Today's Top Supply Chain and Logistics News From WSJ
10 March 2017 - 11:09PM
Dow Jones News
By Paul Page
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The big food retailers are jumping into the grocery delivery
competition. Grocery heavyweights including Wal-Mart Stores Inc.,
Kroger Co. and Meijer Inc. are broadening delivery areas across the
country and the ways in which customers get their groceries, the
WSJ's Heather Haddon reports, scaling up in an area long seen as an
e-commerce niche. A fifth of shoppers bought groceries online last
year, up from 16% in 2015, according to a Nielsen survey for the
National Grocers Association, and Nielsen expects the spending to
reach $100 billion by 2025. There's also a critical defensive angle
for the retailers: More than half of online grocery shoppers use
Amazon.com Inc.'s Prime service for groceries, pressing the big
store operators to fend off more encroachment from Amazon. They're
meeting the logistics challenge by using outsourced operators like
Shipt and Instacart, but it's unclear whether ceding control of the
last-mile distribution will work over the long haul.
Planning for the Trump administration's $1 trillion
infrastructure investment is underway, and road designers say the
work can't start soon enough. President Donald Trump is pushing his
White House team to craft a spending blueprint that would pressure
states to streamline local permitting, the WSJ's Michael C. Bender
reports, and would favor renovation of highways over new
construction and prioritize projects that can get underway quickly.
Mr. Trump said at a meeting with aides and some private-industry
executives -- including Tesla Inc. founder Elon Musk -- he is
inclined to give states 90 days to start projects. The
administration is setting the groundwork as infrastructure
interests are sounding louder alarms over roads and bridges. The
American Society of Civil Engineers, in its every-four-years
report, gave U.S. infrastructure another failing grade and said the
country needs to spend $2 trillion more than now planned over the
next decade to get everything from highways to schools up to
speed.
Israel's biggest shipping company has solved one big management
question but now faces another. ZIM Integrated Shipping Services
Ltd. named Eli Glickman to replace Rafi Danieli as chief executive
officer, the WSJ's Costas Paris reports, leaving the veteran
corporate executive to decide whether to sell the company or find a
new way to compete against larger competitors. With just 1.4% of
the global container shipping market, ZIM has been forced into a
corner of the business by a prolonged slump in demand and
unprecedented consolidation that's left smaller operators in
precarious positions. ZIM is the only western operator which isn't
a part of three cost-saving shipping alliances that start operating
later this year, leaving smaller operators at a disadvantage. ZIM
insists it can be more nimble on its own, but that may mean making
tough decisions to get even smaller to sail outside the path of the
big ships.
SUPPLY CHAIN STRATEGIES
Lego A/S says it has fixed its supply-chain problems in the
U.S., but is still missing a critical piece of the puzzle -- the
final sales. The world's biggest toymaker by revenue reported flat
sales in the U.S. for 2016, the WSJ's Saabira Chaudhuri reports,
ending a painful year in which the company scrambled to repair
bottlenecks in getting goods to stores. Lego expanded its factory
in Monterrey, Mexico, to address what it figured would be higher
demand in the second half of the year. But despite a significant
jump in marketing expenses, sales didn't grow, a setback that
suggests the lag in manufacturing and fulfillment left a lingering
impact even after operations got back up to speed. Lego is still
paying special attention to the North American operation. The
company supplies the U.S. through that Mexico factory and has no
manufacturing facilities within the U.S., meaning President Donald
Trump's threat to impose a border tax could raise distribution
costs.
German retailer Takko Holding GmbH and its investors are facing
tough questions over a report that it used a garment factory in
Myanmar that employed underage workers. The report by an
independent Dutch, not-for-profit group says several factories in
Myanmar had unsafe and unhealthy working conditions, WSJ Pro
Private Equity's Jessica Davies reports, and employed workers below
the legal working age. The fallout from the report is hitting Apax
Partners, one of Europe's largest private-equity firms and Takko's
owner, highlighting the difficulty that institutional investors
have in enforcing ethical business practices across far-flung
supply chains. Takko and its owners say they've stepped up
oversight of their sourcing. But the nonprofit Fair Wear
Foundation, which advocates for improved garment factory
conditions, says the report highlights that apparel produced under
fair-labor conditions "is virtually impossible to find...Clothing
supply chains are too complex for that."
QUOTABLE
IN OTHER NEWS
U.S. crude prices for April delivery fell below $50, reaching
the lowest level since last Nov. 30. (WSJ)
The number of Americans applying for unemployment benefits rose
from a 44-year low but remained at a level consistent with a
growing labor market. (WSJ)
Royal Dutch Shell PLC is selling most of its Canadian oil-sands
developments, highlighting an exodus from the region by energy
companies. (WSJ)
Staples Inc. will close roughly 70 stores in North America this
year. (WSJ)
Signet Jewelers Ltd. plans to upgrade its online services and
close underperforming stores after declines in both store
e-commerce sales. (WSJ)
Emirates Airline says the original travel ban imposed by Mr.
Trump caused its passenger bookings to fall 35% on U.S. routes.
(WSJ)
New CSX Corp. chief Hunter Harrison says the railroad can grow
by reclaiming freight volume lost to truckers. (Reuters)
Members of shipping's THE Alliance are setting up a trust fund
to safeguard cargo operations should one of its members go
bankrupt. (The Loadstar)
Volvo Trucks demonstrated truck-platooning technology outside
California's Port of Long Beach. (Long Beach Press-Telegram)
U.S. highway regulators say they will not restore controversial
limitations on truck-driver work hours. (Commercial Carrier
Journal)
Ceva Logistics' fourth-quarter air freight volume grew 7.5% and
ocean volume grew 8.9%, but margins weakened on rising shipping
prices. (Logistics Manager)
The global fleet of liquefied natural gas tankers is expected to
grow at nearly double the pace of LNG trade. (Logistics Insight
Asia)
Kroger Inc. is adding a 674,000-square-foot distribution center
in eastern Kentucky to serve the eastern U.S. (Cincinnati
Enquirer)
A German state will sell its majority holding in Frankfurt-Hahn
Airport to HNA Airport Group of China. (Air Cargo News)
Rolls-Royce Holdings PLC will establish a research center in
Finland to study autonomous and remote-controlled shipping.
(Helsinki Times)
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.
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Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
March 10, 2017 06:54 ET (11:54 GMT)
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