By Paul Page

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There are big bumps in the road toward Donald Trump's proposal to send $1 trillion over 10 years to new infrastructure construction. The plan that was outlined late in the presidential campaign relies entirely on private financing, the WSJ's David Harrison reports, and experts say the support is likely to fall far short of adequately funding improvements to roads, bridges and airports. Infrastructure spending has gotten uncommonfocus since Mr. Trump's election, and shipping interests are anxious to see a turn toward fiscal stimulus that would push spending on highways. The wrinkle is that the plan would move toward privatization and tolls, using a tax break aimed at luring capital to projects. There's strong public opposition to turning highways into toll roads, however, and experts doubt it could draw enough private capital to make a difference. That will leave lawmakers facing a longstanding question of how to pay for their infrastructure intentions.

New policies under Donald Trump may redraw the U.S. trading relationship with China, the largest exporter of goods to the U.S., as well as China's role in the global economy. A key issue looming early next year is the potential that a Trump administration will declare Beijing a currency manipulator, the WSJ's Ian Talley reports, raising the prospect of tariffs on Chinese exporters that figure to push their relationship onto new, contentious ground. Currency could provide the spark for a trade war that would complicate negotiations on other strategic and economic issues -- and risk a legal backlash by U.S. importers. And with the Trans-Pacific Partnership dead in the U.S., the WSJ's Mark Magnier and Chuin-Wie Yap report that China is set to push its own rival trade pacts. China is making inroads through state-owned companies that are investing heavily in China's ambitious Silk Road strategy. That chain of connected shipping services and trade deals is aimed at creating a seamless flow of goods from Asia to the Middle East and Europe, with U.S. business out of the picture.

E-commerce delivery demands are triggering a kind of arms race in facilities among private package carriers. FedEx Corp. and United Parcel Service Inc. have been opening more and larger sorting facilities, WSJ Logistics Report's Erica E. Phillips writes, and they're putting the sites closer than ever to population centers. The latest is a 1.2 million-square-foot site that UPS is planning for Atlanta, and that comes as the FedEx Ground division has been adding big package-handling sites that include a new 300,000-square-foot sorting center in Pittsburgh. The sprawling sites are aimed at allowing big online customers to drop more orders into facilities that can handle big numbers of shipments without going through multiple sorting hubs that add complications, time and potential mistakes to ground parcel distribution channels.

SUPPLY CHAIN STRATEGIES

J.C. Penney Co. is finding that spreading out its sales risk carries a cost in the supply chain. The retailer saw sales fall in the quarter ending Oct. 29 and higher shipping costs cut into gross margins, the WSJ's Suzanne Kapner reports, as Penney brought appliances back into its stores. The company is returning to appliance sales to become less dependent on weather-related categories such as apparel and less vulnerable to online retailers such as Amazon.com Inc., since refrigerators and stoves aren't typical online purchases. But Chief Executive Marvin Ellison says rolling out appliance sales "created disruption that negatively impacted sales." The company kept inventories thin as another hedge against the troubled clothing category, a strategy Penney will continue after a September that Mr. Ellison noted was the "warmest September ever on record."

The Middle East is getting a big addition to e-commerce marketplaces. Investors in the United Arab Emirates and Saudi Arabia are launching a web-sales business called "Noon" with a $1 billion stake aimed at creating a homegrown version of Amazon.com Inc. and Alibaba Group Holding Ltd., the WSJ's Nicolas Parasie reports. The venture will offer 20 million products -- ranging from fashion to electronics -- to Middle Eastern households, and is backed by Emirati businessman Mohamed Alabbar and Saudi Arabia's sovereign-wealth fund. The Middle East is a small online sales market. But the attention from the Riyadh-based business should give e-commerce sales a boost, and also will likely draw more of the express flights and focused regional logistics operations aimed at service-intensive online sales deliveries.

Singles' Day at Alibaba is getting bigger, but the real impact of the online event remains under debate. The Chinese e-commerce giant recorded $17.7 billion in sales on its platforms on the special annual sales day, the WSJ's Eva Dou reports, easily breaking the record $14.3 billion in goods that vendors pushed through last year. The sales surge comes with big questions, however. Critics contend the numbers are inflated by orders that never ship or are quickly canceled, and Singles Day revenue is under scrutiny by regulators in China and the U.S. For retailers, such sparkling sales events come with some clouds. There are signs they simply pull forward sales that would happen later in the year anyway, and perhaps at higher prices. Like offers for free shipping, such promotions may boost revenue at the cost of long-term profits.

QUOTABLE

IN OTHER NEWS

A court in Seoul said bulk-shipping operator Korea Line Corp. had outbid Hyundai Merchant Marine Co. for key assets of bankrupt Hanjin Shipping Co. (WSJ)

The Obama administration gave up hope of enacting its sweeping Trans-Pacific Partnership trade agreement. (WSJ)

The U.S. dollar reached its highest level since March on world currency markets. (WSJ)

Copper prices have soared to a 17-month high in a surge triggered by hopes of more U.S. construction after the U.S. election. (WSJ)

Samsung Electronics Co. will buy U.S. auto-parts supplier Harman International Industries Inc., making the smartphone maker a major player in automotive technology. (WSJ)

Foxconn Technology Group, the main maker of Apple Inc. devices, posted an 8.7% decline in third-quarter profit. (WSJ)

Tata Steel Ltd., one of the world's biggest steelmakers, swung to a surprise net loss in its fiscal second-quarter. (WSJ)

SAIC Motor Corp., China's largest auto maker, struck an agreement that paves the way for it to build and sell Audi AG vehicles in the country. (WSJ)

Martin Whitmer, whose lobbying-firm clients include railroads and asphalt companies, is leading the Donald Trump transportation and infrastructure transition team. ( New York Times)

Commodities-handling company Watco Cos. LLC will acquire 20 bulk terminals from Kinder Morgan, most on waterways and rail lines. (Progressive Railroading)

Zipline, a drone-delivery startup focused on medical supplies, raised $25 million in new investment from venture-capital firms Andreessen Horowitz and Sequoia Capital. (Recode)

Online grocery delivery companies expect a strong surge in business over the holidays. (CNBC)

Air Canada is launching its first freighter service to Europe with weekly 767 all-cargo flights between Toronto and Frankfurt. (Lloyd's Loading List)

Descartes Systems Group acquired Australia-based supply-chain software company 4Solutions. (American Shipper)

The "foodie" culture of millennials is driving big changes in agriculture supply chains. (Forbes)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @lorettachao and @EEPhillips_WSJ, and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Subscribe to this email newsletter by clicking here: http://on.wsj.com/Logisticsnewsletter .

Write to Paul Page at paul.page@wsj.com

(END) Dow Jones Newswires

November 14, 2016 06:42 ET (11:42 GMT)

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