By Paul Page
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Wal-Mart Stores Inc. is stepping up its battle with Amazon.com
Inc., with shipping at the center of the competition. Wal-Mart is
expanding its free two-day shipping program to any U.S. customer
and seeking to list far more items on its website, a direct
challenge to Amazon and its popular Prime program, the WSJ's Sarah
Nassauer and Loretta Chao report. The move shows Wal-Mart believes
the steps it has taken to improve its fulfillment capabilities have
put the company in better position to compete head-on for the
growing slice of retail sales that take place online. Wal-Mart,
which has been struggling with sluggish U.S. sales growth, has made
bolstering its ecommerce operation a top priority and is investing
$2 billion in the business. Wal-Mart may gain customers with its
plan, but serving them profitably may be another matter. The rapid
home delivery consumers want is costly to execute, and retailers
have seen margins wither as they try to position goods for both
online sales and store fulfillment.
Amazon's effort to control its own supply chain runs in two
directions. While Amazon is building a network to handle its
logistics, the e-commerce giant is rolling out private-label
packaged foods aimed at taking more of the perishables retail
market, the WSJ's Greg Bensinger reports. The launch into the
business is starting quietly with coffee and baby food, allowing
Amazon to test new products that generally come with high profit
margins. Such in-house brands can be lucrative for manufacturers
and retailers because of lower development and marketing costs. And
they allow Amazon to design packaging to reduce shipping costs.
Amazon certainly seems to want the private-label goods embedded in
its logistics business: the labor for its new Happy Belly coffee
says it's part of AFS Brands Inc. -- AFS, for Amazon Fulfillment
Services.
DB Schenker is trying to close the digital divide in its freight
business. The Germany-based business, one of the world's largest
freight forwarders, is hiring Texas-based uShip Inc. to connect
shippers with trucking companies online, WSJ Logistics Report's
Erica E. Phillips writes. The deal is a seemingly unlikely tie-up
between a global freight specialist and a 13-year-old Texas-based
niche operator that links small shippers to carriers. But a growing
field of tech startups is challenging freight haulers, and the big
traditional logistics operators that depend on industrial business
generally have lagged behind those smaller and more nimble
companies. Industry experts expect to see more such agreements, as
changing demands in the shipping market push big players to make
their businesses more digitally savvy.
TRANSPORTATION
Canadian Pacific Railway Ltd. will get smaller in line with what
the freight railroad says is shrinking shipping demand. CP will lay
off 500 maintenance workers starting today as the carrier braces
for a sharp slide in revenue in the second quarter, saying that
even once-strong grain shipments aren't providing the help the
carrier needs. Martin Cej, an executive at the railroad, tells
WSJ's Jade Markus, "The economic growth in North America right now
is slow." CP has already projected a 12% decline in revenue this
quarter, and events such as the Alberta wildfires have added to the
general demand downturn hitting all railroads. The Association of
American Railroads says overall North American carload and
intermodal volume is off 7.5% so far this year and is off 7.7% for
the Canadian railroads.
Companies in Britain are trying to keep a stiff upper lip while
pleading for the U.K. to keep access to the European single market.
The push by businesses ranging from auto manufacturers to candy
maker Mars Inc. is part of the growing corporate effort ito
minimize the impact of the U.K. vote last week to exit the European
Union. Access to the single market is a high priority, but the
WSJ's Robert Wall and Saabira Chaudhuri write that how Britain can
keep that access is unclear. U.K. auto makers are relatively
sanguine over the short-term impact of the "Brexit," but many say
the long-term impact depends on what trade deals are struck.
Meanwhile, shipping analysts Alphaliner sees "little direct impact"
on container shipping. "The county's decline as a maritime center
for the container shipping sector had started long before the
'Brexit' decision, " Alphaliner said in a report.
QUOTABLE
IN OTHER NEWS
Istanbul's main airport resumed business after a terror attack
at a passenger terminal killed 41 people and injured dozens.
(WSJ)
Exxon Mobil Corp. is lobbying rivals to support a carbon tax.
(WSJ)
Two railroad employees were killed and another was presumed dead
following the fiery collision of two BNSF Railway trains in
Texas.
The Port Authority of New York and New Jersey will provide
scales to help shippers comply with a new container-weighing rule.
(WSJ)
General Motors Co.'s U.S. market share is shrinking partly
because the auto maker can't keep up with demand for pickup trucks
and sport-utility vehicles. (WSJ)
Alcoa Inc. detailed its plans to split its commodities and its
equipment businesses in two. (WSJ)
Agricultural equipment maker Agco Corp. will buy Cimbria
Holdings Ltd. in a move to boost its seed and grain processing
business. (WSJ)
The flight attendants' union at United Continental Holdings Inc.
agreed to send a proposed contract to a membership vote. (WSJ)
Hyundai Merchant Marine Co. Ltd.'s creditor-led restructuring
will be extended by one month as its bid to join a global shipping
alliance takes shape. (Yonhap)
Russia President Vladimir Putin extended the country's ban on
imports of Western food until the end of 2017. (Daily Mail)
Supply-chain software company E2open Inc. acquired Orchestro, a
retail data analytics provider. (Modern Materials Handling)
Pfizer Inc. will invest $350 million in a biotech hub in China.
(Reuters)
German manufacturers are ahead of U.S. companies in implementing
"Internet of Things" technology. (manufacturing.net)
Shareholders in e-commerce investment giant Rocket Internet are
frustrated with the financial returns from several online delivery
startups. (Fortune)
http://fortune.com/2016/06/29/rocket-internet-growth-slows/
Specialized online clothing retailer Trunk Club will close its
Chicago-area distribution center and work through parent Nordstrom
Inc.'s fulfillment. ( Chicago Tribune)
Startup luxury fashion producers want to bypass stores and sell
goods directly to consumers. (Fast Company)
Residents in Palmer Township, Pa., in eastern Pennsylvania are
fighting a Werner Enterprises Inc. plan to build a truck terminal
and rest stop. (WFMZ)
Indian craft beer startup Bira91 hopes $10 million in new
funding will solve supply-chain gaps that left the business nearly
without brews. (Quartz)
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.
Subscribe to this email newsletter by clicking here:
http://on.wsj.com/Logisticsnewsletter .
(END) Dow Jones Newswires
June 30, 2016 06:49 ET (10:49 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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