Today's Top Supply Chain and Logistics News From WSJ
By Paul Page
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Global logistics-property investors are beating a path to South Korea. The burgeoning interest from overseas is being driven by the rapid growth in digital commerce, the WSJ's Peter Grant reports, and it's been helped by government efforts to get Korea's conglomerates, known as chaebols, to loosen their tight grip on the country's supply chains. That's led to more outsourcing to third-party logistics providers, and spurred efforts to overhaul aging warehouse networks that were out of step with the country's rapid growth in internet infrastructure and e-commerce. That's attracted big names in global real estate, including APG Asset Management NV of the Netherlands, Singapore's GIC and Blackstone Group. CBRE Group Inc. says developers delivered more than 6.7 million square feet of new industrial space in the Greater Seoul area last year alone. The planners have a model in mind, with hopes of re-creating the success of a Japanese logistics market that experts say is about a decade ahead of South Korea in attracting foreign capital.
Archer Daniels Midland Co. is looking to grow, but the question is whether it will merely buy more grain or acquire a competitor. The food-products supplier wants to push deeper into South America and Asia to capitalize on expanding agriculture production and growing populations. The WSJ's Jacob Bunge writes ADM is also looking to jumpstart expansion by taking over smaller rival Bunge Ltd. as it seeks to bulk up crop trading and processing in regions where it has a light footprint. The potential consolidation would mark a new step in for global agriculture commodities operations following several tough years marked by steep oversupply and massive harvests that has sent crop prices lower and pressured profit margins. Companies including ADM have been cutting costs by closing some operations and revamping some processing. Bigger consolidation between commodity trading firms would extend that drive, including getting better scale out of their logistics spending.
New U.S. trade figures could reverberate across the flow of goods on the Pacific. The U.S. trade deficit soared 12% last year to the highest level in nine years, as the imports that dominate trans-Pacific shipping jumped 6.7% to a record high. Goods imports were especially strong late in the year, growing 2.9% from November to December. The WSJ's Jacob M. Schlesinger and Harriet Torry write the report provides a new challenge for President Donald Trump, who has pledged to rebalance U.S. trade with the rest of the world, and it comes as the White House is moving to ramp up pressure on China and its trade practices. The goods deficit with China alone rose 8% last year to a record $375.2 billion, or more than half the total U.S. trade gap. Broader trade expansion has been a boon to shipping companies, which have been helped by the strong growth in volumes in both directions. They're anxious to keep that business growing, whether it's balanced or not.
ECONOMY & TRADE
The apparently targeted killing of a Chinese shipping executive in Pakistan is sending shudders through China's trade community and the broader shipping world. Counterterrorism police are investigating the murder of Cosco Shipping Lines Co. local managing director Chen Zhu, who was shot as he sat in a car in the port city of Karachi. The WSJ's Saeed Shah and Costas Paris report the killing comes as Beijing invests more than $55 billion in infrastructure in Pakistan, a showcase country in China's $1 trillion "one belt, one road" transport-and-logistics program. Cosco plans to use the Pakistani port of Gwadar as a transshipment port in the Asia-Europe trade route, with its peer China Overseas Port Holding Co. , pumping more than $1 billion in transshipment terminals and floating gas facilities when the port is developed. There was no initial suspect, and no claim of responsibility. But rebels in the region have threatened to attack Chinese people, accusing them of grabbing resources.
IN OTHER NEWS
Canada's imports climbed 1.5% to a record level in December. (WSJ)
Blockchain technology appears poised to play a broader role in business, and experts say it could change how supply chains work. (WSJ)
General Motors Co.'s fourth-quarter operating profit rose 19% to a record $3.1 billion despite a 5.5% slide in revenue. (WSJ)
A bankruptcy judge gave Toys 'R' Us the green light to close 182 stores and hire consultants to conduct going-out-of-business sales. (WSJ)
Germany's powerful IG Metall labor union reached a pay deal with employers in the metals and electrical industries in the country's southwest. (WSJ)
The Federal Emergency Management Agency canceled a $156 million contract a self-employed entrepreneur won to provide 30 million meals to Puerto Ricans. (New York Times)
A new study shows cleaner fuels for ships could reduce deaths linked to air pollution by around a third. (The Independent)
A Foxconn Technology Group unit that makes panels for smartphones will cut 10,000 jobs this year as it automates factories. (Nikkei Asian Review)
Developers will replace a closed coal-fired power plant west of Chicago with a series of warehouses for online sales distribution. (Chicago Tribune)
Real-estate group JLL says the vacancy rate for U.S. warehouses fell from 5.2% to 5% in the fourth quarter. (Modern Materials Handling)
British online grocer Ocado raised $210 million from shareholders to boost technology in its warehouses. (The Guardian)
U.S. soybean exporters are routing a growing share of their Asia-bound shipments through East Coast ports. (Journal of Commerce)
Price concessions to carriers in the consolidating shipping industry cut into Hutchison Port Holdings Trust's 2017 profit. (Lloyd's List)
The Port Authority of New York and New Jersey will spend $23.7 million to study two options for improving freight connections to rail transport. (Railway Track & Structures)
Port of New York and New Jersey inbound container volume rose 3.6% in December. (American Shipper)
El Paso's city council approved $1.8 million in tax incentives to back a United Parcel Service Inc. expansion at the Texas city's airport. (El Paso Inc.)
BNSF Railway is joining the Blockchain in Transport Alliance. (Railway Age)
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
February 07, 2018 07:12 ET (12:12 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.