Today's Top Logistics & Supply Chain News

Today's Top Supply Chain and Logistics News From WSJ

By Paul Page

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The U.S. ports that normally brace for a surge in imports heading into the fall are seeing something different this year: a change in supply chain strategies. Inbound business has been flat at major seaports heading into the peak shipping season, the stretch when retailers load up on goods for the upcoming holidays. If the trend holds, WSJ Logistics Report’s Erica E. Phillips and Robbie Whelan write, it will be the second straight year without a traditional peak. Economists say the subdued shipping suggest retailers are slimming supply chains as customers move online. Companies such as Target Corp., Lowe’s Cos. and J.C. Penney Inc. are pivoting away from maintaining stores brimming with merchandise, instead housing fewer goods in warehouses where they can quickly ship to stores or fulfill online orders. The shift has come as ports have spent billions of dollars to improve their ability to handle more goods coming on bigger ships. This year, however, ocean lines have been scrapping vessels and cutting back service, an effort aimed at propping up shipping prices the carriers watch the horizon for improving demand.

Florida’s orange juice business is in a big squeeze. Waning consumer demand for orange juice concentrate, once a thriving business in the state, and rampant disease have producers abandoning groves, the WSJ’s Julie Wernau reports. Florida’s orange crop is on track for the smallest harvest in 52 years, and futures contracts have been sliding as confidence in the business withers. That’s tough on transportation operators since the state has notoriously light production of goods trucking companies need to pay for northbound return trips. The groves are being buffeted by big trends: Americans are drinking far less orange juice than ever, and they aren’t drinking it from the concentrate that has long been Florida’s specialty. Forecasters this year expect production to fall 26% from this year to next year as citrus acreage is abandoned. Some of the business is shifting to imports from Brazil, but even that country is producing about half the orange juice it did 10 years ago.

The grab for airspace by commercial drone operators in the U.S. can begin. The new Federal Aviation Administration nationwide rules are taking effect this week as regulators note their next big challenge will be evaluating industry waiver requests in order to balance innovation and safety, the WSJ’s Andy Pasztor reports. Those waivers will play a big role in shaping how the FAA regulates the budding industry, a departure from most air-safety initiatives that may have a big impact on how delivery companies test and potentially use drones for their own operations. Several companies are looking for ways to use unmanned vehicles in the package business. The FAA rules, which include tight limits on weight and distance, don’t leave much room for parcel delivery in routine operations, But companies should have plenty of leeway to test the drones under regulatory waivers, giving them time to see whether they can work dependably and, more important, economically.

Skyrocketing Aerospace Growth and Complex Supply Chains

Planemakers are rapidly increasing production, placing new demands on aerospace exporters to manage complex supply chains.

TRANSPORTATION

The Port of Los Angeles. Patrick T. Fallon for The Wall Street Journal

New work is underway to help ocean-borne commerce and whales exist side by side on the Atlantic Coast. The “ocean action plan” will use acoustic equipment positioned in the busy waters near New York City to monitor the position of whales in the area as well as an acoustic drone that will glide across the ocean’s surface and transmit the information to nearby ships. It’s an important step for preserving the right whale, which migrates through waters near the Port of New York and New Jersey, the WSJ’s Hannah Furfaro reports. Critical to the plan is the participation of the shipping industry-led North American Marine Environment Protection Association. Ship operators now face a bar against traveling over 10 knots, about 11.5 miles an hour, near several major ports during the whale’s migration season. Providing the right location information could help container ships and the whales more easily share those waters, and allow vessels to move more quickly when the coast is clear.

QUOTABLE

The running joke going around is that flat is the new growth.

Jett McCandless, chief executive of project44.

Number of the Day

2.2%

Projected growth this year over 2015 in imports at major U.S. ports, according to Hackett Associates LLC.

IN OTHER NEWS

South Korea’s Hanjin Shipping Co. moved closer to bankruptcy as creditors said they would no longer financially support the container shipping line. (WSJ)

A truck hauling Takata Corp. air bag propellants exploded into flames after crashing on a Texas highway, killing a woman in a nearby home and injuring four others. (WSJ)

U.S. consumer spending rose 0.3% in July, the fourth straight monthly increase. (WSJ)

The dollar reached a three-week high on world markets amid signs that traders believe the U.S. currency is on track to strengthen even more. (WSJ)

The U.S. is on track to post the longest stretch of falling food prices in more than 50 years, putting a financial strain on farmers, grocery stores and restaurants. (WSJ)

Indian online payment and e-commerce firm Paytm is raising $300 million in a new funding round that doubles the earlier valuation of the business to $5 billion. (WSJ)

Walgreens Boots Alliance Inc. struck a partnership with Prime Therapeutics to cooperate on their specialty prescription drug and mail-service businesses. (WSJ)

Chinese aluminum extrusions company Zhongwang USA LLC acquired Ohio-based aluminum producer Aleris Corp. $1.1 billion in cash. (WSJ)

The American Trucking Associations says a court ruling limiting the use of New York state toll revenues may apply to other states that use highway revenues “like a piggy bank.” (Pittsburgh Post-Gazette)

Seventeen workers were killed in a warehouse fire in northern Moscow. (New York Times)

A Berkeley Research Group survey of U.S. consumers suggests a tepid outlook for holiday sales this year. (Sourcing Journal)

Constellation Brands Inc. will build a 450,000-square-foot distribution center outside Dallas for its beer and wine shipping. (Dallas Morning News)

Covenant Transportation Inc. says e-commerce shipments represent about a third of the truckload carrier’s business and is growing at a rapid pace. (Transport Topics)

The South Carolina Ports Authority ordered 12 large gantry cranes from Konecranes capable of handling bigger container ships. (Monitor Daily)

Retailer GameStop Corp. says using physical stores to fulfill online orders has boosted sales by increasing inventory available on the web. (Internet Retailer)

Broadcast retailer QVC opened its first West Coast distribution center in Southern California. (Inland Valley Daily Bulletin)

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