil imports from China. (American Shipper)
Bulk shipping's Baltic Dry Index retreated to start this week
after reaching a three-year high last week. (Seatrade Maritime)
India's second-tier ports are taking a growing share of the
country's trade as companies look to get away from crowded
gateways. (Business Standard)
Some countries fear a potential European ban on the weedkiller
glyphosate could hurt their agriculture exports. (Politico)
Warehouse employment in West Virginia nearly tripled from 2007
to 2016. (West Virginia Gazette)
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 31, 2017 06:48 ET (10:48 GMT)
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