Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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The shipping industry's burgeoning new alliances are sowing concern on farms. Agriculture exporters across the U.S. heartland say they expect the expansive new tie-ups between container lines will leave them fewer choices, longer routes and higher prices to get goods to international markets, Michael A. Pollock reports in the WSJ. Their concern is less about overall capacity than the logistical challenges and economic mismatches that are starting to hit supply chains as ship operator offer bigger vessels but fewer port calls. Farmers say that's made the longstanding problem getting containers into export zones more complicated and added new delays as distribution channels get more choked with sudden surges of containers. Carriers insist exporters of corn, soybean, wheat and other commodities have little to worry about, arguing capacity will remain robust while operators save on costs.

Target Corp.is turning its online and store sales strategy in a decidedly lean direction. While competitors are making deals and adding inventory as they ramp up investment in e-commerce, the WSJ's Khadeeja Sadfar reports that Target is focusing more on improving foot traffic in its stores while trying to improve profit margins for its online sales. That's something of a turn away from the shipping arms race underway across much of the sector as retailers strike deals and chase new sales categories -- mostly to compete with the rapid growth at Amazon.com Inc. E-commerce and digital remains only a sliver of Target's sales, and Target missed its digital sales growth goal last year by a wide margin. The company is testing programs aimed at turning that business around, but executives are paying closer attention to where they think there shoppers will spend more of their time: in the stores.

A glut in agriculture products is leading to some big changes in supply chains far from the farms. Facing overstuffed silos and forecasts for another huge harvest this year, U.S. farmers are wooing new customers, from car makers to toy companies. The WSJ's Benjamin Parkin reports corn and soybeans now are in the recipe for Ford Motor Co. seat cushions, IKEA mattresses and even road-paving materials. Adidas AG's Reebok brand recently unveiled sneakers made with corn. Agriculture groups are looking for the new uses out of necessity: U.S. corn and soybean stockpiles swelled to a record combined 10.35 billion bushels in the first quarter of 2017 and soybean futures have fallen more than 10% since mid-January. The new uses get attention, but commodity groups say they're still only a fringe in a market that really needs "uses that develop 5 billion bushels of demand."

TRANSPORTATION

Shipping containers are turning up in some of the most unlikely places. While ocean transport operators are hoping for some sort of recovery from tough times, the WSJ's Costas Paris reports the containers at the heart of the business have never been in greater demand. From a burger joint on New York's Long Island to a seven-story apartment block in South Africa and an extreme-sports park in Huangshan, China, the boxes that have changed the face of global trade are becoming an increasingly popular tool in architecture. Their durability has long made them useful in areas such as humanitarian relief, but designers more recently have been drawn to the industrial look and their utilitarian feel. The second life for the tools of trade is no small thing for shipping companies. Maersk Line sold 70,000 boxes for up to $1,300 apiece last year, making that a multi-million dollar business in a market the carrier says "is still discovering itself."

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QUOTABLE

IN OTHER NEWS

Ford aims to cut its global workforce by 10%. (WSJ)

U.S. home sales rose in the first quarter at the fastest pace in a decade. (WSJ)

China's industrial output slowed in April, part of a string of reports showing the country's economy getting weakening. (WSJ)

European officials are objecting to provisions of China's "One Belt One Road" initiative, saying the plans don't offer transparency and standards in tendering contracts. (WSJ)

Nissan Motor Co.'s relationships with auto part suppliers have fallen to the point that it ranks last among in a survey six major auto makers in North America. (WSJ)

A judge ordered Uber Technologies Inc. to return driverless-car files allegedly stolen from Alphabet Inc. and barred a key executive there from working on certain technology. (WSJ)

Cotton futures prices have been soaring, catching spinners and textile mills off guard. (WSJ)

Boeing Co. will assemble new U.S. Air Force trainer jets at its main military aircraft facilities in Missouri if it wins a three-way contest for the program. (WSJ)

U.S. grocery cooperative Central Grocers Inc. received a roughly $100 million bid for the 19 Strack & Van Til stores it plans to sell under its bankruptcy reorganization. (WSJ)

Lab-equipment company Thermo Fisher Scientific Inc. will buy drug-development technology company Patheon NV for about $5.2 billion. (WSJ)

BMW warned it could abandon production in the U.K. under harsh Brexit terms. (Agence France-Presse)

Vietnamese low-cost car maker Thaco says it has sharply increased sourcing of parts from local suppliers as it scales up outsourced manufacturing for Western auto companies. (Nikkei Asian Review)

Global container shipping volumes grew 10% in the first quarter. (American Shipper)

South Korea's Shipbuilding & Marine Engineering is set to receive its $6 billion bailout after a court dismissed an appeal by a group of investors to block the move. (Lloyd's List)

Container line Evergreen Marine Corp. swung to a $5.6 million first-quarter profit after losing $219 million a year ago. (Seatrade Maritime)

The International Chamber of Shipping trade group wants the International Maritime Organization to adopt "dramatic" carbon reduction targets. (Maritime-Executive)

Private-equity firm TPG Capital bought a controlling stake in supply-chain software firm Llamasoft Inc. for an undisclosed sum. (DC Velocity)

Singapore Post took an impairment charge on its acquisition for TradeGlobal, saying the U.S. e-commerce firm has "significantly underperformed." (Reuters)

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 16, 2017 06:32 ET (10:32 GMT)