STZB Constellation Brands, Inc.(Class B)

By Paul Page 

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The supply chain for beer in the U.S. increasingly begins in Mexico. Constellation Brands Inc., the U.S. distributor of Corona and Modelo, reported a 13% jump in beer sales last quarter as market leaders Budweiser and Bud Light hemorrhage volume and even craft beer popularity flattens out. Constellation says the results show that the growth in U.S. beer imports really is concentrated in the Mexican brands rather than the broader world of foreign producers, the WSJ's Jennifer Maloney reports, and that the gains will help the company step up plans to extend its distribution network. Some 60% of Constellation's sales growth in the last quarter came from expanded distribution, and Chief Executive Robert Sands says the network isn't as big as "we ought to have." With profits margins and revenues growing, the company should have the resources to reach deeper into the U.S. and other markets.

Boeing Co. is pushing deeper into autonomous transportation technology , but the move is likely to have an impact on the jet maker's supply chain long before it produces self-flying planes. Boeing is acquiring Virginia-based Aurora Flight Sciences Corp., a maker of aerial drones and pilotless flying systems, the WSJ's Doug Cameron reports, in a deal the company says could pave the way for flying taxis. Aurora works on autonomous systems that allow aircraft to be flown remotely, and has been working with Uber Technologies Inc. on a new vehicle that would take off and land like a helicopter. Other parts of the business could make a more immediate contribution, however. The technology includes so-called machine learning capability, which could be used to make industrial operations more efficient. And Aurora produces composite parts for aircraft and other vehicles, potentially a big attraction to Boeing as it looks to take greater command of its supply chain.

The Trump administration has a new trade tool in its kit aimed at reviving U.S. manufacturing. The U.S. International Trade Commission approved a petition from Whirlpool that it is suffering "serious injury" from competition from foreign washing machine makers, the WSJ's Jacob M. Schlesinger and Andrew Tangel write, opening the door to potential sanctions against South Korean rivals Samsung Electronics Co. and LG Electronics Inc. in the near term and potentially to more aggressive tactics in broader trade battles. The ITC is due to send recommendations to the White House on what tariffs or quotas it recommends and the administration could decide early next year on import limits. Samsung and LG also may make bigger decisions about their production of appliances. Critics say the manufacturers have been hopping to different countries to get around earlier trade sanctions. But LG's latest stop is in Tennessee, where it is setting up its first-ever major U.S. factory, a $250 million washing-machine plant.

COMMODITIES MARKETS

The U.S. may have reached peak shale.American shale drillers who upended traditional oil markets by increasing production in the face of lower prices are finally showing signs of slowing down. The WSJ's Bradley Olson and Lynn Cook write that t he U.S. oil-rig count grew 6% in the third quarter, a marked deceleration from average growth of more than 20% in the previous four quarters. Last month, the U.S. Energy Information Administration cut its forecast for U.S. oil production this year to 9.69 million barrels a day, still high enough to surpass a nearly 50-year record but down from an earlier forecast of 9.82 million barrels. The impact is hitting shipping markets that have benefited from growth in the Permian Basin region, with volume of petroleum and petroleum products on U.S. railroads down 17% year-over-year in September. Producers are still working drills, but experts say growth forecasts now look overly optimistic, with "no new shale plays" coming forward in recent months.

QUOTABLE

IN OTHER NEWS

The U.S. trade deficit narrowed in August as imports by value slipped 0.1% while exports expanded 0.4% from July. (WSJ)

The number of Americans filing applications for new unemployment benefits fell in late September. (WSJ)

The Trump administration is proposing that cars be required to have a set amount of U.S. content to qualify for Nafta tariff breaks. (WSJ)

Fred Ehlers was promoted to chief information officer at Norfolk Southern Corp. (WSJ)

TransCanada Corp. ended development of two energy pipelines meant to help get oil and gas to markets in Europe and Asia. (WSJ)

The U.S. Postal Service will skip retiree payments for the fifth straight year and warned about its ability to raise prices. (WSJ)

Wal-Mart de Mexico SAB's sales grew 10.2% in September as emergency buys following an earthquake offset the impact of temporary store closures. (WSJ)

A bankruptcy court approved retailer True Religion Apparel Inc.'s reorganization plan. (WSJ)

Honeywell International Inc. is pursuing an acquisition of water-filtration company Evoqua Water Technologies. (WSJ)

Japanese trading house Toyota Tsusho and Kindai University started a project to export farmed Pacific bluefin beginning this fall. (Nikkei Asian Review)

Amazon.com Inc. is testing a service handling delivery from the warehouses of third-party sellers to consumers' homes. (Bloomberg)

U.S. rail carload traffic fell 2.3% in September, including steep declines in grain and petroleum volume. (Progressive Railroading)

Port Houston may waive certain cargo charges for shippers affected by Hurricane Harvey. (Houston Chronicle)

Oil company BP PLC is adding six newly-built liquefied natural gas carriers to its fleet. (Lloyd's List)

The International Longshore and Warehouse Union is expanding its drive to organize supervisors at port container terminals in Southern California. (Journal of Commerce)

The Port of Virginia will use a $1.5 million federal grant to help launch a truck-reservation system for container operations. (Virginian-Pilot)

Amazon plans to place a distribution center near Tennessee's Memphis International Airport. (Memphis Daily News)

Air France-KLM is testing the use of blockchain technology to manage repair parts for its aircraft. (Aviation Today)

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 06, 2017 06:51 ET (10:51 GMT)

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