Today's Top Logistics & Supply Chain News

Today's Top Supply Chain and Logistics News From WSJ

By Paul Page

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Hanjin Shipping Co.’s decision to enter South Korea’s version of bankruptcy protection is roiling global supply chains and raising questions about whether the container shipping line can survive much longer on its own. The filing for receivership sent freight brokers and shippers scrambling to find space elsewhere, the WSJ’s Costas Paris and Erica E. Phillips report, as Hanjin was immobilized in the midst of the busiest season for exports out of Asia. Several ports blocked access to Hanjin ships because of concerns they wouldn’t be able to pay fees, and at least one Hanjin ship was detained while others waited offshore near seaports. Several shippers and freight brokers were reporting sharp increases in long-depressed shipping rates soon after Hanjin’s filing, and importers and exporters in Asia-based trade lanes are bracing for even bigger price increases if the carrier’s capacity stays on the sidelines. For companies with goods on Hanjin’s ships, the concerns are more immediate as they try to get shipments to shore at a critical point in the peak shipping season.

The turmoil from the Hanjin Shipping receivership is buffeting the cargo operations at U.S. West Coast ports especially hard. Container terminals from Seattle to Long Beach, Calif., were turning away outbound shipments headed to Hanjin ships, WSJ Logistics Report’s Erica E. Phillips writes, and truckers and other companies that work with the South Korean shipping line were facing higher costs and the prospect of canceled payments. The response has triggered logistical turmoil, as shippers and forwarders re-book cargo and then redirect boxes to new destinations. Inbound shipments are still blanketed in uncertainty. Three Hanjin ships due at the ports of Los Angeles and Long Beach this week were anchored instead off the coast, with their contents apparently marooned until court actions far from the docks determine the direction of Hanjin’s business.

The top U.S. maritime regulator wants assurances that an expansive new global shipping alliance won’t drive up costs for shippers. The Federal Maritime Commission is holding up a decision on the Ocean Alliance—the big prospective operating agreement that includes CMA CGM SA and China’s Cosco Group—until it gets more answers from a group that would own 39% of the container shipping capacity between Asia and North America. William Doyle, a Federal Maritime Commission member, tells the WSJ’s Costas Paris that the scale of the alliance raises important questions about the outsize control the operators may have over pricing with shipping customers and other wings of the maritime business. That’s becoming a more significant concern across the shipping industry as global alliances crowd out independent operations. The results of an FMC exchange with the carriers could set the template for how other regulatory bodies review this alliance and the others that are forming in the shipping world.

From ‘Nice to Have’ to Business Critical

Small businesses are discovering that making sustainability a cost-effective priority is within their reach.

TRANSPORTATION

Associated Press

C.H. Robinson Worldwide Inc. is bulking up its international freight forwarding business. The company, the largest broker of domestic trucking services in the U.S., says it will buy Australia and New Zealand freight forwarder APC Logistics, WSJ Logistics Report’s Loretta Chao writes, and remains on the lookout for acquisitions that expand the company’s global reach. APC has a roughly 10% share of the Australia freight market, which is largely focused on inbound business for higher-value container volumes. But the real attraction for C.H. Robinson may be the company’s reach into supply chains stretching to Asia and Europe. The company counts about 15% of its revenue from international air, ocean and customs business, and global markets may provide C.H. Robinson its greatest potential for growth since it already holds a big share of U.S. domestic shipping business.

QUOTABLE

It’s crazy today, pricing is pretty bad.

Nina Luu, a California-based importer of household goods, on shipping choices in the wake of Hanjin Shipping’s filing for receivership.

Number of the Day

39%

Share of container shipping capacity on Asia-North America lanes held by members of the planned Ocean Alliance.

IN OTHER NEWS

An index of U.S. pending home sales rose 1.3% in July, nearing its highest level of the year. (WSJ)

The Justice Department filed a lawsuit challenging Deere & Co.’s planned acquisition of a high-tech farming equipment line from Monsanto Co. (WSJ)

Landlords, liquidators and a licensing firm are teaming up in a joint bid to save some 229 Aéropostale retail stores, offering $243.3 million at a bankruptcy auction. (WSJ)

A JetBlue Airways Corp. flight became the first commercial scheduled flight from the U.S. to Cuba in five decades. (USA Today)

DHL Supply Chain will test “smart glasses” for workers at its United Kingdom distribution centers. (Logistics Manager)

Gap. Inc. is facing disruptions to its North American supply chain after a massive fire shut down its regional distribution center in New York state. (MarketWatch)

FedEx Ground will build a 1-million-square-foot sorting facility in Murfreesboro, Tenn. (Memphis Commercial Appeal)

United Parcel Service Inc. unionized pilots ratified a five-year contract with the parcel carrier. (American Shipper)

The transported value of U.S. trade with Canada and Mexico declined 6.4% in June, the 18th straight monthly decline. (Logistics Management)

Kenya plans to build a second container terminal at the Port of Mombasa. (Port Technology)

Singapore Post and Luxembourg Post agreed to serve as hubs for each other’s e-commerce shipments between Europe and Asia. (Business Times)

Industry experts expect China’s soybean imports will rebound in the fourth quarter after falling 13% year-over-year this summer. (AgWeb)

U.S. highway fatalities involving trucks increased 4.4% in 2015. (Commercial Carrier Journal)

Online sales in France expanded 16% last year and accounted for 7% of overall retail sales. (Internet Retailer)

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