Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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The talk over rewriting the sprawling North American Free Trade Agreement turns into the reality of negotiations this week. The U.S. talks with Mexico and Canada that begin in Washington on Wednesday carry high stakes for businesses in all three countries, the WSJ's Jacob M. Schlesinger, Robbie Whelan, Paul Vieira and Jacob Bunge write, and for the White House as it marks the first concrete attempt to translate President Donald Trump's strong protectionist campaign rhetoric into policy. Early signs have been largely reassuring to those who worry that the president's demands could uproot the continent's commercial ecosystem. Nafta over its 23 years has helped transform a region covering one-fourth of the global economy. The question now is whether U.S. negotiators can extract enough concessions from Mexico and Canada so that Mr. Trump can declare victory to his factory-worker base without upsetting his business backers. Many businesses across the continent hope for a quick resolution, complaining that uncertainty has already disrupted the flow of commerce.

U.S. consumers are changing the way they shop for food and that's leaving a bitter taste at regional grocery chains and their suppliers. The number of full-range groceries with at least $2 million in annual sales fell 6% last year and will decline by roughly a quarter in the next four years, the WSJ's Heather Haddon and Lillian Rizzo report, a shift being felt across supply chains and distribution channels. It's the result of increasingly fragmented food spending, with the consumer push toward discount grocers, club chains and e-commerce sites hitting middle-market grocers. That's roiling a U.S. perishables transport business that's been a strong performer in recent years and now is coping with increased volatility. Two Midwestern chains went into bankruptcy protection this year, and S&P Global Market Intelligence says the threat of food-retailer default is growing this year amid greater consolidation and competition. One distributor says some retailers already are responding by shifting business to better capitalized suppliers.

The world's biggest e-commerce companies are setting up India as the next big battleground over online sales. The $2.5 billion investment that Japan's Softbank Group plans to send to the Flipkart Group will give the country's top online seller big new backing to ward off Amazon.com Inc., the WSJ's Newley Purnell and Mayumi Negishi report, and the U.S. company's plan to spend $5 billion to expand its India operations. Along with backing Flipkart raised this spring from China's Tencent Holdings Ltd., eBay Inc. and Microsoft Corp. Flipkart's cash hoard will reach around $4 billion. The focus on India underscores the growing global battle for India's internet users. U.S. tech giants are squaring off against Japanese and Chinese firms, with all parties betting that even a modest slice of the growing Indian market is worth the fight. One forecast says online sales could reach $63.5 billion by 2021, but it will take improved in internet service and infrastructure along with investments in e-commerce to make that happen.

ECONOMY & TRADE

DryShips Inc. is making a slow turn in investment markets as the bulk carrier tries to get in position for increased commodities shipping demand. The carrier is ending the controversial stock issuance plan through Kalani Investments Ltd., Spencer Jakab writes in a WSJ Heard on the Street column, boosting shares in the Greek shipping firm that had lost nearly all of their value through months of reverse stock splits. Chief Executive George Economou, enriched through various offshore entities tied to DryShips while owning little of the stock, is investing $100 million in the company. DryShips still faces difficult sailing, with lawsuits and potential securities-law violations, but its business may enjoy some tailwinds in an improving commodities market. The Baltic Dry Index, bulk shipping's key pricing measure, reached its highest point last week in more than three months, with steel production in China and high demand for grain transport feeding a rebound.

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IN OTHER NEWS

President Trump is set to sign a directive today launching a trade probe into whether China has backed intellectual property theft. (WSJ)

U.S. consumer prices rose 0.1% from June to July and year-over-year growth slowed to 1.7%. (WSJ)

The pace of China's industrial output, retail and housing sales, and fixed-asset investment growth decelerated in July. (WSJ)

Japan's economy grew at a faster-than-expected annualized pace of 4% in the June quarter, (WSJ)

The eurozone's industrial output fell at its sharpest rate this year during June. (WSJ)

The world's largest economies cut their oil stockpiles in the second quarter but inventories remained above the five-year average. (WSJ)

Vehicle sales growth in China accelerated to 4.3% in July, allaying concerns about demand. (WSJ)

J.C. Penney Co. lost $62 million in the second quarter as same-store sales fell 1.3%. (WSJ)

Daniel Loeb's Third Point LLC exited its investment in messaging app Snap and returned to Chinese internet giant Alibaba Group Holding Ltd. (WSJ)

Tesla Inc. sold $1.8 billion of bonds at a 5.3% yield, expanding its earlier sales target under high demand for its debt offering. (WSJ)

Investigators say an Islamic State global financial network used fake eBay transactions to funnel money to an alleged operative in the U.S. (WSJ)

Loaded container imports into the ports of Los Angeles and Long Beach soared at a double-digit rate in July. (Los Angeles Business Journal)

Amazon is exploring technology developed for the U.S. military to produce, store and deliver prepared meals without refrigeration. (Reuters)

The U.S. Postal Service will likely default on up to $6.9 billion in payments for future retiree health benefits for the fifth straight year. (Associated Press)

A laboòr union says CSX Corp. laid off 60 workers at its Chicago switching yard, about half the site's workforce. ( Chicago Tribune)

South Korean container shipping line Hyundai Merchant Marine Co. lost $152 million in the second quarter. (American Shipper)

Toll Holdings Chairman John Mullen expects the troubled Japan Post-owned Australian transport business to be profitable this year. (The Australian)

Wabash National Corp. says its purchase of Supreme Industries will help the truck trailer maker meet changing logistics-industry demands. (Fleet Owner)

Commercial shipping traffic to and from Lake Superior was blocked after a freighter ran aground near the critical Soo Locks. (Duluth News Tribune)

Looters used small boats to raid containers that fell from a Brazilian Logistica Intermodal cargo ship near Sao Paulo. (The Telegraph)

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 14, 2017 06:54 ET (10:54 GMT)