Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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Boeing Co. is bringing more of its supply chain in-house in an effort to cut costs. The new effort follows the aircraft maker's decision to produce wings for its new 777x jet on its own, and the WSJ's Doug Cameron reports the self-supply plan will include more automation and job cuts at factories. The drive will be felt around the world: Boeing is at the heart of a sprawling global eco-system of aerospace components manufacturing and distribution, and the company buys between 60% and 70% of its parts from external suppliers. Those companies are being pressured to reduce prices and boost efficiency, often in return for more work, as plane makers try to speed up production. Boeing is convinced, meantime, that new automation technology can help the company produce goods without adding a big labor force while keeping a greater grip on the flow of components.

Changes in shopping habits are taking a growing toll on big consumer brands, and the responses of the product makers could ripple across consumer-goods supply chains. Overall purchases of consumer packaged goods in the U.S. declined 2.5% in unit terms in the first quarter, the WSJ's Sharon Terlep, Jennifer Maloney and Annie Gasparro report, hitting results at companies including Procter & Gamble Co., PepsiCo Inc. and Nestlé SA. The results suggest that the sector is undergoing a deep structural shift: The 20 largest consumer packaged goods companies last year had flat sales while smaller ones posted sales growth of 2.4%, according to Nielsen. Those smaller companies tend to be nimbler and closer to their end-customers, allowing them to respond more quickly to changing consumer trends. At the same time, big retailers like Wal-Mart Stores Inc. are reducing inventories, leaving the big brands with few of the benefits of scale and much of the pain.

The rise of the Internet of Things has meant a huge windfall for the chip makers supplying the "brains" for smart devices. Semiconductor manufacturers receive enormous orders six months in advance from buyers looking to install chips in computers, servers, and, increasingly, cars and appliances. The importance and growing ubiquity of these largely anonymous pieces of technology has given rise to an industry bigger than the U.S. fast-food and auto sectors, and one where consolidation has created high barriers for new entrants, write Timothy W. Martin and Eun-Young Jeong. Technology companies will pay a premium to keep the semiconductors flowing to their device factories, pushing up chip prices steadily in recent years. That in turn drives up the price of smartphones and other gadgets for consumers, though experts see those hikes starting to ease as more manufacturers learn how to produce high-end chips.

ECONOMY & TRADE

A trade battle may be simmering in the solar-power industry. Bankrupt U.S. solar panel maker Suniva Inc. is asking the Trump administration to impose trade tariffs on all foreign-made solar cells, the WSJ's Cassandra Sweet reports, in a last-ditch effort to survive. The company is making the case at the U.S. International Trade Commission to fight off low-cost solar panels that are mostly manufactured in Asia and have glutted the global market. That's left prices diving and the entire U.S. solar manufacturing industry on the ropes. Georgia-based Suniva shut down two U.S. factories in filing for bankruptcy last week, but the company's fight to restore manufacturing jobs also carries more complicated signs of globalization in solar power. Suniva is majority owned by Hong Kong-based Shunfeng International Clean Energy Ltd., whose biggest shareholder has built a solar-power supply chain from the remnants of China's largest solar manufacturers.

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QUOTABLE

IN OTHER NEWS

The White House is debating whether to issue a formal threat to withdraw from the North American Free Trade Agreement. (WSJ)

Mexico's peso posted its biggest loss in three months amid reports the Trump administration was weighing an executive order to withdraw from Nafta. (WSJ)

The Trump administration is set to launch a probe of aluminum imports that could end in tariffs or other trade restrictions on the metal. (WSJ)

European car makers reported positive first-quarter results, signaling the region may soon return to its precrisis level for new vehicle sales. (WSJ)

Mexican state oil company Pemex has taken out oil hedges to protect income this year from a possible further decline in prices. (WSJ)

Canadian retail sales fell sharply in February on lower auto sales. (WSJ)

United States Steel Corp. reported a surprise quarterly loss and plans to overhaul mills at the expense of profit this year. (WSJ)

Tyson Foods Inc. plans to raise pay and expand training to boost retention and reduce injuries in notoriously tough slaughterhouse jobs. (WSJ)

CBRE Research says global shopping center completions rose 11% in 2016. (WSJ)

U.K. online fashion retailer Boohoo.com PLC is seeing a sharp upturn in sales because of the decline in the value of the pound. (WSJ)

The World Trade Organization ruled Mexico may take retaliatory measures against the U.S. for labeling rules regarding dolphin-safe tuna that Mexico says restricts its market access. (NPR)

First-quarter net profit at Norfolk Southern Corp. rose 12% as coal revenue grew 20% from a year ago. (Virginian-Pilot)

Shipping giant Maersk Line and other A.P. Moller-Maersk transport operators will use the Microsoft Corp. Azure cloud computing platform for digital services. (American Shipper)

The Baltic Exchange may establish a container shipping index to move beyond its role in bulk shipping markets. (Journal of Commerce)

The Pentagon awarded FedEx Corp. a five-year, $2.35 billion contract for domestic and international parcel delivery. (Reuters)

Developer Hines plans a one-million-square-foot warehouse complex in the burgeoning industrial market south of Dallas. (Dallas Morning News)

Norway's Frontline made a new, larger offer to take over rival tanker operator DHT Holdings. (Splash 24/7)

The DB Cargo unit of Deutsche Bahn railroad will cut jobs in the U.K. and reset work rules under a new pact with unions. (Railway Gazette)

Vietnamese airline Vietjet plans to launch its first freighter service in October. (The Loadstar)

Google co-founder Sergey Brin is secretly building an airship. (Bloomberg)

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.

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

(END) Dow Jones Newswires

April 27, 2017 06:58 ET (10:58 GMT)