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The shipping world's restructuring wave is washing over maritime finance. Three U.S. private-equity firms have submitted bids to take over troubled German lender HSH Nordbank, the WSJ's Costas Paris reports, extending restructuring in a banking sector still weighed down by the heavy debt load left from the downturn in global shipping. The Royal Bank of Scotland struck agreements earlier this year to sell some $600 million in shipping loans as it moved away from the sector. Now, state-owned HSH is rushing to find a buyer after suffering massive losses on shipping debt. Looking to buy in are Apollo Capital Management LLC, Cerberus Capital Management LP and J.C. Flowers & Co. The crunch in the financial arena doesn't appear to be slowing carrier efforts to add capacity: Cosco Shipping Holdings plans to raise $1.9 billion through a share offering in Shanghai, with the money intended to back the purchase of 20 container ships Cosco has already ordered.
Apple Inc. is redesigning its foundation electronic devices to jettison a key supplier. The new iPhones and iPads would replace components made by Qualcomm Inc., the chip maker locked in a legal fight with Apple, the WSJ's Dana Mattioli and Tripp Mickle report, redrawing the company's supply chain for critical components that handle communications between wireless devices and cellular networks. Apple would turn to modem chips from Intel Corp. and possibly from MediaTek Inc., moving away from the world's biggest supplier of such chips. Qualcomm has supplied Apple for a decade. But the companies have been battling over Apple's claim that Qualcomm is unfairly blocking competitors and charging exorbitant patent royalties. Apple's plans aren't yet set, but the new designs suggest the dispute could spill beyond the courtroom and into the smartphone supply chain and reset a market Qualcomm now dominates with a 50% share.
The commodities world is gearing up for electric cars. The London Metal Exchange plans to launch futures contracts for battery metals as soon as early 2019, the WSJ's David Hodari reports, a new sign that the race to build a new generation of automobiles is restructuring supply chains from factories to the sourcing of raw materials. The LME will work with battery producers and car makers on contracts for minerals such as cobalt and lithium that are used in batteries that power electric vehicles. Manufacturers are trying to manage risk in the mining of cobalt in particular. The commodity is found in the Democratic Republic of Congo, and analysts including Macquarie say the automobile industry could face "sustained and widening shortages" of cobalt as soon as 2020. There are similar forecasts for lithium, and analysts say manufacturers will have to produce batteries that are more efficient, and use less of the minerals, to back projections for electric-vehicle growth.
SUPPLY CHAIN STRATEGIES
Automation in manufacturing may soon change the direction and speed of apparel supply chains. Sportswear supplier Nike Inc. is talking about moving more of its manufacturing to the Americas, advancing a near-shoring strategy that marks a reversal of sorts of the move to Asia that made the company a mainstay of globalization. The plan, reported in Quartz, is to work with outsourced manufacturing specialist Flex to bring production closer to Nike's big North American market, reining back the company's long supply chains to get goods to consumers faster. Nike is hoping to save on labor costs by using more robotics on assembly lines, expanding a strategy its used at Asia factories. Such automation is growing more common as apparel companies look to cut costs. The longer-term benefit may be that they'll be able change production more quickly to match shifting consumer tastes.
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The shop-and-ship holiday season hasn't even started but the competition is already on to handle the returns. United Parcel Service Inc. is rolling out an online returns service for small and medium-size e-commerce businesses, the WSJ's Sara Castellanos writes, adding to the growing focus on an area widely seen as a barrier to profitable online sales expansion. Retail analysts say nearly a third of online purchases are returned, triple the rate of returns for in-store sales. Many brick-and-mortar stores have focused more on getting holiday shoppers to return online purchases to stores to help trigger more in-store sales and reduce the high costs of dealing with returns. And department store Kohl's Corp. struck a deal with Amazon.com Inc. this year to allow buyers to bring Amazon purchases back to Kohl's sites. It's a variation on the multi-channel strategy that store operators say can simplify returns.
IN OTHER NEWS
U.S. consumer spending rose in September at the fastest month-to-month pace in eight years. (WSJ)
Crude oil prices are at their highest level in eight months. (WSJ)
China's factory activity slowed in October, suggesting the country's economy is cooling. (WSJ)
Nintendo Co. sharply raised its sales forecast for the Switch game machine. (WSJ)
Three low-cost passenger airlines are launching operations in Canada. (WSJ)
Staples Inc. plans to sell its operations in China as it focuses on its business closer to home. (WSJ)
Employment at the Port of New York and New Jersey grew 20% from 2014 to 2016. (Newark Star-Ledger)
The United Nations Conference on Trade and Development says recent shipping-industry consolidation may threaten competition. (Lloyd's Loading List)
Amazon is slashing the fees it charges grocery sellers on its marketplace. (Recode)
Best Buy Co. is using logistics operator Geodis to expand same-day delivery to 15 more U.S. cities this fall. (Minneapolis Star-Tribune)
TransRisk struck deals with Nodal Exchange LLC and DAT Solutions LLC for its plan to offer trading in trucking spot-price futures. (DC Velocity)
A federal appeals court halted implementation of a portion of an Obama administration regulation setting emissions-reduction standards for truck trailers. (The Hill)
The U.S. will start collecting anti-dumping duties on aluminum foil imports from China. (American Shipper)
Bulk shipping's Baltic Dry Index retreated to start this week after reaching a three-year high last week. (Seatrade Maritime)
India's second-tier ports are taking a growing share of the country's trade as companies look to get away from crowded gateways. (Business Standard)
Some countries fear a potential European ban on the weedkiller glyphosate could hurt their agriculture exports. (Politico)
Warehouse employment in West Virginia nearly tripled from 2007 to 2016. (West Virginia Gazette)
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 email@example.com
(END) Dow Jones Newswires
October 31, 2017 06:48 ET (10:48 GMT)