Today's Top Logistics & Supply Chain News

Today's Top Supply Chain and Logistics News From WSJ

By Paul Page

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There’s some financial turbulence in the high-flying world of digital freight booking startups. Cargomatic Inc., which arranges fright transportation near big U.S. ports, has shaken up its C-suite over the last two months, WSJ Logistics Report’s Robbie Whelan reports, amid signs of financial trouble at the business. The company’s chief financial officer and chief operating officer have left, and there are reports that the company’s cash position has dwindled to the point where it can only cover two months of operating costs. It’s a step back for the logistics industry’s ambitious clutch of new tech-driving operators, including makers of apps that match truckers with cargo loads. At least 27 young companies in the field have raise $180 million in venture capital backing since 2011. Cargomatic’s main investor, Canaan Partners, is pledging to infuse the company with cash, and it new chairman wants to bring in staff with more expertise in the transportation industry.

Best Buy Co. is showing surprising strength as an e-commerce player. The electronics retailer, which has long been concerned with weak sales at its big-box storefronts, saw online sales soar 24% in the second quarter and other measures of digital business also improve sharply. The gains online mark an important step in transforming a business that has faced stiff competition from Amazon.com Inc. and big questions over its roomy stores and the inventory it stocks to fill the sites. The WSJ’s Paul Ziobro reports that Best Buy has improved its digital presence and fine-tuned a free-shipping offer, tactics that have helped boost the average size of online orders. The company has already improved its delivery service, narrowing the window for installation of complicated products. That has fed strong growth in appliance sales—the big-ticket items Best Buy and others would like most to clear from their store inventories and push to online sales.

U.S. companies are stepping up raises to more of the nation’s lowest-paid workers, an action that could echo across hiring in transportation. The gains look to be driven by more competition for workers, minimum-wage increases and initiatives by big-name companies to trumpet the higher pay as a recruiting tool. The raises coincide with a decline in available workers for what are often less desirable jobs, the WSJ’s Eric Morath and Julie Jargon report, something the trucking industry has already coped with in the past two years as many companies boosted pay to get and keep drivers behind the wheel. The renewed growth in national wages could boost driver pay again even as carriers face slack shipping demand. That’s because the number of available workers per job opening is hovering near a 15-year low, leaving more trucking companies to compete more often for workers with service-industry businesses that are dangling more dollars.

Reaching Out to Global Markets

To take your business global, finding the right partners is as important as finding the right market

SUPPLY CHAIN STRATEGIES

Michal Czerwonka for The Wall Street Journal

India’s textile supply chain is coming under harsh scrutiny. Wal-Mart Stores Inc. now says it is reviewing supplies from Welspun India Ltd., following an earlier decision by Target Corp. to drop one of India’s biggest textile makers after concluding the company delivered phony goods. The WSJ’s Preetika Rana reports the actions by two of the world’s biggest retailers have hit Welspun hard, sending shares of the company tumbling 20% on two straight days before trading in the stock was halted. Welspun says it hired an outside firm to review its supply chain in light of Target’s allegations. For the company’s customers, the developments underscore the challenges retailers face in monitoring a global supply chain that often are built on a vast network of far-flung suppliers in developing countries. Welspun is highly exposed to its customers’ decisions since it counts two-thirds of its business from American companies.

QUOTABLE

There’s a perception in Silicon Valley that you can just start with a blank piece of paper and you don’t need to know the rules. That might work in some industries, but not in freight transportation.

Richard Gerstein, Cargomatic chairman.

Number of the Day

3.1%

Increase in average weekly wages for workers in the lowest 25th percentile of earners in the second quarter.

IN OTHER NEWS

U.S. new home sales jumped to their highest level since 2007 in July. (WSJ)

Iran signaled it may start cooperating with other global oil exporters on production. (WSJ)

British manufacturing firms saw a sharp boost in export orders in the aftermath of the U.K.’s decision to leave the European Union, an industry survey shows. (WSJ)

Tesla Motors Inc. says it will sell a battery capable of taking an electric car 315 miles on a charge, the longest range yet for its vehicles. (WSJ)

U.S. traffic fatalities rose 9% in the first six months of 2016, as an improving economy drove an increase in travel. (WSJ)

Home builder Toll Brothers Inc. reported strong second-quarter gains in profit and revenue on improving housing demand. (WSJ)

U.S. lawmakers plan to hold a hearing on the wave of mergers that could reshape the $100 billion global market for seeds and pesticides. (WSJ)

U.S. agricultural officials agreed to purchase $20 million worth of cheese products from dairy farmers weathering a glut of supply. (WSJ)

Container shipping traffic world-wide grew just 2.6% in the first half of 2016, according to Drewry. (Lloyd’s Loading List)

McKinsey consultants says South Korea’s big three shipyards should cut their production capacity in half by 2020. (Splash 24/7)

Container volumes rose at China’s largest ports rose in July from a year ago, partially reversing recent declines. (Journal of Commerce)

A federal appeals court rejected an appeal by Ozburn-Hessey Logistics of a ruling that it broke labor laws in dealing with a union organizing campaign at Memphis, Tenn., distribution centers. (Memphis Commercial Appeal)

An index tracking for-hire truck freight volumes fell 2.1% from June to July, the fourth sequential decline in five months. (Commercial Carrier Digital)

Technology startup Premonition says it is gaining traction with a platform optimizing the use of delivery vehicles in Australia as online sales put couriers under greater pressure. (The Guardian)

The Pasha Group began importing cars through a refurbished pier at the Port of San Francisco. (KGO-TV)

Exports of finished automobiles from Brazil soared 25% in July as car makers sought to offset slumping domestic demand with sales abroad. (Automotive Logistics)

Kinder Morgan Inc. settled a lawsuit by a ship agency that claimed it was blacklisted from working at the energy company’s marine terminals. (Virginian-Pilot)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @lorettachao, @RWhelanWSJ and @EEPhillips_WSJ, and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

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Write to Paul Page at paul.page@wsj.com