Today's Top Supply Chain and Logistics News From WSJ
June 26 2017 - 05:54AM
Dow Jones News
By Paul Page
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Food suppliers may have another big worry on top of slowing
sales and changing consumer tastes. Amazon.com Inc.'s deeper push
into the grocery business with its purchase of Whole Foods Inc. may
put new pressure on companies to cut their prices for a broad range
of goods, eating into margins in a business that's been buffeted by
change. Amazon's initial priority will likely be to lower Whole
Foods' operating costs so that it can charge less for groceries in
hopes of winning more customers, the WSJ's Annie Gasparro and Laura
Stevens report. That's likely to include leveraging its negotiating
expertise and the combined scale of the business to push for lower
prices from suppliers. That would help Whole Foods shed its
"whole-paycheck" reputation as a high-price provider, while
squeezing suppliers. Pricing isn't the only threat: Amazon's
extensive distribution channels could expand the reach of Whole
Foods' many smaller natural and organic brands by putting them
online, making them more competitive with traditional brands.
Tanker operator Frontline Ltd. is walking away from the
mergers-and-acquisitions market empty handed. The firm owned by
Norwegian billionaire John Fredriksen is pulling back its
consolidation efforts as it abandons plans to acquire U.S.-listed
rival Gener8 Maritime Inc., the WSJ's Costas Paris reports, weeks
after it dropped a hostile bid for Oslo-based rival DHT Holdings
Inc. Frontline has been trying to catch up to growing tanker
companies operating very large crude carriers, the bigger ships
that are becoming increasingly popular in turbulent oil markets.
The tanker business has been marked by a glut of capacity, but
Frontline's Fredriksen and others expect the trade to recover in
coming years. Shipping data firm AXS Marine reports 49 crude and
products tankers ordered in the first four months of this year, up
from just 12 at the same point a year ago. One potential driver:
declining fuel prices and freight rates have helped make storage of
crude on tankers more economical than land storage.
The Trump administration's move toward imposing steel tariffs on
national security grounds is drawing resistance from within the
U.S. Senior lawmakers from both parties are raising concerns that
other countries could use the same argument to block exports from
their states, the WSJ's William Mauldin reports. The warnings
include a caution from Rep. Kevin Brady, the Texas Republican who
chairs the House committee that oversees trade policy, who joined
critics in saying the moves could raise domestic prices for steel
and undercut jobs and wages. The pushback from Congress could slow
White House efforts to redraw the direction of global steel trade,
a pillar of the global industrial economy, by erecting barriers to
imported steel. U.S. Trade Representative Robert Lighthizer says
steel and aluminum are national security issues, a rarely-used
characterization that could set the groundwork for tariffs. For
some lawmakers, however, the economic impact of steel shipping may
carry more weight.
E-COMMERCE
For the slew of startups targeted in e-commerce consolidation,
there is a sober reality to being acquired by Wal-Mart Stores Inc.
Very sober. Workers at Jet.com Inc. found that one early change
after Wal-Mart bought the Hoboken, N.J.-based business last year
was that the office booze disappeared, the WSJ's Sarah Nassauer and
Brian Baskin write, and that the startup's regular Thursday evening
happy hour was moved out of the office. Those kind of
office-culture changes aren't necessarily noticeable to customers,
but they're getting greater attention as traditional companies use
acquisitions to catch up to online commerce trends and run into the
free-wheeling, casual practices at startups. The questions of
culture arose in the United Parcel Service Inc. buy in 2015 of
Coyote Logistics, a young freight brokerage with an energetic
culture that UPS absorbed. For Wal-Mart, issues such as office
happy hour were big enough to address in the buyout talks, and the
67-year-old retailer bent a bit without quite breaking its strict
rules.
QUOTABLE
IN OTHER NEWS
New-home sales rose in May and prices hit a record level,
signaling strong demand and tight inventories in the U.S. housing
market. (WSJ)
Takata Corp. placed its U.S. subsidiary into chapter 11
bankruptcy protection in move designed to keep the auto parts maker
afloat. (WSJ)
Activist investor Third Point LLC hedge fund took a $3.5 billion
stake in Nestlé SA, raising pressure on the world's largest
packaged-foods company to find new ways to accelerate growth.
(WSJ)
Glencore PLC sweetened its all-cash offer of $2.68 billion for
Rio Tinto PLC's Australian coal assets. (WSJ)
China's crude-oil imports rose in May to their second-highest
level ever. (MarketWatch)
Gasoline spilling from an overturned fuel truck ferrying fuel
from Pakistan's port city of Karachi caught fire, killing at least
132 people. (WSJ)
Major prospective buyers have dropped out of the bidding for
warehouse operator Global Logistic Properties Ltd. out of concerns
over an insider bid. (Financial Times)
Grocery delivery services face challenging last-mile logistics
and unbending deadlines in getting goods to customer homes. ( New
York Times)
Analysts expect growing retailer attempts to compete directly
with Amazon to feed greater demand for warehousing space.
(CNBC)
The turmoil at Southern California ports in the wake of the
Hanjin Shipping collapse has given way to smoother operations in a
recovering container shipping market. (Long Beach
Press-Telegram)
China Cosco Shipping plans to buy 14 new container ships,
including six mega-ships, from Chinese shipyards. (China Daily)
J.B. Hunt Transport Services Inc. is testing augmented reality
in some of its truck yard operations. (Talk Business)
Just over half of e-commerce retailers in a survey reported
being satisfied with fulfillment services. (Inbound Logistics)
GE Capital Aviation Services is adding 30 more 737-800s to its
freighter conversion program for the Boeing Co. jet. (Air Transport
World)
Thailand is looking for private foreign investment, including
backing from China, for a $44 billion plan to develop its eastern
seaboard and ports. (Port Technology)
The Ohio Civil Rights Commission found evidence of potentially
racially discriminatory practices at a UPS distribution center.
(Toledo Blade)
McDonald's Corp. is using a deal with Uber Technologies Inc. to
begin home delivery in the U.K. (The Telegraph)
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
June 26, 2017 06:39 ET (10:39 GMT)
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