Today's Top Supply Chain and Logistics News From WSJ
By Paul Page
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Nearly 6,000 shipping containers with relief supplies have landed in San Juan but getting the critically needed materials beyond the port is proving a major challenge. Authorities in Puerto Rico say crumbled and blocked roads, damaged facilities and fuel shortages are slowing the distribution of water, food and temporary shelter in the wake of the devastating blow that Hurricane Maria delivered to the island. The WSJ reports that Crowley Maritime Inc. and TOTE Maritime both have moved barges and cargo ships through a port as the U.S. Coast Guard works to restore navigation aids in the shipping channel and officials repair computer systems needed to manage the goods. The head of Crowley's operations there says many roads around the capital are damaged or flooded, and that many paths to towns beyond San Juan are impassable. The disaster prompted calls for the Trump administration to waive Jones Act restrictions against foreign-flagged shipping services, but those curbs remain in place.
General Electric Co.'s efforts to take its locomotive production local may be running off the rails. GE is in danger of losing a $2.5 billion deal to sell diesel locomotives to Indian Railways, one of its company's largest industrial contracts ever and a linchpin of GE's hopes to win business in far-flung markets by investing heavily in local operations. The WSJ's Thomas Gryta, Ted Mann and Rajesh Roy report the jolt to the contract, and GE's broader strategy of localized manufacturing, follows a political shake-up in India that brought in a new railways minister who apparently decided to have the railroad turn entirely to electric locomotives. Executives at GE have met with the minister to try to keep the deal together. Terminating the deal would be a bitter result for GE, which has already started building a factory 600 miles from Delhi. It also signals the hurdles for India as officials talk about improving dilapidated infrastructure in a country where changing political winds can derail progress.
Florida's famous orange juice industry is being squeezed to death. Pressed by hurricanes, international competition and a disease called "citrus greening," crops are withering and juice processing plants are closing down, the WSJ's Julie Wernau writes, dealing a major blow to an industry synonymous with Florida and critical to the state's economy. Hit by the bacteria, this year's crop will likely be the smallest since the 1940s, extending a downturn that's seen the state go from 53 processing plants in 1977 to just seven today. The cut in production of Florida oranges has helped drive the beverage's price at stores up more than 50% since 2004. It also cuts into one of the goods trucking companies have counted on for outbound business from Florida, potentially straining overall shipping costs. Scientists working at a secret grove are trying to engineer an orange resistant to greening -- which also hurts other citrus -- but that may not reach the market until 2022.
President Donald Trump is tearing down a central pillar of his administration's infrastructure plan. The president told a bipartisan group of lawmakers that he doesn't favor public-private partnerships to finance public works, the WSJ's Ted Mann and Siobhan Hughes report, throwing talks over new federal spending on highways, ports and other infrastructure into a new light. One lawmaker says the president pointed to one signature example of private investment, the Indiana toll road, as an example of a failed public-private partnership. Lawmakers say Trump told them he believes such partnerships are "more trouble than they're worth." The administration has been pressing such investment as a way to leverage federal spending -- and to help turn management of infrastructure over to states and private companies. Mr. Trump's new view may upend the administration's strategy, but it also may make it easier to strike a deal with congressional Democrats who are leery of privatization.
SUPPLY CHAIN STRATEGIES
With e-commerce businesses eating into sales at brick-and-mortar stores, it may be only a matter of time before prices for some online fulfillment space rival those for retail sites. Prologis Inc. is converting a former office building in the Bronx and expects to command rents rivaling the office and retail lease rates in the area, the WSJ's Esther Fung reports, highlighting the growing profile of industrial real estate close to population centers. Urban locations are increasingly important as online retailers look to get closer to consumers for "last-mile" delivery, pushing up warehouse costs. U.S. industrial rents on average rose to a record $5.35 per square foot in the second, according to real estate services firm JLL. Rents for smaller warehouses closer to cities may bring sticker shock to distributors. But experts at Green Street Advisors say warehouse rent in general represents only around 5% of supply chain costs, and the price of falling behind in delivery capability is too big to ignore.
IN OTHER NEWS
U.S. new-home sales fell again in August even as the supply of available homes expanded. (WSJ)
Confidence among American consumers fell slightly in September after major hurricanes struck the U.S. (WSJ)
Federal Reserve Chairwoman Janet Yellen said persistently low inflation could lead to a slightly slower pace of interest rate rises. (WSJ)
The Trump administration is proposing to boost labor standards among the member countries in the North American Free Trade Agreement. (WSJ)
U.S. officials ruled Bombardier Inc. illegally underpriced a big sale of commercial jetliners, adding to a simmering trade dispute with Canada. (WSJ)
German industrial company Siemens AG agreed to merge its rail operations with French train-maker Alstom SA. (WSJ)
U.K. technology company Dyson Ltd., known for its high-end vacuum cleaners and hand dryers, is developing an electric car. (WSJ)
Syngenta AG will settle hundreds of lawsuits from U.S. farmers over the agriculture giant's launch of genetically engineered corn seeds. (WSJ)
The state of Washington denied a permit for a large terminal in Longview, Wash., to export coal to Asia. (Seattle Times)
Qatar Airways may buy more Boeing Co. 747 freighters because of growing cargo demand and needs arising from the Persian Gulf trade embargo. (Bloomberg)
Sporting goods retailer Finish Line is adding technology to make it easier for online customers to return goods. (Internet Retailer)
China's JD.com wants to help retailers that aren't selling online set up "retail as a service" e-commerce operations. (South China Morning Post)
Three-year-old package delivery startup Doorman is shutting down. (TechCrunch)
Shipping lines are stepping up their bid for refrigerated cargo as they seek more profitable business. (The Loadstar)
Cargo terminal operator DP World will end service at Indonesia's Port of Subaraya when its contract there expires in 2019. (Container Management)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at firstname.lastname@example.org
(END) Dow Jones Newswires
September 27, 2017 07:11 ET (11:11 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.