TODAY’S TOP SUPPLY CHAIN AND LOGISTICS NEWS
This year’s peak shipping season is separating the haves from the have-nots. The traditional surge leading up to the holidays was a no-show for railroads, truckers and ocean carriers this fall, but the WSJ’s Laura Stevens reports that the parcel carriers that specialize in online holiday shopping are bracing for a boom time. The peak season forFedEx Corp., United Parcel Service Inc., the U.S. Postal Service and Deutsche Post AG’s DHL is only now developing, and their big expectations suggest a stark disconnect between online and brick-and-mortar shopping expectations. It also highlights changing inventory management strategies. Retailers are holding goods back from stores, experts say, to be ready to ship products quickly that are sold online.
The biggest acquisition in the shipping industry in recent years is getting closer to completion. Neptune Orient Lines Ltd. says it has signed an agreement to talk exclusively with France’s CMA CGM SA, putting the carriers on a buyout path that will include due diligence and discussions on financial terms, the WSJ’s P.R. Venkat and Costas Paris report. The French carrier’s role as leading candidate, first reported by the WSJ last week, means A.P. Møller-Mærsk A/S is formally out of the picture. If NOL, which operates on the water through its APL unit, can complete the deal it will give CMA CGM a boost in business between North America and Asia. It also may trigger new consolidation among other carriers, and one question is whether the biggest shipping lines will try to get still bigger or whether smaller lines will try to consolidate.
CMA CGM’s financial results suggest why the French carrier is trying to bulk up its Pacific operations. The carrier’s net profit plummeted 73% in the third quarter, the WSJ Logistics Report’s Loretta Chao writes, on a 9% drop in revenue. The losses look to be largely the result of rapidly declining rates. CMA CGM says its average world-wide freight rates were down 9.2% in the first nine months of the year, a period that has seen a pricing collapse in Asia-Europe services, the world’s biggest trade lane. Rates from Asia to the U.S. are relatively strong, however, helped by a resilient American economy. APL is an important player on that trans-Pacific market, and CMA CGM seems to believe it can boost its profitability on those lanes by building up its own scale.