By Paul Page
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Amazon.com Inc. is taking a big leap in the delivery world's drone wars. The e-commerce giant made its first customer delivery by drone, bringing a package containing popcorn and a Fire TV video-streaming device to a two-story farmhouse in the U.K. in 13 minutes, the WSJ's Georgia Wells and Laura Stevens report. The delivery marks the start ofoperations for Amazon's drone program, which aims to get packages to customers in 30 minutes or less. Amazon is expanding its test in the coming months to dozens of customers. There are still big regulatory hurdles and plenty of skepticism about the practical utility of drones in commercial delivery. But the U.K. test suggests Amazon is aiming at reachable targets. Rural deliveries are a tough economic proposition for express operators that would rather fatten their profit margins with high-density, short-distance drives. Drones may make more economic sense for far-flung, remote customers, at least those who want their popcorn in a hurry.
Retailers are showing with shipping that they have plenty of confidence in U.S. consumer demand. The neighboring ports of Los Angeles and Long Beach reported a combined 6.4% increase in import volume in November, WSJ Logistics Report's Erica E. Phillips writes, finishing off the peak shipping season on an unusually high note. Business was just as buoyant on the outbound side, with combined exports expanding 11.8% over the same month a year ago. It was one of the busiest Novembers on record for the port complex, and a record-setting month for Los Angeles, where all boxes including empties were up 22% over last year. The big volumes, along with strong gains at other ports on both coasts, suggest that with the stock market running high and unemployment running low, companies have an upbeat outlook heading into 2017.
Hyundai Merchant Marine Co. says its growth plans are being delayed, not shelved. The South Korean carrier's chief executive, C.K. Yoo, tells the WSJ's In-Soo Nam that HMM is dropping out of a joint bid with Mediterranean Shipping Co. for a controlling stake in the operator of the Port of Long Beach's biggest container terminal. But Mr. Yoo says the shipping line will return to that potential investment later, and intends to pursue full membership in the 2M Alliance after having to settle for scaled-down participation in that shipping agreement. The moves are part of Hyundai Merchant Marine's attempt to survive in the wake of the collapse of fellow South Korean carrier Hanjin Shipping Co. Hanjin's messy bankruptcy has shaken the trust of cargo shippers in Korea's other operators and left HMM in a tight spot in a tough container shipping market. Mr. Yoo insists the company will remain independent but needs tie-ups with operators like MSC and fellow 2M member Maersk Line to keep sailing.
SUPPLY CHAIN STRATEGIES
An online meal delivery company in London is trying to boost its business by helping food providers get closer to their customers. Deliveroo, one of the world's biggest meal-delivery companies, this year placed shipping containers in south London and invited restaurants to cook their dishes inside. The WSJ's Stu Woo reports the tactic, which allows theeateries to prepare meals for nearby takeout orders, is proving so popular the company is rolling out more permanent satellite kitchens. Deliveroo is doing in the physical world what e-commerce companies are doing on the web by effectively creating a marketplace for a mix of suppliers that Deliveroo matches to customers. It's tied together by an app, naturally, and is feeding a burgeoning market by helping restaurants break from their brick-and-mortar foundations. That also allows Deliveroo to extend its reach by using its own facilities as distribution hubs rather than relying on busy and far-flung restaurants.
The automotive supply chain is giving a boost to zinc. Prices for the base metal have soared more than 70% this year, the WSJ's Biman Mukherji reports, as demand in auto manufacturing helps make zinc a leader this year for commodities. Key to the surge: consumers in India and China are buying more cars that use rustproof galvanizedsteel, which is made with zinc. Add to that the growing optimism in the U.S. about infrastructure spending, which will call for more raw commodities imports, and the outlook in metals markets is getting downright bullish. Industry fundamentals are also critical. For zinc holders, the growing demand comes at an especially good time, following the closing of several mines world-wide in recent years amid slumping prices. Analysts say that means demand could outstrip supply for some time.
Measuring supply-chain sustainability is turning into big business. EcoVadis, a French technology firm that ranks companies for environmental responsibility, ethical treatment of workers and other practices, is certainly finding that's the case. The company is taking in nearly $32 million in venture funding, WSJ Logistics Report's Erica E. Phillips writes, as the business of vetting corporate supply chains grows rapidly. Founded nine years ago in France, EcoVadis is one of several companies aiming to make information about supply chains easier and cheaper to track. The ability to follow materials through increasingly complicated global supplier networks is growing more important as governments crack down on abuses in supply chains, and the new investment suggests it may become a bigger business in its own right.
IN OTHER NEWS
The Federal Reserve will raise its benchmark short-term interest rate, raising household and business borrowing costs, and expects to lift it faster than previously projected in 2017. (WSJ)
Singapore's Global Logistic Properties Ltd. established a $1.5 billion fund aimed at buying U.S. logistic assets in the next three years. (WSJ)
U.S. retail sales growth slowed to 0.1% from October to November. (WSJ)
Industrial production in the U.S. fell 0.4% last month, including a 0.1% decline in factory output. (WSJ)
Steinhoff International Holdings NV and Shoprite Holdings Ltd. are in talks to combine parts of their businesses to create an African discount retail giant. (WSJ)
A panel of financial and business executives recommends that companies disclose their potential losses from the impact of climate change. (WSJ)
The U.S. Department of Agriculture released new rules aimed at protecting farmers from anticompetitive business practices by meatpacking companies that buy their animals. (WSJ)
General Electric Co. will sell its Industrial Solutions and GE Water units as it looks to cut costs and raise profit margins. (WSJ)
Inditex SA, parent of fast-fashion retailer Zara, reported accelerating sales growth at physical and online stores as Christmas approached. (WSJ)
General Motors will invest $334 million in three auto-parts plants in upstate New York. (Associated Press)
The U.S. Army Corps of Engineers proposed deepening the lower MississippiRiver's main channel to 50 feet to allow larger ships to serve Louisiana ports. (New Orleans Times-Picayune)
Mexico is using military troops to protect freight trains and trucks carrying automotive traffic in areas hit by growing vandalism and theft. (Automotive Logistics)
Seoul Incheon International Airport will add a 4.3 million-square-foot logistics center focused on perishables. (Korea Times)
U.S. regulators will maintain the requirement that trucking companies randomly test 25% of their drivers for drug and alcohol. (Commercial Carrier Journal)
The PricewaterhouseCoopers firm recommended to a South Korean court that bankrupt Hanjin Shipping Co. be liquidated. (Maritime-Executive)
U.S.-listed ship owners have raised $3 billion from equity and debt offerings so far this year, matching 2015. (IHS Fairplay)
CVS Health Corp. plans to build a 762,000-square-foot distribution center in Kansas City, Mo. (Hutch News)
An Australian court fined terminal operator Toll Transport a record $750,000 for safety violations in the death of a Port of Melbourne dock worker. (Melbourne Herald Sun)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @lorettachao, @smithjenBK and @EEPhillips_WSJ and follow the WSJ Logistics Report on Twitter at @WSJLogistics.
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(END) Dow Jones Newswires
December 15, 2016 07:06 ET (12:06 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.