Today's Top Supply Chain and Logistics News From WSJ

By Paul Page Features Dow Jones Newswires

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Amazon.com Inc. knows where you live and wants to move in. The e-commerce giant has won commitments to install delivery-locker systems in thousands of properties across the U.S., many of them before this year's peak holiday shopping season. The WSJ's Laura Kusisto writes that several of the nation's largest apartment operators have signed on so far to a plan that could help Amazon consolidate its control over how goods make it from distribution centers to the front door. It would help apartment managers cope with a major problem: the surging pile of boxes that flood lobbies as online sales grow. If it works, the program called Amazon Hub would shift how apartment operators deal with packages, and give Amazon an alternative to bringing goods straight to doors or to remote locations for pickup. It also would give Amazon the cost benefits that parcel carriers strive for by delivering big loads of packages to a single destination

CSX Corp. says it's just a matter of time before it wins backs frustrated industrial shippers. Chief Executive Hunter Harrison issued the upbeat assessment as the freight railroad hit profit projections for the third quarter, the WSJ's Paul Ziobro, despite a slim 1% gain in revenue that showed erratic service was taking a toll on its business. An increase in pricing helped railroad boost earnings slightly to $459 million even as volumes in key commodities such as chemicals, automotive and agriculture fell. Some of those carload declines are likely the result of service problems that sent some customers rushing to trucks and, where possible, competing rail to keep orders flowing and factories running. That hasn't thrown Mr. Harrison off his push toward "precision railroading," and the steady profitability will also help keep the plan on track. Once service is restored, he says, customers will come back "immediately."

The U.S., Canada and Mexico won't finish updating the North American Free Trade Agreement this year and the countries suggest there are big hurdles in getting an agreement next year. Officials pointed to "significant conceptual gaps" in ending a round of meetings that the WSJ's Jacob M. Schlesinger and William Mauldin report has stoked a growing fear among Nafta supporters that the discussions may prove futile, and the end result could be the death of the 23-year-old pact. The countries pushed off the next talks into November, and officials pointed to progress in less controversial areas such as customs, trade facilitation and digital trade. But Mexican and Canadian officials say items such as U.S. demands for "national content" in automobiles are have created steep divisions. Canada's foreign minister says the provision "would severely disrupt" supply chains for cars and auto parts and likely would violate global trade rules.

SUPPLY CHAIN STRATEGIES

A battle over leverage is building up in pharmaceutical supply chains. Impax Laboratories Inc. and Amneal Pharmaceuticals LLC agreed to merge in a deal that that would create the nation's fifth-largest generic-drug company by revenue, the WSJ's Jonathan D. Rockoff and Dana Cimilluca report, putting the combined business in a better position to tackle changing distribution channels for generic drugs. The merger comes as wholesalers and retailers are teaming up to become increasingly powerful forces in moving generics in the $84 billion market. Those operators have formed three "buying groups" that are so large they have been able to squeeze generic-drug makers in negotiations. That's led to falling prices for generic drugs and cut out some smaller manufacturers. The new Amneal Pharmaceuticals will consolidate some production and cut costs, but the bigger gain may be the extra bulk to negotiate with the growing behemoths that distribute and sell the lower-priced copies.

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Wal-Mart Stores Inc. says its direct competition with Amazon is only just starting. The retailer's U.S. e-commerce chief Marc Lore says the company is looking at ways to expand "in every sector" after an acquisition spree brought in a string of trendy e-commerce startups, the WSJ's Laura Stevens reports, suggesting the buying binge is not over. Wal-Mart trails rival Amazon in online market share, but Mr. Lore told The Wall Street Journal's WSJ D.Live technology conference that a network of thousands of stores that can serve as hubs for online orders and distribution give the retailer a "second-mover advantage." Wal-Mart is shifting its focus from adding new physical stores to scaling up digital business, and it's projecting that e-commerce sales will grow 40% in its next fiscal year. The company is building up its distribution capability while locked in a battle with Amazon over minimum prices for discounted delivery.

QUOTABLE

IN OTHER NEWS

U.S. industrial production rose 0.3% in September while factory output expanded just 0.1%. (WSJ)

New Jersey is offering Amazon $7 billion in tax incentives to place its second headquarters in Newark. (WSJ)

The Trump administration reversed efforts to make it easier for farmers to challenge meatpackers over pricing and allegations of uncompetitive practices. (WSJ)

Volvo Cars unveiled its first high-performance electric car in Shanghai, in a direct challenge to Tesla Inc. (WSJ)

The Haynesville Shale, a giant natural-gas field in northwest Louisiana, is roaring back to life after a lull while drillers looked to Texas. (WSJ)

The U.K. government is moving to extend its powers to block foreign acquisitions of British companies that threaten national security. (WSJ)

Peter Bellew became the third chief executive to quit Malaysia Airlines Bhd since 2014. (WSJ)

Harley-Davidson Inc. cut its forecast for world-wide motorcycle shipments by 6% to 8% after seeing revenue slide 10% in the third quarter. (WSJ)

Technology-focused trucking startup Convoy struck a deal to handle more shipments for Anheuser-Busch. (Forbes)

Industrial parts distributor W.W. Grainger closed 40 branches in Canada in the third quarter. (Industrial Distribution)

Container imports at South Carolina's Port of Charleston rose 6.9% year-over-year in September. (Charleston Post and Courier)

Shipping line Hapag-Lloyd raised $414 million from the sale of 11.7 million new shares. (Journal of Commerce)

Exports out of Hong Kong International Airport soared 14% year-over-year in September. (Air Cargo News)

India's Mahindra Logistics won a regulator's approve to launch an initial public offering. (Economic Times)

Japanese carrier K-Line and Chilean logistics operator Agunsa formed an automotive logistics company, KAR Logistics. (Automotive Logistics)

South Korean police are seeking an arrest warrant for Hanjin Group Chairman Cho Yang Ho following a probe into use of company funds for construction work at his house. (Reuters)

Gabon's Port of Owendo opened a $300 million container and multi-use cargo terminal. (Port Technology)

China's COSCO (Dalian) Shipyard delivered its first deep-sea underwater vessel to Maersk Supply Service. (Xinhua)

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

October 18, 2017 05:41 ET (09:41 GMT)