Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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The most important targets of a new labor pact at West Coast ports aren't even parties to the agreement. The deal approved by longshore workers to extend their current contract by three years, to July 2022, is aimed at retailers, manufacturers and other importers that have been uneasy over labor disruptions at big gateways, and at ports in other parts of the country that are trying to convince those shippers to shift their supply chains. WSJ Logistics Report's Erica E. Phillips and Jennifer Smith write that the approval pushes off prospects of a repeat of the contentious talks of 2014 and early 2015, when the nation's busiest ports ground to a near-standstill. The deal marks a kind of challenge to organized labor at ports on the East and Gulf coasts, where operators hope to use the opening of an expanded Panama Canal to lure more cargo. At stake are jobs, along with untold millions of dollars to get ports, roads and rail operations lined up for the business.

There may be life after liquidation for some faltering retail brands -- if they can get the logistics right. Investment groups have been snapping up retailers that have entered bankruptcy in the ongoing upheaval in the sector, the WSJ's Erica E. Phillips and Stephanie Gleason report, betting that brands like Wet Seal, American Apparel and The Limited can refashion their business models as online storefronts. Moving to web-only sales becomes a race against the clock, however, as companies revamp supply chains to retain fickle customers. The strategy is part of the changing landscape of retail, where fast-fashion, e-commerce and new marketing and shipping strategies are changing the business. Companies have popped up to handle inventory and distribution, helping brands make the transition from brick-and-mortar chains to online labels. Replacing store rents and employees with warehousing and shipping can pull more profit out of clothes sales, but experts say the margin advantage can wear out quickly if they don't move fast enough.

The last-mile is turning into fertile ground for hiring. Courier and messenger companies added 3,200 jobs last month, WSJ Logistics Report's Jennifer Smith, surpassing the previous high for the sector set last December and demonstrating that e-commerce demands are driving year-round changes in logistics. Courier companies, including the parcel carriers that deliver online purchases, have added more than 30,000 jobs in the past year. That's second in the logistics sector only to warehousing and storage operators, who cut 2,200 jobs in July in an uncharacteristic pullback. An earlier decline in that sector was revised to show a gain, however, and broader trends suggest warehouse will pick up. Industry executives say the labor market is tight, and online retail colossus Amazon.com Inc. held job fairs last week looking to add thousands of jobs. More importantly, U.S. online sales grew more than 10% year-over-year in the second quarter, far ahead of overall retail sales, putting plenty of goods in the pipeline for delivery.

SUPPLY CHAIN STRATEGIES

Toyota Motor Corp. is redrawing its North American supply chain with its decision to build a $1.6 billion American car plant with Mazda Motor Corp. The plan to open the factory by 2021, at a location yet to be decided, marks a new win for the U.S. manufacturing sector, while extending a restructuring of automotive production in North America as car makers adjust to changing market demands and potential changes in trade guidelines. The WSJ's Sean McLain reports the new U.S. plant will produce 300,000 vehicles and employ 4,000 people. Half of those vehicles will be a new Mazda crossover, the rest Corolla sedans that had been slated for a new plant in Guanjuato, Mexico. The Mexican plant, meantime, now will make the Tacoma pickup truck, nearly doubling production capacity of the popular model to 400,000 vehicles. By the time the factory dust settles, Toyota's North American operations may look more complicated, with more parts and vehicles moving across borders than before.

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A dark and efficient international supply chain for Middle Eastern antiquities plundered by Islamic State has formed in the shadows of the world's highly specialized art distribution channels. The trade in ancient objects from Iraq and Syria is handled through middlemen across complicated networks before they are sold to dealers in the West. The WSJ's Benoit Faucon, Georgi Kantchev and Alistair MacDonald report the stream of plundered precious artifacts has grown as ISIS's territorial grip in the region has faded and the group has sought new sources of revenue, building a trade that will ensure the group's legacy of looting will linger for many years. It's a grim example of illicit distribution operations being woven into legitimate trade channels, with the movement of goods spanning basic smuggling -- Bulgarian police last year found ancient coins disguised as buttons on jackets -- to the "laundering" of artifacts through art dealers and warehouses in Europe and Asia. Middlemen and dealers build profits along the way, with each step costing the Middle East a bit of its history.

QUOTABLE

IN OTHER NEWS

Twelve dock workers and a firefighter sustained injuries after a container ship leaked a hazardous material at California's Port of Long Beach. (Associated Press)

U.S. imports fell 0.2% in June on declining flows of consumer goods. (WSJ)

Banks cut their forecasts on oil prices for a third consecutive month, predicting prices will average $53. (WSJ)

Senate Democrats are holding up confirmation of three top Transportation Department nominees, including the head of the Federal Railroad Administration. (WSJ)

Workers at a Nissan Motor Co. plant in Mississippi voted against forming a union. (WSJ)

Blue Apron Holdings Inc. is moving its New Jersey fulfillment center from Jersey City to Linden and expects to lay off more than 400 people. (WSJ)

State-owned oil giant Saudi Aramco is in talks to invest up to $2 in a Chinese state-owned oil refinery. (WSJ)

Electric-car startup Faraday Future pledged its corporate headquarters in Los Angeles as collateral to secure a $14 million rescue loan. (WSJ)

Uber Technologies Inc. knowingly leased unsafe cars to drivers in Singapore. (WSJ)

Kraft Heinz Co and Kellogg Co. joined the litany of food makers plagued by lackluster U.S. sales in the second quarter. (WSJ)

U.S. generic-drug prices are falling at the fastest rate in years, hitting earnings at pharmaceutical wholesalers and manufacturers. (WSJ)

Walnut farmers near a massive Northern California dam that nearly ruptured are seeking $15 million they say they lost in flooding. (WSJ)

New municipal bonds to fund infrastructure projects were down 19.4% through July this year from a year ago. (Reuters)

The Royal Bank of Scotland has written off a large chunk of shipping debt and hinted at further pain from its bad shipping loans. (Lloyd's List)

U.S. rail carloads declined 0.6% in July, with growth in coal volume slowing while grain and motor vehicle shipments fell sharply. (Logistics Management)

India's Mahindra Logistics Ltd, a unit of auto maker Mahindra and Mahindra Ltd., filed for an initial public offering. (Economic Times)

Second-quarter profit at Atlas Air Worldwide Holdings Inc. nearly doubled to $38.1 million as the freighter operator reported new contracts with Asia-based airlines. (The Loadstar)

China's Zhejiang Shipyard will lay off 300 of its 560 workers amid the yard's troubled bankruptcy reorganization. (Seatrade Maritime)

GSC Logistics will test battery-powered trucks for its drayage operations at the Port of Oakland. (American Shipper)

A Mexican court sided with farm groups in barring the import of potatoes from the U.S. (Potato Pro)

The distribution of bananas across New York City is a complicated logistics operation that tolerates few slip-ups. (New York Times)

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

August 07, 2017 06:45 ET (10:45 GMT)