Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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Companies are scrambling to contain the massive cyberattack that rolled across the world, jarring some supply chains and raising new fears about risks in increasingly interconnected computer systems. Delivery giant FedEx Corp., German rail operator Deutsche Bahn AG and car maker Renault SA were among the thousands of businesses, public agencies, health care providers and other operators hit by the malware virus, the WSJ's Jenny Gross and Liza Lin report. Authorities in Asia and Europe were warning of more "ransomware" attacks today as computers powered back up after being shut over the weekend. The most high-profile computer-worm outbreak in nearly a decade will likely trigger broad and expensive assessments of security in systems across businesses that have become increasingly dependent on the technology that underpins their operations. Adding security patches to corporate networks that run older software is complicated, and ensuring the technology gates are locked has grown more difficult as companies connect networks of suppliers along global supply chains.

Amazon.com Inc. wants to get even deeper into the homes of consumers. The online giant is making a major push into furniture and appliances, adding heavyweight competition to territory held by Wayfair Inc and Pottery Barn owner Williams-Sonoma Inc. The WSJ's Brian Baskin and Laura Stevens report Amazon plans to build at least four massive warehouses focused on handling the bulky items that trucking companies sometimes call ugly freight and parcel carriers see gumming up their operations. Amazon sees beauty in the business, though: Furniture is one of the fastest-growing segments of U.S. online retail, growing 18% in 2015, second only to groceries, and some 15% of the $70 billion U.S. furniture market has moved online. Players are struggling to get the market right, however. Delivering couches and dining sets is more complicated and expensive than handling conventional parcels, and that may provide a fresh challenge to Amazon's budding self-controlled logistics network.

Trucking companies have a new worry beyond the tepid demand that's bogged down their business. Operators trying to trade in their vehicles are taking financial hits following one of the steepest plunges in used-truck prices since the recession. WSJ Logistics Report's Jennifer Smith writes the truckers are being sideswiped from two directions: Many are trying to downsize their fleets to combat the excess capacity that's kept freight rates low, but that's flooded the used-truck market. Many carriers are "upside down" on their trucks, says one expert, owing more on vehicles than the rigs are worth. That's dented the bottom lines at Swift Transportation Co., Knight Transportation Inc. and Werner Enterprises Inc. Prices for the average used Class 8 sleeper have fallen 22% in two years. Although prices seemed to have bottomed out, analysts expect excess supply of used rigs to loom over the industry into 2020.

ECONOMY & TRADE

Western companies are trying to get onto China's new "Silk Road." Multinationals including Honeywell International Inc., General Electric Co. and Caterpillar Inc. are moving forward with plans to participate in the country's "One Belt, One Road" initiative, the WSJ's Nina Trentmann reports, looking for opportunities in a $900 billion infrastructure project aimed at creating new pathways for trade. The plan that China displayed in a splashy promotional summit starting Sunday involves massive investment in roads, ports, rail lines and other infrastructure spanning Asia, Africa and Europe. There's already some opposition in various countries to China's heavy-handed approach to choosing contractors and suppliers, and companies moving forward with plans to provide materials, expertise and project management already have well-established relationships in Beijing. While Chinese firms may be the main contractors for projects such as port installations or bridges, Western firms say they will end up subcontracting to companies with experience integrating technology across borders.

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Not everyone is turning their back on the market for brick-and-mortar stores in the U.S. European retailers hungry for growth are pushing deeper into the U.S., the WSJ's Saabira Chaudhuri reports, with some using the problems at American retailers to pick up customers and prime locations. While U.S. retailers are shuttering shops at a record pace, Sweden's Hennes & Mauritz AB, Inditex SA-owned Zara and discount retailer Primark are among companies that have been adding storefronts in U.S. cities. U.S. operators, by contrast, will close more than 8,600 locations around the U.S. this year, and 19 retailers have filed for bankruptcy protection since Jan. 1. The European retailers' expansion won't come close to replacing the lost sites, but they'll bring some relief to the real-estate industry and help fill in some distribution channels that have been thinned out by the faltering retail trade.

QUOTABLE

IN OTHER NEWS

Oil prices jumped sharply today on a new agreement between Saudi Arabia and Russia. (WSJ)

Canada is moving toward banning oil tankers off the northern Pacific Coast. (WSJ)

U.S. retail sales expanded 0.4% in April, with sales at nonstore retailers including online sellers growing 1.4%. (WSJ)

U.S. consumer prices rose a modest 0.2% in April. (WSJ)

Germany's economy accelerated in the first quarter, led by a revival in global trade and buoyant construction activity. (WSJ)

National Air Cargo Inc. founder Christopher Alf wants to pay off the struggling military contractor's debts, enabling it to leave bankruptcy after 2 1/2 years. (WSJ)

Vietnam's apparel shipments to the U.S. rose 7.2% in the first quarter while shipments from China and Bangladesh declined. (Sourcing Journal)

Subaru Corp. streamlined the supply chain at its Indiana auto plant to reduce its standard inventory on hand from 1.25 days to 4.5 hours. (Automotive Logistics)

Major Asian suppliers to Apple Inc. are preparing to ramp up the flow of components for production of the new iPhone. (South China Morning Post)

Apple's manufacturing investment fund will provide $200 million to a Corning Inc. research facility in Kentucky. (TechCrunch)

Large amounts of corn and soybean imports into the U.S. appear to be wrongly labeled as organic. (Washington Post)

Chinese iron ore producers are showing more interest in exporting, posing a new competitive threat to exporters in other countries. (Nikkei Asian Review)

Mid-States Packaging Inc. will set up a manufacturing and logistics center near South Carolina's Port of Charleston to handle international trade in industrial plastic pellets. (Charleston Business)

Shipping line Hapag-Lloyd AG swung to a $66 million first-quarter loss as higher costs offset a 7% gain in volume. (The Loadstar)

Port of Oakland container shipping volume is growing while vessel calls are declining as carriers move toward larger ships. (American Shipper)

South Korea's Hyundai Merchant Marine Co. is buying the Total Terminal International cargo terminal at Spain's Algeciras port for $104.1 million. (Yonhap)

China's Yangtze River Express became the second cargo airline to withdraw from Brussels Airport because of tougher noise restrictions. (Lloyd's Loading List)

A Canadian transload services company is building a freight handling and rail center in Manitoba near the border with the U.S. (Canadian Shipper)

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 15, 2017 06:46 ET (10:46 GMT)