By Paul Page
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Trucking fleets and other diesel users face another worry over rising fuel prices. New trade proposals under the incoming Donald Trump administration aimed at encouraging production of U.S.-made goods could push domestic oil prices higher and raise prices at the pump, the WSJ's Alison Sider and Gunjan Banerji report. The plan, called "border adjustment, would be part of a big overhaul of corporate taxes, and it would levy charges on imports while exempting exports from taxes. Oil analysts believe the tax plan could be behind a recent jump in the volume of options trading. The tax plan would have a far-reaching impact on American businesses, and retailers that depend on imports are girding to minimize the hit on their goods. Refiners that make fuels like gasoline and diesel could end up paying higher prices for domestic crude, and one study concludes that retail gasoline taxes could rise by as much as 36 cents a gallon under the plan.
The U.S. economy has been growing at a faster pace than previously estimated heading toward the end of 2016, but that may not help push more goods through distribution channels to start the New Year. The U.S. Commerce Department raised its measure of third-quarter gross domestic product to 3.5%, revising it up from 3.2%, the WSJ's Eric Morath and Jeffrey Sparshott report, on stronger consumer spending and business investment. The biggest part of the consumer sales came in services, however, and a greater expansion in private inventoriessuggests many businesses may have more than enough goods on hand to meet demand. A separate report shows activity at U.S. factories is gaining traction. Those manufacturing measures have been erratic, however, and signal that big swings in supply and demand remain a feature of the economic landscape moving into 2017.
An investment in expanded service turned to be more costly than Dependable Auto Shippers Inc. had banked on. The Texas-based auto hauler is entering chapter 11 bankruptcy protection, the WSJ's Sarah Chaney reports, blaming its financial woes on debt it took on to buy 25 trucks last year. The company apparently misread the market and miscalculated the returns, noting its cash flow "was in fact not as robust as first thought." Dependable is a niche operator -- its $20 million in revenue was down from $125 million eight years ago -- but its problems come as the boom in car sales appears to be losing speed, hitting operators across motor vehicle supply chains. U.S. and Canadian carloads of motor vehicles and parts fell 4.6% year-over-year in November, and production cuts by the big auto makers early next year suggest shipments will continue to slip.
Billionaire investor Carl Icahn's role in the incoming Donald Trump administration is drawing some attention in the freight rail industry. Mr. Icahn is advising the president-elect on regulatory matters, and the WSJ's David Benoit and Ted Mann report he faces multiple potential conflicts due to his corporate holdings across a variety of industries. That includes his ownership of a tank car manufacturer, American Railcar Industries Inc., that is suing federal rail safety regulators over an order to inspect hundreds of tank cars following a leak that turned up two years ago in a Canadian Pacific Railway Ltd. operation. The Federal Railroad Administration has scaled back the inspection directive it issued, but WSJ Logistics Report's Jennifer Smith writes that the chief executive of ARI says the regulators are overstepping their authority with a potentially costly inspection order they issued after the leak of a single car carrying ethanol.
This will be the last WSJ Logistics newsletter for this year as we take a holiday break. We'll resume publishing on Tuesday, Jan. 3, 2017.
IN OTHER NEWS
The number of Americans applying for unemployment benefits rose to the highest level in six months last week. (WSJ)
The Conference Board's index of leading economic indicators was unchanged last month but remained in positive territory. (WSJ)
Rite Aid Corp.'s same-store sales fell 3.4% in its last quarter as new, cheaper generic drugs ate into pharmacy revenue. (WSJ)
Food products distributor ConAgra Brands Inc. is trying to reduce its discounting after seeing revenue and profit fall in its most recent quarter. (WSJ)
A Chinese metals manufacturer is dropping its bid to expand out of commodities and into Hollywood movies. (WSJ)
Domestic truck demand rebounded in November, with the American Trucking Associations' tonnage index jumping 8.2% from October. (American Shipper)
Amazon is adding Louisiana to the growing list of states in which it charges sales taxes on online purchases shipped to consumers. (New Orleans Times-Picayune)
Amazon received a patent on technology to protect drones from hacking protections when they are out on deliveries. (CNBC)
Japan's Kawasaki Kisen Kaisha Ltd. sued APL Logistics in Tokyo alleging that APL employees spread false rumors that K Line would seek bankruptcy protection. (Lloyd's List)
Chinese auto-glass supplier Fuyao Glass Industry Group is drawing criticism in China for a decision to build a factory in Ohio. (Agence France-Presse)
China's Transfar Logistics Group will invest $13 million with other partners to develop clean-energy logistics vehicles. (Forbes)
Travast Holdings, a China-based dry bulk operator, ceased operations. (Splash 24/7)
Canada's G3 Global Holdings won approval to build an export grain terminal at Port Metro Vancouver by 2020. (Maritime Executive)
An expert says the U.S. whipped cream shortage highlights "the vulnerability of the entire food system." (Washington Post)
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 23, 2016 06:38 ET (11:38 GMT)
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