Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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Maersk Line says the worst is over for the global container shipping industry. The unit of Danish shipping-and-oil giant A.P. Moller-Maersk says the container market is starting to emerge from one of the worst industry downturns, the WSJ's Costas Paris and Dominic Chopping report, with demand outgrowing capacity for the second consecutive quarter. The recovery isn't coming fast enough to boost the bottom line at the world's biggest container carrier, which lost $80 million in the first quarter because of higher bunker fuel costs. But Maersk says average freight rates were up 4.4% in the first quarter, bolstering reports from industry groups and other carriers that show operators are seeing more equilibrium in the shipping market. Overseas Orient Container Lines recently said its revenues and "liftings" were just about in sync in the first three months of the year. With shipping capacity largely stable, the carriers just need a modest boost in demand to give a lift to their earnings.

U.S. exporters may be getting a big boost from an unlikely direction. The U.S. and China have agreed on broad terms to grant certain industries easier access to Chinese markets, the WSJ's Christopher M. Matthews, Jacob M. Schlesinger and Jacob Bunge report. The pact could be a major boon to U.S. agriculture exporters and natural gas producers. The governments plan to release a joint diplomatic communiqué this month aimed at rebalancing and increasing trade between the two countries, the first result of an agreement last month to increase U.S. exports to China. U.S. companies have long sought better access to China, including its financial and agricultural markets. But producers of liquefied natural gas seem to be in an especially strong position to gain from new trade flows. Dozens of companies are seeking permits for new, billion-dollar LNG facilities, setting the U.S. to become a net exporter of gas by next year.

Aircraft manufacturers are having a hard time getting their supply chains to meet speeded-up production timetables. Boeing Co. is trying to recover from a stall in its new 737 Max jetliner program, the WSJ's Robert Wall reports, after temporarily idling its fleet because of a flaw in some of its engines. The problem with the CFM International LEAP-1B engines follows bumps Airbus has had in the production of A320neo planes, its rival to Boeing's 737 Max, amid issues with an engine supplier by Pratt & Whitney. The jet makers are contending with seemingly conflicting business demands. Boeing and Airbus are trying to accelerate production of jets to meet strong demand from airlines in a bullish period for the carriers. But the companies also are trying to incorporate ambitious new elements into their planes and their highly sophisticated jet engines, raising the pressure on suppliers and the stress on the manufacturers.

SUPPLY CHAIN STRATEGIES

The fulfillment field is getting more crowded. Warehouse marketplace Flexe Inc. says it is now offering online retailers nationwide next-day delivery, WSJ Logistics Report's Jennifer Smith writes, adding to a drive by companies to build services that compete with Amazon.com Inc. The service extends Flexe's business model beyond its origins offering on-demand storage, matching companies with extra warehouse room with operators looking to fill short-term needs. It's the latest sign of the competition for fulfillment services that Amazon has awakened with its fast and cheap shipping and the third-party logistics services it offers smaller retailers that use its online marketplace. FedEx Corp. recently expanded in that arena, and operators like Radial are offering tailored services that include space and shipping out parcels. They're hoping that there are enough retailers that want to look like Amazon without working with the etailing giant to make a business.

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IN OTHER NEWS

The number of unemployment claims drawn by U.S. workers for longer than a week, or continuing claims, dropped to the lowest level since November 1988.

The producer price index, measuring changes in the prices that U.S. companies receive for goods and services, rose a higher-than-expected 0.5% in April. (WSJ)

The Senate confirmed Robert Lighthizer as U.S. Trade Representative, paving the way for the Trump administration to accelerate plans to redraw American trade policy. (WSJ)

Macy's Inc. reported another quarter of falling sales, ahead of results from other retailers battling problems with store traffic and online competition. (WSJ)

A judge asked prosecutors to investigate Uber Technologies Inc. and one of its engineers for potential theft of trade secrets involving autonomous-vehicle technology from Google. (WSJ)

U.S. security officials are considering expanding a ban on laptops and other large electronics in aircraft cabins to include some trans-Atlantic routes. (WSJ)

Emirates Airline's profit plunged 70% in its just-ended fiscal year amid falling passenger bookings, as freight revenue declined 5%. (WSJ)

Pierre Beaudoin agreed to step down from his executive role at Bombardier Inc. but will remain as nonexecutive chairman. (WSJ)

China's largest dairy company, Inner Mongolia Yili Industrial Group Co., is preparing an $850 million bid for U.S.-based Stonyfield Farm Inc. (WSJ)

Nissan Motor Co. warned that a slowing U.S. car market and rising costs would weigh on earnings this fiscal year. (WSJ)

South Carolina legislators overrode the governor's veto of a measure increasing the state's gas tax. (Charleston Post and Courier)

Central Freight Lines is suing Amazon Fulfillment Services, claiming the company owes millions of dollars in shipping fees and tried to bully Central into trucking goods at reduced rates. (Waco Tribune-Herald)

Schneider National Inc. reported a 19.8% decline in net profit in its first quarter as a public company. (Milwaukee Journal-Sentinel)

Deutsche Post DHL Group reported a 1.4% gain in operating profit in the first quarter on a 7.1% boost in revenue. (Post & Parcel)

Troubled container line Yang Ming Transport Co. narrowed its first-quarter loss by 75% to $29 million. (American Shipper)

Kuwait-based logistics provider Agility expanded its first-quarter net profit 11.4% on double-digit growth in air and sea freight volumes. (Air Cargo News)

Madrid-based startup Ontruck raised $10 million in Series A funding for its platform connecting businesses directly with road freight carriers. (TechCrunch)

The U.S. Army is searching for a midsize, unmanned air cargo vehicle to supply troops in the field. (Flight Global)

Domino's started using autonomous vehicles for pizza deliveries in Hamburg, Germany. (ZDNet)

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.

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

(END) Dow Jones Newswires

May 12, 2017 06:29 ET (10:29 GMT)