Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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The internal combustion engine has certainly had a good run in the transportation world. That history may be reaching a turning point, however, with Volvo's announcement that all of its new models would be either fully electric or a hybrid starting in 2019. That makes Volvo the first major auto maker to abandon the technology that has powered the industry for more than a century, the WSJ's William Boston reports, and sets new momentum to build infrastructure to support electric vehicles. It highlights the logistics and manufacturing tightrope car makers are walking, as the industry seeks to balance ongoing research into electric vehicles with the long product cycles that typically involve a range of different suppliers. Industry analysts are looking for an economic "tipping point" when the cost of meeting tougher emissions regulations with conventional engines makes the electric cars more affordable. That would trigger a shift in manufacturing supply chains, and it would likely spur changes in the power behind commercial trucks.

Coal business is in a strong rebound, if freight rail shipping numbers are any measure. But plans at the utilities that drive coal demand suggest long-term prospects for the industry are grim. From small power companies to big, multi-state operators, energy providers are transforming the U.S. power grid, the WSJ's Russell Gold reports, expanding their use of natural gas, wind and solar power while shrinking the role of coal and nuclear power. The transition comes as the Trump administration has signaled it would like to help coal make a comeback, and says it wants to "revive and expand" nuclear energy. Utilities are heading in another direction, permanently shuttering three of every 10 coal generators in the past five years. Oregon utility PacifiCorp plans to spend $13.6 billion on wind and solar generation, and North Carolina-based Duke Energy Corp. expects to get 44% of its power from gas and renewables by 2026, up from 7% in 2005, with investments that will set its power plan for years to come.

The consumer-sales upheaval that's roiled the retail world is hitting Southern California garment sellers hard. Jeans maker True Religion Apparel Inc. became the latest in the roughed-up field to enter bankruptcy protection, the WSJ's Patrick Fitzgerald reports, while seeking to reset its business by building up its digital footprint while scaling back physical stores. The company is the eighth apparel seller based in the region to hit bankruptcy court in the past two years, including American Apparel. Southern California garment sellers and manufacturers, which employ more people making and designing jeans and jackets than other pockets of the country, have been hard hit as retailers shutter stores at a record pace. Like the others, True Religion's sales have been declining for several years as customers moved away from brick-and-mortar and mall shopping toward online retailing. At the same time, premium denim sellers have been losing ground to fast-fashion and low-price apparel retailers.

ECONOMY & TRADE

Tensions over globalization in the U.S. and elsewhere may fuel more trade growth between Germany and China. Meeting ahead of the international summit of the world's biggest economies, German and Chinese leaders are pledging to boost what is becoming one of the world's biggest trading relationships, the WSJ's Andrea Thomas reports, with significant new commercial deals already lined up. The pacts include an agreement between car maker Daimler AG and BAIC Motor Corp. to develop electric cars and a Chinese order for 140 aircraft from Airbus SE. Those deals will push more goods through distribution pipelines that are already growing: Combining exports and imports, China was Germany's leading trading partner for the first time last year, beating the U.S. and France, and China was Germany's biggest supplier of imports. Closer ties will make Germany a big destination point for China's growing maritime business, and likely a big backer of the infrastructure behind China's "One Belt, One Road" initiative.

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IN OTHER NEWS

Federal Reserve officials are readying a new phase in monetary policy that would slowly shrink the central bank's large portfolio of bonds and other assets. (WSJ)

Inflation in the Group of 20 largest economies fell for the fourth straight month in May to its lowest level since last August. (WSJ)

The eurozone's economic recovery likely accelerated in the three months to June, according to business surveys. (WSJ)

Nike Inc. faces a challenge in finding new ways to sell its sport apparel while protecting its cultural cachet. (WSJ)

The use of bitcoin in transactions recently exceeded $40 billion, stretching the limits of the digital currency's market structure. (WSJ)

Emirates Airline and Turkish Airlines said their passengers were cleared to again use laptops and other electronics on U.S.-bound flights. (WSJ)

The board of struggling Indian online marketplace Snapdeal rejected a takeover offer of up to $750 million from larger rival Flipkart. (LiveMint)

Amazon.com Inc. is facing significant logistics hurdles in Japan, where it says some products bought online are being delivered late or not at all. (Nikkei Asian Review)

Logistics operator Agility will pay $95 million to settle civil fraud claims that it overcharged the U.S. military for services between 2003 and 2010. (American Shipper)

China's State Council set new streamlined freight transport regulations and infrastructure plans aimed at lowering logistics costs. (Xinhua)

A faulty boiler caused an explosion at a Bangladesh garment factory that killed 13 people. (Agence France-Presse)

Texas-based flatbed trucker Daseke Inc. acquired The Steelman Companies, its third buy in just more than two months. (Commercial Carrier Journal)

South Korea's SM Lines plans to add nine container ships this year as it expands services. (Journal of Commerce)

A lawsuit seeks to halt DryShips Inc.'s continuing practice of raising funds through new share issues. (Lloyd's List)

The International Air Transport Association said airfreight's "cyclical growth period may have peaked" after global demand soared 12.7% in May. (Reuters)

CIT Group Inc. will sell its European rail leasing business to German firm VTG Aktiengesellschaft for $890 million. (Progressive Railroading)

German logistics operator the Rhenus Group will move into Australia with the acquisition of forwarder O'Brien Customs and Forwarding Pty Ltd. (Logistics & Materials Handling)

Chinese ship leasing companies now control nearly 1,000 ships, 58% more than a year ago. (Splash 24/7)

U.K. developers are seeking approval for a 1.9 million-square-foot warehouse to be built underground. (Lloyd's Loading List)

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. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

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

(END) Dow Jones Newswires

July 06, 2017 06:53 ET (10:53 GMT)