UPS United Parcel Service

By Paul Page 

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Retailers and parcel carriers are delivering strong results along with signals of steep changes in sales and shipping patterns this holiday season. Early measures suggest stores met lofty sales expectations, the WSJ's Sarah Nassauer and Paul Ziobro report, as Americans crowded stores and retailers wrapped up one of the strongest holiday seasons in years. U.S. retail sales rose 5.2% from Nov. 1 to Dec. 19, and Mastercard SpendingPulse says online sales rose 18.3% during that time and accounted for a record 13% of total sales. In-store sales grew 4.3%. The delivery backbone of the online economy has held up, with ShipMatrix Inc. reporting on-time performance at FedEx Corp. and the U.S. Postal Service was on track with last year while United Parcel Service Inc. improved its deliveries thanks to extra capacity and new technology. Those efforts suggest carriers have new lessons from this season to take into 2019.

More retailers are turning toward flexibility over fixed assets when it comes to warehousing. The companies and their logistics providers are taking a cue from gig-economy principles by turning to on-demand distribution capacity, the WSJ Logistics Report's Jennifer Smith writes, as they look to stay nimble while digital commerce raises the stakes in supply chains. The idea is to tap into unused warehouse space in a crowded U.S. real-estate market where capacity near population centers fetches a growing price premium. Online startup retailers have been prime targets for such pop-up spots, but they're now attracting big retailers trying to set logistics strategies in the face of volatile demand. Walmart Inc., for instance, used the Flexe Inc. marketplace to get some 1.5 million square feet of temporary space for e-commerce fulfillment this season. Logistics providers are noticing, and establishing their own on-demand warehouse services.

Federal highway safety regulators delivered an interstate victory to trucking companies. A new U.S. Transportation Department ruling effectively runs California's attempts to its own rules for trucker rest breaks off the road. The WSJ Logistics Report's Erica E. Phillips writes the ruling in response to a petition from the American Trucking Associations says the state rules "cause an unreasonable burden on interstate commerce," and are preempted by the federal hours-of-service regulations. That's a win for trucking companies in a long-running battle over California's efforts to impose rules that are tougher than federal restrictions in various areas of transportation. California lawmakers recently passed legislation toughening rules on port trucking by making shipping customers partly responsible for labor-law violations. Trucking groups have mobilized against the rules on meals and rest breaks, but they haven't been able to get Congress to act to clarify that federal rules preempt California's standards.

SUPPLY CHAIN STRATEGIES

A Pennsylvania woolen mill that helped weave the fabric of American history for nearly two centuries is spinning its final chapter. The Woolrich mill in Woolrich, Penn., is succumbing to the driving forces of global business and shutting down after more than 170 years of operation, the WSJ's Ruth Simon reports, idling a plant that fashioned blankets for Union soldiers as well as the flannel shirts that have clothed 21st century youth. The shutdown this year comes as bigger events around the world roiled the business, highlighting the broad forces that are transforming U.S. manufacturing. But some descendants of Woolrich's founder who ceded control of the business also believe it unraveled because of the lack of investment over the years. That helped leave Woolrich in the hands of a private-equity owner who will keep the business name intact but shutter a factory now deemed too costly to operate.

QUOTABLE

IN OTHER NEWS

The pace of U.S. economic output growth was revised down slightly to 3.4% in the third quarter. (WSJ)

A gauge of U.S. business investment in capital goods fell 0.6% from October to November. (WSJ)

Household spending in the U.S. increased in November for the ninth straight month. (WSJ)

A measure of U.S. consumer confidence rose in December. (WSJ)

U.S. inflation slowed sharply in November after a short-lived pickup the previous month. (WSJ)

Canadian firms are maintaining plans to increase their investment in machinery and equipment. (WSJ)

U.K. police released without charge two suspects held for disruptions caused by drones at London Gatwick Airport. (WSJ)

Gasoline production and supplies are soaring even though prices have fallen to the lowest level since August 2017. (WSJ)

JD.com founder Liu Qiangdong is facing strong criticism in China even though U.S. prosecutors declined to charge him in a sexual-assault investigation. (WSJ)

Dutch chemicals company Nouryon BV plans to continue raising prices to offset rising raw materials costs. (WSJ)

Foxconn Technology Group is preparing to launch a $9 billion chip-making project in China. (Nikkei Asian Review)

Grocery stores have gained a bigger share of online sales with services like curbside pickup and home delivery. (Supermarket News)

Danish electronics supplier Bang & Olufsen says troubles bringing in a new logistics provider will cut into its profits. (Logistics Manager)

New York's City Council approved zoning and other changes aimed at restoring apparel production in the city. (Sourcing Journal)

Federal authorities set the maximum $12,934 fine on XPO Logistics Inc. for a warehouse accident in Lockport, N.Y., that killed two workers. (Buffalo News)

Several northeastern states agreed to develop a cap-and-trade system to cut transport-sector carbon emissions. (Fleet Owner)

Daimler Trucks North America delivered its first electric Freightliner truck to Penske Truck Leasing. (Commercial Carrier Journal)

Europe and Asia-Pacific maritime authorities will issue warnings to vessels that appear unprepared to comply with impending sulfur-emissions restrictions. (Lloyd's List)

Ports America will invest $66.5 million under a 50-year lease to operate a Port of New Orleans container terminal. (American Shipper)

Germany's Port of Hamburg will start deepening and widening the River Elbe next year. (Seatrade Maritime)

Macquarie is nearing a sale of Poland's DCT Gdansk terminal to a group of investors including Poland's sovereign wealth fund. (Reuters)

An auditor's report says Kenya could lose control of the Port of Mombasa if it defaults on infrastructure loans from China. (Maritime Executive)

Canadian National Railway Ltd. reached a tentative contract agreement with the union representing track and bridge workers. (Progressive Railroading)

Airfreight volume at Germany's cargo-focused Frankfurt-Hahn Airport rose 58.4% in the first 10 months of 2018. (Air Cargo News)

China's CRRC Corp. completed the first subway cars at its Massachusetts assembly plant. (Springfield Republic)

ABOUT US

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

(END) Dow Jones Newswires

December 24, 2018 13:29 ET (18:29 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.