Today's Logistics Report: Amazon's Shipping Costs Soar; Supply Chain Tapestry; Trade's Tight Window
25 Ottobre 2019 - 5:20PM
Dow Jones News
By Paul Page
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Expanding its own shipping services is taking a toll on
Amazon.com Inc.'s bottom line. The e-commerce market leader's
profit fell 26% in the third quarter even as revenue grew 24%, the
WSJ's Dana Mattioli reports, as world-wide shipping costs soared
46%. The $9.6 billion in shipping expenses was even more than
Amazon spent in last year's busy fourth quarter and a sign of the
tumultuous changes underway in the company's logistics operations
as it handles more of its own packages. Amazon is taking on those
costs as it rolls out one-day shipping for Prime subscribers,
promising to bring its best customers faster and cheaper delivery.
The results suggest Amazon is struggling like other retailers and
parcel carriers to cope with the costs of e-commerce delivery, but
it's not slowing the company down. Amazon expects to spend another
$1.5 billion in the fourth quarter to expand one-day shipping.
SUPPLY CHAIN STRATEGIES
Tapestry Inc. is putting the finishing touches on a technology
makeover that will overhaul the luxury-goods company's supply-chain
management. The owner of the Coach and Kate Spade brands is
centralizing operations under a common technological backbone that
includes inventory management, distribution and sales in a bid to
cut costs and make the business more nimble. The WSJ's Agam Shah
writes the centerpiece of the effort is an SAP SE enterprise
resource planning system that bridges back-office, sales, logistics
and other systems. The software replaces seven ERP systems Tapestry
had used to integrate systems across brands and geographies. The
company is among many consumer-focused businesses turning to
technology to get more nimble and handle the growing competitive
stresses in retail trade. Tapestry's ERP system provides a
foundation for real-time features including inventory checks and
in-store pickup for online purchases.
ECONOMY & TRADE
The window for passing the Trump administration's renegotiated
trade deal with Mexico and Canada may be closing. U.S. lawmakers
worry that progress on the U.S.-Mexico-Canada Agreement, or USMCA,
could fade against political priorities in the coming election year
if negotiations in Washington over the pact don't conclude soon.
The WSJ's Natalie Andrews reports that Democrats and the
administration are at odds over how to ensure that new labor rules
in USMCA are enforced, a priority for U.S. unions aiming to deter
companies from moving production. There's little progress so far,
although U.S. Trade Representative Robert Lighthizer = met with
lawmakers on Wednesday. Trade at North American borders appears to
be showing some impact from a wavering industrial economy,
meantime. Transborder freight by value fell 1.7% in August,
according to the U.S. Bureau of Transportation Statistics, and
U.S.-Canada truck trade fell 3.1% in the second straight monthly
decline.
QUOTABLE
IN OTHER NEWS
Business activity around the world is slowing, with durable
goods orders in the U.S. falling and eurozone activity near
stagnation. (WSJ)
British police believe the 39 people found dead in a
refrigerated trailer near London were Chinese nationals. (WSJ)
Granite Creek Capital Partners Red Arts Capital are investing in
California shipping company Sunset Pacific Transportation.
(WSJ)
American Airlines Group Inc. and Southwest Airlines face rising
costs and lost revenue from the grounding of the Boeing Co. 737 MAX
jets. (WSJ)
Intel Corp. raised its full-year outlook despite declining
third-quarter earnings. (WSJ)
Ford Motor Co.'s operating profit rose 7.5% in the third quarter
but the auto maker lowered its target for the full year. (WSJ)
Candy maker Hershey Co. bolstered third-quarter results by
raising prices. (WSJ)
3M Co.'s quarterly sales declined and the manufacturer cut its
earnings forecast for the year. (WSJ)
Nokia Corp. cut its outlook for this year, citing the growing
costs of rolling out gear for 5G mobile networks. (WSJ)
A series of startups are challenging established players in
China's fiercely competitive parcel-delivery market. (Nikkei Asian
Review)
Norfolk Southern Corp.'s third-quarter net profit fell 6% as
freight rail volume also fell 6%. (Virginian-Pilot)
Third-quarter profit at trucker Old Dominion Freight Line Inc.
fell 4% as declining tonnage offset improved pricing measures.
(Winston-Salem Journal)
Japan's Ocean Network Express is considering an order for 10
mega-size container ships. (TradeWinds)
Danish authorities are investigating maritime fuel provider
Dan-Bunkering for suspected ties to Syria. (Splash 247)
Cargo traffic for Asia-Pacific airlines fell 6.5% in September.
(Air Cargo News)
Texas-based Shipwell raised $35 million in a funding round to
back expansion of its transportation management software to broader
logistics management. (TechCrunch)
Boston-based Fairmarkit raised $11 million to advance its
machine learning technology for procurement. (VentureBeat)
Amazon broke ground on a 1 million-square-foot fulfillment
center near the Pittsburgh International Airport. (KDKA)
Toronto-based Manitoulin Global Forwarding acquired
Montreal-based Associated Cargo Specialists. (Logistics
Management)
ABOUT US
Paul Page is editor of WSJ Logistics Report. Follow the WSJ
Logistics Report team: @PaulPage , @jensmithWSJ and @CostasParis.
Follow the WSJ Logistics Report on Twitter at @WSJLogistics
Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
October 25, 2019 11:05 ET (15:05 GMT)
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