Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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The path to precision railroading isn't going to be smooth. CSX Corp. Chief Executive Hunter Harrison is warning shippers there will be "bumps in the road" as he tightens train schedules and puts into place new plans aimed at making the railroad leaner, faster and more profitable. The caution in a conference call on CSX's strong second-quarter earnings comes as the company is already seeing freight shipments slow down, the WSJ's Paul Ziobro reports, with some shippers reporting longer transit times and surveyed assessments of CSX service declining. The barbs that Mr. Harrison has favored cost-cutting over service have followed the veteran rail executive at other stops, and he dismisses that as an unjust perception. The effort is already improving CSX's financial results, and Mr. Harrison insists that after "a little pain and suffering" the railroad's network will work better for shippers as well.

Trade talks starting next month between the U.S., Mexico and Canada could carry big stakes for the direction of supply chains. The word that the countries would formally open a potential overhaul of the North American Free Trade Agreement came after the Trump administration outlined key goals that include improving access for U.S. goods exported to Canada and Mexico, the WSJ's William Mauldin reports. That White House also wants much stronger labor standards in a new Nafta, an outcome that could raise labor costs in Mexico and change the economic measures manufacturers have used in shifting factory work from the U.S. to Mexico. That also could bring transportation issues to the table. Federal regulators have allowed a handful of Mexican truckers to continue to operate in the U.S. since a controversial test program called for under Nafta ended in 2014, and some trucking companies and the Teamsters union may raise new objections to the provision.

India's new goods and services tax is upending traditional business processes, and that's just fine with the country's truckers. The freight and logistics sector has provided an important success for the government's major economic initiative, the WSJ's Corinne Abrams, Debiprasad Nayak and Anant Vijay Kala report, as checkpoints for collecting state taxes have come down and long delays and heavy costs that include bribery have retreated. India's state-tax system has been part of the country's notoriously inefficient transportation operations, and a successful overhaul could trigger bigger improvements in infrastructure and changes to lure new foreign investment. The GST's impact on supply chains hasn't been all sunny: the enormous textile industry has had disruptions as traders adjust, and some businesses are hunkering down as they get paperwork in order. But the fragmented and inefficient logistics industry is already counting financial gains, and a projected 20% savings in logistics costs could spur more shipping once the new tax system becomes clearer.

TRANSPORTATION

The legal dispute between Apple Inc. and chip supplier Qualcomm Inc. is turning into a battle across the electronics production supply chain. Several major smartphone makers, including contract manufacturers for Apple, are joining the company's claim that Qualcomm has charges excessive licensing fees and violates antitrust laws, the WSJ's Tripp Mickle reports, expanding a case that now covers some of the technology world's biggest factory operators. Taiwan-based contract manufacturers Foxconn Technology Group, Compal Electronics Inc. Pegatron Corp. and Wistron Corp. jumped into the fight with a lawsuit against Qualcomm filed in federal court in San Diego this week. That suit comes as Qualcomm filed a new complaint against Apple in Germany looking to stop the shipping of the company's new iPhone into the country -- mirroring the chip maker's moves earlier this month to block imports of some Apple devices into the U.S. Getting the contract manufacturers into the fray raises the stakes for both Qualcomm and Apple.

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QUOTABLE

IN OTHER NEWS

The Trump administration launched its first economic talks with China, amid signs that new difficulties were emerging in the friendly dialogue the two governments have been holding. (WSJ)

U.S. housing starts rebounded in June, growing 8.3% while residential building permits also rose. (WSJ)

Canadian factory sales rose for a third straight month in May on broad-based gains led by the automotive and chemical sectors. (WSJ)

Cash held abroad by U.S. non-financial companies soared last year to a new record. (WSJ)

Second-quarter profit at W.W. Grainger Inc. fell 43% as the industrial parts supplier extended its cost-cutting restructuring plan. (WSJ)

McCormick & Co. will acquire Reckitt Benckiser Group PLC's food division, the latest in a wave of deal activity in the global packaged-foods sector. (WSJ)

China says it will stop accepting shipments of rubbish such as waste plastic and paper as part of a campaign against "foreign garbage." (Reuters)

California's ports of Los Angeles and Long Beach said their joint effort to wean their operations off diesel fuel could cost up to $14 billion. (Long Beach Press-Telegram)

Self-driving truck startup Embark raised $15 million in a Series A funding round and struck a pact with truck manufacturer Peterbilt. (TechCrunch)

The American Trucking Associations projects U.S. freight volumes will grow at a 3.4% average annual rate through 2023. (Logistics Management)

China's Cosco Shipping Energy Transportation forecast a steep profit decline in the first half of the year amid falling rates for ocean tankers. (Lloyd's List)

Alphaliner say Singapore-based Pacific International Lines is the likely next acquisition target in container shipping consolidation. (The Loadstar)

Volvo AB raised its forecast for North American truck sales after reporting its truck deliveries in the region fell 1% in the second quarter. (Heavy Duty Trucking)

U.S. truck trailer orders grew for the seventh straight month in June and production reached the highest level in two years. (Commercial Carrier Journal)

Railcar maker Freightcar America Inc. named Jim Meyer, former chairman of Commercial Specialty Truck Holdings, as its new president and chief executive. (Crain's Chicago Business)

Portland authorities approved an expanded refrigerated storage center for shipping company Eimskip at the Oregon city's waterfront. (Portland Press Herald)

Kuehne + Nagel AG's net turnover grew 8.2% in the first half of 2017, helped by an 18% gain in airfreight volume. (Air Cargo Week)

Four in five executives surveyed said they have a "responsible supply chain," but less than one-quarter have policies to address major issues. (Supply Chain Quarterly)

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 20, 2017 05:48 ET (09:48 GMT)