Today's Top Supply Chain and Logistics News From WSJ
By Paul Page
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Wal-Mart Stores Inc. is shifting its growth strategy from storefronts to the web. The retailer will open fewer than 25 new U.S. stores in its next fiscal year and undertake other cost-cutting measures aimed at freeing up funds to go in part toward building up its e-commerce capabilities. The actions at a company that opened more than 200 stores two years ago mark perhaps the strongest statement yet about the direction of Wal-Mart's sales and signal that the company is building new distribution channels to meet the growing e-commerce market. The WSJ's Sarah Nassauer and Austen Hufford write that Wal-Mart's investment in e-commerce infrastructure have grown more urgent since Amazon.com Inc. bought Whole Foods, creating more direct competition for Wal-Mart's big grocery business. The retailer is adding new delivery and click-and-collect options for groceries, and it expects recent acquisitions to boost online sales some 40% next year. The new cost-cutting shows that serving those customers while maintaining profit margins remains a challenge.
IKEA is looking at bolting a new distribution channel onto its supply chain. The icon of assemble-it-yourself furniture will test selling its Klippan sofas, Norden tables and other goods on third-party online marketplaces, the WSJ's Saabira Chaudhuri reports, a big step in IKEA's bid to make its furniture more accessible to more people. The company is in the midst of overhauling its strategies both online and for its stores by scaling up delivery options and placing more stores closer to urban customers. It also bought online marketplace TaskRabbit last month to help customers assemble its furniture. IKEA so far has resisted third-party sales channels but growing competition is wearing down its do-it-yourself approach. Furniture is already one of the fastest growing categories for Amazon.com Inc., and the e-commerce giant is adding warehouses and logistics operations for bulky items to reach further into consumers' homes.
Drone deliveries are stuck in a holding pattern, at least in the U.S. An advisory panel meant to recommend rules for operating drone couldn't agree on proposals, the WSJ's Andy Pasztor reports, a potentially serious setback for efforts to expand commercial drone operations. The committee couldn't reach consensus on basic questions over the categories of drones that should require remote monitoring and tracking. That will make it more difficult for federal regulators to set rules that would satisfy law-enforcement agencies, hobbyists and companies that are looking to add drones to their business mix -- including delivery operators. There's some consensus on smaller drones, but it may take two or three more years to develop technical standards for communication links and collision avoidance technology for larger drones flying at higher altitudes. That's raising concerns in business and among policy makers who worry that big operators are looking overseas to test package delivery and other applications that promise major economic boosts.
Meal-kit makers are making big inroads with consumers, but they're still trying to convince investors they can deliver profits. HelloFresh SE aims to be the latest company to test the market on with an initial public offering in Frankfurt, the WSJ's Cara Lombardo reports, with a goal of raising up to $354 million. The IPO follows this year's offering in New York by Blue Apron Holdings Inc., which has seen its shares lose nearly half their value since their debut in June. There's no lack of growth: HelloFresh's revenue grew nearly 50% in the first half of the year, but losses also expanded to $67 million, a measure of the tough logistics challenge the companies face. Meal-kit operators also face growing competition as supermarkets and food-delivery companies enter the market. The WSJ's Heather Haddon reports that expansion by Amazon adds new wrinkles, bringing in an entrant that delivery services worry will be more focused on market share than profits.
IN OTHER NEWS
The International Monetary Fund raised its global economic outlook for 2017 and next year amid accelerating growth this year ahead of earlier expectations. (WSJ)
Honeywell International Inc. plans to spin off its transportation and home businesses into separate companies by the end of next year. (WSJ)
Canadian housing starts fell in September for the first time in nine months. (WSJ)
The Sears Canada Inc. board approved the liquidation of most of the insolvent retailer's assets after rejecting a private equity-backed takeover plan. (WSJ)
The European Union will seek to slash carbon-dioxide emissions from cars and vans by about a third in the decade starting 2021. (WSJ)
Pfizer Inc. is exploring a sale or spinoff of its Consumer Healthcare division, the producer of Advil. (WSJ)
British weapons maker BAE Systems will eliminate almost 2,000 jobs as it streamlines operations. (WSJ)
United Parcel Service and the Teamsters union opened talks on a new five-year contract covering 250,000 workers. (Atlanta Journal-Constitution)
Vietnam's apparel shipments to the U.S. rose 5.6% in the first eight months of the year. (Sourcing Journal)
Canadian Pacific Railway Ltd. struck a deal with Genesee & Wyoming to connect U.S. Midwest agriculture exporters to Canada's Port of Vancouver. (Journal of Commerce)
The amount of crude in floating storage on tankers has fallen sharply amid tighter oil supplies. (Lloyd's List)
Deutsche Post DHL is working with technology group Nvidia to roll out self-driving package delivery vans next year in Germany. (CNBC)
The U.S. Postal Service is working with the University of Michigan on development of a self-driving mail van for rural operations. (Wired)
JPMorgan Chase & Co and Singapore's Temasek Holdings are leading a $100 million investment round in business-to-business digital payments startup Bill.com. (Reuters)
Store owners in India say big e-commerce companies are violating guidelines on sales and competition. (Times of India)
UPS is building a packaging sorting center in northwest Houston. (Houston Chronicle)
A Pennsylvania garment wholesaler will pay $1 million to settle charges that its Chinese supplier made false declarations to avoid customs duties. (American Shipper)
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
October 11, 2017 06:35 ET (10:35 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.