Today”s Top Supply Chain and Logistics News From WSJ
By Paul Page Sign up:With one click, get this newsletter delivered to your inbox. Freight railroads are depending on grain to get healthy.
Farmers across the Midwest are expected to bring in a record harvest this year, the WSJ’s Doug Cameron and Jesse Newman report, providing a boost to rail operators that have been reeling from the collapse in energy shipments. Farms are projected to produce about two billion more bushels of corn and soybeans than last year, and railroads are benefiting, with shipments of grain and soybeans up 6.5% this year. That’s reverberating across rail operations and the financial reports of companies across the railroad supply chain, from equipment companies seeing greater demand for cars to carriers trying to keep operations moving.
Rail analysts say the growth is triggering a fundamental shift in the business, as carriers and car owners convert tank-car orders to grain cars while investing in track to speed more grain to growing export markets. A downturn in the market for office space in the region around New York City is turning into an opportunity for warehousing. A developer in northern New Jersey recently tore down a 500,000-square-foot office building to clear the way for 800,000 square feet of industrial space, the WSJ’s Keiko Morris reports, a sign of the shift in regional real estate demand from desks to distribution.
E-commerce is a big driver, with fulfillment of online sales putting a growing premium on positioning goods with good access to highways, ports and people. Office vacancy rates, meantime, are in the double digits while industrial space is virtually full, boosting prices for warehouse space. With demand for distribution centers growing nationally, developers expect to see more office-for-industrial conversions in markets such as Chicago and Los Angeles.
ECONOMY & E*TRADE One of the world’s biggest ship owners is viewing the incoming Donald Trump presidential administration with both confidence and concerns. Shipping magnate John Angelicoussis, who owns a sprawling fleet of dry bulk vessels and tankers, tells the WSJ’s Costas Paris there is “no question” Mr.
Trump’s focus on infrastructure will generate new business for the ailing shipping industry. But Mr. Angelicoussis also fears Mr.
Trump’s pledges to tear up trade deals will create new hurdles for moving goods even as global trade is already faltering. It’s a concern common in the international business world, where operators are anxious to see deregulation and other policies friendly to business put into action while the populist strains of the campaign are muted. Mr.
Angelicoussis believes infrastructure and energy will be top priorities, however, rather than a trade war that would produce “no winners.” QUOTABLE IN OTHER NEWS
Leaders of Pacific Rim nations meeting in Peru vow to strengthen economic ties in the face of rising protectionism. (WSJ) The dollar reached a 13-year high on world markets, moving closer to parity with the euro and higher against the yen. (WSJ) A basket of leading economic indicators for the U.S. increased 0.1% in October. (WSJ)
Support staff at Chicago’sO’Hare International Airport are threatening a strike this week that could disrupt flight operations. (WSJ) Apparel retailer The Limited Stores hired Guggenheim Partners as financial adviser to explore a possible sale. (WSJ) Williams-Sonoma Inc. gave a downbeat forecast as the retailer faced retreating third-quarter sales at its Pottery Barn brand. (WSJ)
Increasingly confident container shipping lines are seeking steep rate increases heading into winter. (The Loadstar) Wal-Mart Stores Inc. is studying use of blockchain technology to help ensure food safety. (Bloomberg) India’s decision to replace much of the nation’s cash supply in a single day created an insurmountable logistics hurdle. (The Hindu)
Container line CMA CGM SA swung to a £268 million third-quarter loss and completed repayment of a loan for its purchase of Neptune Orient Lines. (Maritime Executive) Caterpillar Inc.’s global retail sales fell 12% for the three months ending Oct.
31. (Reuters) The South Carolina Ports Authority is seeking a federal permit to build a £40 million rail facility to link the Port of Charleston with markets to the north. (Charleston Post and Courier)
Amazon.com Inc. is setting plans for a second big fulfillment center in Jacksonville, Fla. (Jacksonville Daily Record) GE Transportation and the Port of Los Angeles are cooperating on a £1.3 million program to track imported cargo containers. (Long Beach Press Telegram) North American metals shipments to machine shops grew 9.6% from September to October while inventories declined. (American Machinist)
Parcel shipments at Royal Mail PLC grew 2% in the six months ending Sept.
25, but the operator raised its cost- cutting targets as letter volume and profit fell. (The Guardian) China’sExport-Import Bank is committing £1 billion to support Nigeria’s trade and manufacturing-focused special economic zones. (Punch) Russian heavy cargo specialist Volga-Dnepr Group ended the 10-year-old joint venture with Ukraine’sAntonov Airlines for AN-124 freighter services. (Air Transport World)
Texas grocer Randalls launched home delivery in the Houston and Austin areas. (San Antonio Express-News) ABOUT US Paul Page is deputy editor of WSJ Logistics Report.
Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @lorettachao and @EEPhillips_WSJ, and follow the WSJ Logistics Report on Twitter at @ WSJLogistics.
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