Today's Top Supply Chain and Logistics News From WSJ
12 December 2017 - 11:21PM
Dow Jones News
By Paul Page
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The shipping-industry downturn is still washing over
shipbuilders. South Korea's Samsung Heavy Industries Co. is
replacing its chief executive after warning of heavy losses last
week that have wiped off nearly a third of its market value. The
WSJ's Costas Paris reports the world's third biggest shipyard by
capacity has seen its order book slump to roughly $20 billion this
year, half of what it was four years ago, leaving the business
looking to issue new shares to raise capital. The company's
problems are part of the broader woes that have hit South Korea's
big shipbuilding industry as a down cycle in shipping and vessel
overcapacity sent orders plunging, leading to a painful
restructuring at shipyards. Samsung Heavy under Park Dae-young's
leadership has relied on offshore business for most of its sales.
That trade has been hit hard by changing energy markets, however,
and Mr. Park is taking the blame for decisions that have left
Samsung Heavy behind its big local competition.
A new distribution center meant to smooth out Mattel Inc.'s
deliveries is instead contributing to the toy maker's problems. The
company issued a highly unusual and ominous warning on sales for
the critical holiday season, the WSJ's Paul Ziobro writes, and said
weak demand along with its own logistics stumbles in a changing
market were to blame. The warning cast a grim shadow over Mattel
during a period when most toy companies are racing to keep up with
holiday demand, and as other retailers are signaling strong gains
in a resurgent consumer-driven economy. But shifts by consumers
toward online sales and digital devices are battering the maker of
big brands including Barbie, Fisher-Price and Hot Wheels, and
undercutting its usual market channels. Mattel has sought to solve
that partly by opening a Pennsylvania distribution center to serve
the dense eastern U.S. The site has struggled to ramp up, howver,
adding pressure to other facilities just when it was supposed to
provide a solution.
Work may finally start this week toward solving the biggest
economic question posed by Brexit since Britain voted to leave the
European Union. Now that they've set the framework for a breakup,
the EU and the U.K. may set talks on the trade questions that are
crucial to exporters in the region, the WSJ's Emre Peker, Jason
Douglas and Stephen Fidler write. If EU leaders agree at a summit
this week, they will work on a temporary transitional arrangement
that will immediately follow Brexit in March 2019 and the outlines
of a future trade deal. The outcome could set new restrictions as
well as new rules for customs and other trading regulations that
may complicate the flow of goods. U.K. Prime Minister Theresa May
has said the U.K. will leave the EU's common zone of regulation and
its customs union, which sets uniform external tariffs. That could
create a raft of new border bureaucracy, creating delays at ports
and disrupting international supply chains.
COMMODITIES
Electric vehicles may make up only a small share of traffic on
roads but they're having an overriding impact on commodities
markets. Investors eager to get in early have doubled the price of
lithium and cobalt in the past two years, the WSJ's Amrith Ramkumar
and Ira Iosebashvili write, the result of a boom in electric
vehicles that is stoking demand for metals that are used in
batteries and other components. For some investors, it's a bet that
the push to replace gasoline-powered vehicles will trigger the
biggest shift in commodities demand since petroleum took over more
than a century ago. The push may hit the dry-bulk shipping sector,
opening new markets and potentially raising prices for transporting
higher-value metals. Still, investing in assets in those markets
comes with a warning. Forecasts on the use of electric vehicles are
highly uncertain, and higher prices for the commodities typically
spur increased production, boosting supply and lowering prices.
QUOTABLE
IN OTHER NEWS
Corning Inc. will buy almost all of 3M Co.'s optical fiber and
copper cable business for $900 million. (WSJ)
Steinhoff International Holdings NV appointed additional outside
advisers as the retail giant battles a burgeoning financial crisis.
(WSJ)
Japan and the European Union agreed to a new free trade accord.
(Deutsche Welle)
Large Japanese manufacturers turned more optimistic about
economic conditions in the December quarter. (Reuters)
Orders in the U.S. for manufacturing technology equipment rose
6.3% from September to October. (Industrial Distribution)
California is studying how to replace its gas tax with a
miles-driven fee. (Sacramento Bee)
Maersk Line is starting to see "some pockets of downward
pressure" in container freight rates. (Bloomberg)
Shanghai International Port Group started trials of its
highly-automated container handling as it opened the newest phase
of the Yangshan Port. (South China Morning Post)
Abu Dhabi Ports will expand its Khalifa Port to handle the
world's largest bulk ships. (Port Technology)
Exports out of the Port of Virginia tumbled 7% in November.
(Virginian-Pilot)
Spot rates for liquefied natural gas carriers are soaring on
persistent strong demand. (Lloyd's List)
U.S. Customs and Border Protection will test electronic payment
of shipping fees at four U.S. ports. (American Shipper)
Canadian National Railway Ltd. says it is trying to reverse a
decline in grain transport service. (The Producer)
San Francisco is putting tough new regulatory limits on the
testing of delivery robots on city streets. (TechCrunch)
Vinyl record sales are at a 25-year high, causing a severe
backlog at vinyl factories. (The Guardian)
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
December 12, 2017 07:06 ET (12:06 GMT)
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