SWFT Swift Transportation Company Class A (delisted)

By Paul Page 

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A trade surge at U.S. seaports doesn't appear to be triggering profit gains for freight operators. Two of the country's biggest shipping operators, Swift Transportation Co. and Hub Group Inc., are expecting lower earnings for the first quarter than they projected earlier, WSJ Logistics Report's Erica E. Phillips writes. The reduced guidance is a new sign of the gap between the big expectations for economic growth in the U.S. this year and the reality of market conditions, including plentiful trucking capacity and weak pricing. Hub, which targets the intermodal trade that includes rail and trucking moves, says margins are foundering in the highly price-sensitive business. Swift is more negative about demand, however, saying shipments are behind expectations even after a March uptick. That's a contrast with data groups and seaports that have reported strong gains in container movements, suggesting shippers aren't ready to push their goods all the way through their supply chains.

China's logistics operators are making a strong run at Wall Street for more funding. Best Logistics Technologies Ltd., a business backed by Alibaba Group Holding Ltd. and Foxconn Technology, is planning to raise around $1 billion in an initial public offering in the U.S. this year, the WSJ's Kane Wu reports. That would make the second IPO for a China logistics operator in the U.S. since last year, following the debut of ZTO Express Inc. last fall that raised $1.4 billion. Best Logistics already has some significant backing that provides significant shipping volume along with cash. Alibaba's logistics unit, Cainiao Network, is an investor, helping the company build a network of warehouse and distribution operations across China and an international presence that includes three warehouses in the U.S. The network backs cross-border fulfillment for Chinese shoppers, a burgeoning growth area for e-commerce.

Flipkart Group's new investors may be just as important as the money they're bringing to the table. The Indian e-commerce startup is raising $1.4 billion in a new funding round that values the Bangalore company at $11.6 billion, the WSJ's Newley Purnell reports. The backing marks a step down from Flipkart's valuation a couple of years ago, a sign that investors aren't taking a Gold Rush approach to India's fractured e-commerce market. But the new support from Chinese internet firm Tencent Holdings Ltd., Microsoft Corp. and eBay Inc. gives Flipkart new luster -- and some new business -- as Amazon.com Inc. and Alibaba push into the country. Flipkart struck a separate deal to buy eBay's Indian business, which could bring the company more of the goods it needs to fill its growing logistics network.

ECONOMY & TRADE

The small town of Columbus, Ind., has a special place in the gathering debates over manufacturing and U.S. trade. Columbus has become one of the strongest exporting communities in the country, the WSJ's Will Connors reports. Truck-engine maker Cummins Inc. has been a leader in the effort, working with forward-thinking executives and local leaders to build a thriving industrial center boosted in part by investment by auto-parts makers, many from Japan. Some three decades after Columbus started the effort to attract foreign investment, there are 36 foreign companies working in the town of just 46,000 people, the hometown of Vice President Mike Pence, and Columbus gets more of its economic output from exports than any other U.S. city. Its place in global trade has helped Columbus hold up better than many Midwestern towns, but the strong ties to the automotive sector leave it vulnerable to changes in domestic car sales. And potential changes in immigration law are raising concerns that the city's ties to international markets could fray.

QUOTABLE

IN OTHER NEWS

Toshiba Corp. warned it may not be able to stay in business after huge losses at its U.S. nuclear subsidiary. (WSJ)

President Donald Trump promised corporate executives in a meeting "some very pleasant surprises" on the North American Free Trade Agreement. (WSJ)

The number of job openings in the U.S. climbed to 5.7 million in February. (WSJ)

U.S. soybean prices hit a one-year low as signs of big Brazilian harvests stoked concerns over bloated stockpiles. (WSJ)

Growth in China's car sales slowed sharply to 1.7% in March. (WSJ)

Wal-Mart Stores Inc. is cutting hundreds of corporate jobs this month, looking to save money as it invests in its e-commerce business. (WSJ)

Loews Corp. will pay $1.2 billion to buy packaging maker Consolidated Container Co. (WSJ)

Dutch conglomerate Pon Holdings is proposing to buy Accell Group, creating one of the world's biggest bicycle makers. (WSJ)

California lawmakers passed legislation sharply raising state fuel taxes and vehicle registration fees to pay for road repairs. (San Francisco Examiner)

China's freight rail volume rose 15.3% in the first quarter. (Xinhua)

Bankrupt retailer Hhgregg Inc. is liquidating its inventory as it prepares to shut down. (Internet Retailer)

Mitsui O.S.K. Lines plans to buy four 20,000-container ships from Samsung Heavy Industries that will be powered by liquefied natural gas. (Port Technology)

Germany's Deutsche Post DHL Group will step up production of its Streetscooter electric van and sell it to external customers. (Automotive News Europe)

Japanese delivery companies are raising prices as they face a labor shortage. (Nikkei Asian Review)

Greece is seeking improved financial bids from its three bidders for control of the Port of Thessaloniki. (Journal of Commerce)

The White House will nominate Derek Kan, a general manager for Lyft and member of the Amtrak board, as undersecretary of Transportation for policy. (American Shipper)

The Global Port Tracker report projects container imports at major U.S. ports to grow 7.3% in the first half of this year. (DC Velocity)

Singapore's ST Engineering is developing self-driving buses and shuttle vans for use in the city. (Singapore Business Review)

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.

Subscribe to this email newsletter by clicking here: http://on.wsj.com/Logisticsnewsletter .

Write to Paul Page at paul.page@wsj.com

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April 12, 2017 06:43 ET (10:43 GMT)

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