By Paul Page

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It looks like e-commerce is becoming the driver of hiring growth in logistics. The transportation and warehousing sector added 14,700 jobs last month, and WSJ Logistics Report's Jennifer Smith writes the gains came in operations focused on handling goods that were moving late in the holiday season. The U.S. Labor Department reported the biggest share of the hiring, some 11,700 new jobs, came in the courier and messenger sector -- that is, the parcel operators geared toward the so-called last-mile delivery of packages. Warehouse and storage companies and truckers also added jobs at a rapid pace, hiring that came as retail-industry reports show e-commerce sales grew four times faster than sales at brick-and-mortar stores over the holidays. Hiring in industrial sectors, including freight railroads, remains weak, however, and those businesses will need an upturn in manufacturing and construction before they resume adding jobs.

The stakes for U.S. retailers in a Republican proposal to tax imports are becoming clearer, and for companies that depend in foreign-made goods the impact could be enormous. The plan, part of a developing proposal to overhaul corporate taxes and spur domestic manufacturing, would drive up the costs of imported clothes, furniture and other imported goods, the WSJ's Susan Pulliam, Sarah Nassauer and Richard Rubin report, potentially slashing the earnings of major retailers. An analysis from RBC Capital Markets says the plan would cost six big retailers, including Wal-Mart Stores Inc. and Costco Wholesale Corp., nearly $13 billion, and wipe out Best Buy Co.'s annual earnings. The companies may raise prices, and one analyst estimates consumer apparel prices could rise up to 15%. That would also trigger a search for savings on logistics and shipping, and big changes in trade flows, even while the battle over taxes and imports is still unfolding.

The U.S. distributor of Corona beer is already figuring out what it will do if Congress imposes new taxes on imports. Constellation Brands Inc. Chief Executive Rob Sands says the company is looking for ways to to shift most its costs back into the U.S. Those plans are only hypothetical for now, but the WSJ's Vipal Monga and Jennifer Maloney report they could include buying more natural gas and packaging materials in the U.S., lowering the tax proposal's impact on imports like Mexican beer. The company says it has some flexibility beyond overhauling the entire supply chain. But Mexican beer still has to be made in Mexico, and that means the company will probably have to raise prices if it can't find enough savings in its supply chain. Other importers may face a similar choice, along with questions about the impact the costs will have on their sales.

E-COMMERCE

The shift to online shopping turned into a stampede this holiday season, and the rush went straight to Amazon.com Inc. Several big chains reported soft or declining sales in their first assessments of the holidays, the WSJ's Suzanne Kapner reports, even as consumers stepped up their e-commerce spending. First Data Corp. estimates online sales grew nearly 11% from the year before, compared with just 2.7% growth at brick-and-mortar stores. Amazon garnered 38% of the online revenue, by one measure, while Best Buy Co. was a very distant second with a 4% share. That will add urgencyto retailer efforts to adjust their so-called omnichannel strategies -- the ability to adjust supply chains for both online fulfillment and physical stores. The big department stores face the biggest challenge since the apparel category that anchors their sites was the worst performer during the holidays, and clothing is an area of major interest for Amazon this year.

Innovation in the seafood supply chain may run through the farmland of central Iowa. With imaginative hog farmers running operations and investment from Canada, the managers of VeroBlue Farms hope to turn their indoor facility into North America's biggest land-based fish farm. Detailed by Mother Jones magazine, the site is an unusual solution to questions surrounding the industrial fishing industry, including growing concerns that wild stocks are being overfished. The farm already is shipping barramundi, a hearty species suited well to aquaculture, to seafood markets, restaurants and food distributors. The project recalls the introduction of fish farming in Chile, where the raising of non-native salmon has become a major industry. But the fish still need a steady supply of water, and sourcing water in big quantities remains the biggest hurdle to bringing real scale to the operation.

QUOTABLE

IN OTHER NEWS

Fiat Chrysler Automobiles will invest $1 billion in existing plants in Michigan and Ohio to expand its sports utility and truck lineup. (WSJ)

Limited Stores LLC, a pioneer in import apparel distribution through dedicated logistics operations it launched in Ohio, is closing all 250 of its U.S. stores and will sell goods only online. (WSJ)

U.S. imports jumped 1.1% in November to the highest level since August 2015 but exports slipped 0.2%. (WSJ)

The number of U.S. oil rigs in operation reached its highest level since December 2015. (WSJ)

Boeing Co. closed 2016 with its weakest year for new jet orders since 2010. (WSJ)

Iran took delivery of its first new Airbus SE jetliner since sanctions were lifted on the country last year. (WSJ)

An advisory panel says the U.S. must protect the American semiconductor industry as a national-security imperative against a Chinese plan to dominate the sector. (WSJ)

Apple Inc. plans to open its first retail store in South Korea. (WSJ)

J.C. Penney Co. joined a host of brick-and-mortar retailers reporting a disappointing holiday season, with same-store sales down 0.8%. (WSJ)

Organized crime maintains a strong influence at the New York Harbor cargo terminals even as employment at the port has declined. ( New York Times)

Two Japanese utility plants received their first shipments of U.S. liquefied natural gas, opening a new market for American energy exports. (Nikkei Asian Review)

Container shipping rates from China reached their highest levels in nearly two years ahead of the upcoming Lunar New Year. (The Loadstar)

The order backlog held by South Korean shipyards fell in December to the lowest level in over 13 years. (Maritime Executive)

Violent protests broke out in Sri Lanka over plans to turn private land into a port industrial zone managed by state-controlled China Merchant Holdings. (Associated Press)

Air China Cargo became the first mainland Chinese carrier to bar the transport of shark fins on its aircraft. (South China Morning Post)

The value of freight shipped between the U.S. and Canada and Mexico fell in October for the 21st time in 22 months. (Heavy Duty Trucking)

Oregon's Port of Portland is suing agrochemical giant Monsanto Co. for contamination of the Willamette River and the port's harbor. (American Shipper)

The U.S. Department of Agriculture will test the use of food stamps in online grocery shopping. (Internet Retailer)

Parcel International will work with airline KLM on a same-day delivery service for e-commerce shipments across Europe. (Lloyd's Loading List)

Logistics provider Agility will spend $10 million to expand its regional freight hub in Bahrain. (Times of Oman)

ABOUT US

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

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

(END) Dow Jones Newswires

January 09, 2017 06:30 ET (11:30 GMT)

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