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Home>Today's Top Supply Chain and Logistics News From WSJ

Today's Top Supply Chain and Logistics News From WSJ

Today's Top Supply Chain and Logistics News From WSJ

09/29/2017

 By Paul Page 

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Relief efforts in Puerto Rico are still moving at a crawl more than a week after Hurricane Maria devastated the island. The widespread damage to critical infrastructure is forcing aid groups, government agencies and companies to patch together improvised distribution channels, the WSJ's Jennifer Smith and Arian Campo-Flores report, as they try to catch up in the wake of criticism that the federal response has been sluggish. A decision to wave Jones Act restrictions on foreign vessels in the relief is aimed at speeding the movement of needed aid, but companies in Puerto Rico are saying their biggest challenge remains blocked roads and scarce fuel supplies that keep them from getting goods moved beyond San Juan's seaport. Some of that needed fuel is at the seaport as well, and federal aid workers have created a distribution system to transport a steady supply of diesel to hospitals for their generators. It's the kind of makeshift effort that relief groups and residents hope will repair stunted supply chain enough to bring in even greater relief.

The political furor over the Puerto Rico relief effort is focusing new attention on a pillar of U.S. maritime law. The Trump administration's move to lift Jones Act restrictions on foreign-flag vessels carrying cargo from the U.S. will help quell criticism over the relief efforts, the WSJ's Costas Paris reports, but logistics experts say the action won't do much to speed desperately needed supplies to the island's shattered interior. Shipping executives there say there is ample humanitarian aid reaching the island on U.S.-flagged ships and that many more containers of aid are coming in than are leaving the San Juan port terminal. Some maritime operators and companies that depend on U.S. domestic shipping are bristling at the move to temporarily waive the restrictions. But critics say disasters such as Hurricane Maria shine an important light on protections that they believe raises costs for consumers and leave the U.S. shipping business inefficient.

The "Amazon effect" is starting to far from the U.S. and that has investors worried. Amazon.com Inc.'s expanding ambitions are prompting investors to dump shares of retailers outside the U.S., the WSJ's Riva Gold and Saabira Chaudhuri report, signaling that sectors that had seemed sheltered from Amazon's impact now look more exposed. Analysts have long said that retailers in other markets don't face the same pressures because they don't have the same overhang from excess space that U.S. companies held after years of aggressive expansion and growing dependence by brands on selling through big chain department stores. But Amazon's international sales increased 16% in the first half of 2017, and the company is bulking up its fulfillment center network in Europe. Retailers in Europe are adjusting their online strategies, but with capital starting to follow the shoppers they could find their backing for new initiatives strained just when they need it most.

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Swedish apparel retailer H&M is among the high-profile store owners scrambling to adjust to retail's changing fashions. After consistently planning for faster growth than it has achieved, the WSJ's Stephen Wilmot writes in Heard on the Street, H&M is sitting on too much inventory and blueprints for new stores in some of the world's fastest-growing e-commerce markets. Chief Executive Karl-Johan Persson is talking about integrating physical and online sales, developing faster delivery and digitizing inventory management as it tries to catch up to fast-growing online players. But its inventory position at the end of August was no better than it was a year ago even as same-store sales look like they have fallen by about 5%. The company used to dominate the clothing industry's distribution machine, but that was in the glory days of bricks and mortar, and maintaining its strategy of aggressive store growth will prove expensive even a well-built multi-channel sales effort.

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