United Parcel Service : Today's Top Supply Chain and Logistics News From WSJ
By Paul Page
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The strong surge in online sales this season is starting to slow down delivery of the goods to homes. United Parcel Service Inc. says big seasonal volumes that are running ahead of expectations are backing up its U.S. distribution system, the WSJ's Paul Ziobro reports, pushing the country's biggest private carrier to warn customers of delays in delivery and to call on drivers to work extra hours. The delays show delivery operations critical to e-commerce are still struggling with the busiest shopping periods despite heavy investment to build out and automate operations. The carriers are facing a flood of goods: Adobe estimates that Cyber Monday sales rose 17% from last year, and that online sales this season will clear $100 billion. The U.S. Postal Service is responding by expanding delivery hours, and UPS has tried to get retailers to spread volume more evenly through the period. But with the company's holiday-season volume up more than 22% in just two years, the plans are being buried by the flood of boxes.
The rebound in truck manufacturing is running at high throttle. Fleet operators ordered 32,900 Class 8 trucks in November, a 70% boost over a year ago that ACT Research says gives truck makers their strongest two-month stretch for orders since the start of 2015. Trucking companies are adding capacity as strong economic growth fuels surging freight volume, WSJ Logistics Report's Erica E. Phillips writes, and bolsters shipping prices and carrier confidence heading into 2018. That's providing a boost for truck makers like Navistar International Corp. that were laying off workers in 2016 as orders fell to multi-year lows. Factories will be operating in high gear in the coming months, and ACT expects orders to remain high next year as operators replace trucks and add capacity. The only brake on the fleet owners' expansion plans, in fact, may be finding enough drivers to run the big rigs.
Ford Motor Co. is trying to restart its sales engine in China as it builds up its supply chain in the world's biggest car market. The auto manufacturer will launch 50 new vehicles in China by 2025, including 15 electric models, the WSJ's Trefor Moss writes, as it seeks to reverse this year's 14% slide in passenger-car sales. Ford plans to make automobiles that cater more to Chinese buyers, and to follow a shift in the country toward vehicles that are more autonomous, connected and electric. The company depends less on China than some auto makers, but its commitment is growing. It plans to start production at its first Lincoln plant in China in 2019, and plans to shift production of the Focus from the U.S. to China. Along with a new $103 million testing facility in Nanjing, the moves will give Ford a bigger stake in the network of suppliers that is growing in the expanding car market.
Jack Ma doesn't have any patience with complaints from foreign companies about doing business in China. The Alibaba Group Holding Ltd. founder told an internet forum that companies that struggle in China simply may not be taking the right approach, the WSJ's Liza Lin writes, a tough message that comes as retailers and e-commerce companies are looking to expand across borders. Alibaba itself is pushing plans to compete in the U.S. even as American online rival Amazon.com Inc. tries to scale up its own operations in Alibaba's back yard. Transport and logistics operators are among those that have struggled to build up business in China while meeting strict regulatory requirements. Mr. Ma says foreign companies shouldn't expect to succeed quickly or easily. "When you determine to come, prepare for it," he said. "Follow the rules and laws and spend 10 years."
IN OTHER NEWS
U.S. imports expanded 1.6% in October on rising consumer goods and oil trade while exports remained flat. (WSJ)
Canada's merchandise trade deficit narrowed sharply in October as exports surged 2.7% while imports fell. (WSJ)
A measure of U.S. service-sector activity slipped slightly last month but remained in strong growth territory. (WSJ)
China and Canada stopped short of announcing new trade talks during meetings between the countries' top leaders. (WSJ)
Listed companies are at their most profitable level on record after a bumper year of earnings growth. (WSJ)
Nissan Motor Co. says it will start testing robo-taxis on Japanese streets in March. (WSJ)
Japan Airlines Co. invested in a U.S. startup seeking to build a supersonic airliner capable of flying trans-Pacific routes in five hours. (WSJ)
Copper prices fell to two-month lows on reports of growing inventories. (WSJ)
Vietnam will eliminate tariffs on many auto parts starting in January. (Nikkei Asian Review)
Amazon had a quiet start to the launch of its online marketplace in Australia. (New York Times)
Fitch Ratings says the outlook for the shipping industry remains negative for next year due to lingering overcapacity in most sectors. (Lloyd's List)
Employers at U.S. East and Gulf Coast ports and unionized dockworkers began negotiations aimed at long-term contract extension. (Journal of Commerce)
CMA CGM SA signed a 10-year pact with Total SA to provide liquefied natural gas to fuel its ships. (Splash 14/7)
The main airline trade group forecasts industry profits will grow 11% next year to $38.4 million. (STAT Times)
U.S. transport regulators withdrew a proposed rule requiring special brakes on freight trains carrying hazardous commodities. (Railway Age)
An administrative law judge rules New Jersey-based Intermodal Bridge Transport wrongly classified its port truck drivers as independent contractors. (American Shipper)
Daimler Trucks North America will start delivering parts built using 3D printing technology. (Commercial Carrier Journal)
Lineage Logistics LLC acquired eight refrigerated facilities in Southern California from U.S. Growers Cold Storage Inc. (Modern Materials Handling)
Airlines in Germany have canceled more than 200 flights this year because flight crews refused to take part in deportations of asylum seekers to Afghanistan. (The Independent)
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 protected]