Today’s Top Supply Chain and Logistics News From WSJ

Already coping with diminished sales, Hyundai Motor Co. now faces a likely supply shortage. A series of strikes this week at the auto maker’s plants in South Korea are crippling production, the WSJ’s In-Soo Nam reports, and may cut into exports of some of Hyundai’s best-selling vehicles in the U.S. The work stoppage Monday was the first full walkout at Hyundai in 12 years, and workers plan a series of shorter strikes that will test the company’s resilience as it tries to keep cars moving from the company’s sites. But supply gaps are inevitable since the walkouts hit assembly lines that account for nearly 40% of the company’s global output. Still, some analysts say there may be a silver lining. Hyundai’s U.S. auto inventory has grown to 3.6 months of supply because of weak sales, and a gap in production could provide a break to help the company clear out some inventory.

New financial backing for Flexport Inc. suggests big expansion moves at the technology-focused freight startup. Ryan Petersen, Flexport’s founder and chief executive, tells WSJ Logistics Report’s Robbie Whelan he plans to use some of the $65 million in new backing to build out both new service capabilities and infrastructure to get a bigger share of the global shipping market. The new funding brings Flexport’s total capital raised to $94 million and boosts the company’s profile with support from investors that include Founders Fund, which was co-founded by Silicon Valley billionairePeter Thiel. Founders Fund principal Trae Stephens will join Flexport’s board. The money will help advance technology Mr. Petersen says will help more closely manage and even re-direct goods while they are in transit. Getting more shippers on board would also bring Flexport the scale it needs for more buying power with transport companies.

Retailer Finish Line Inc. says a rebuilt supply chain is helping drive increased sales. The company’s same-store sales expanded 5.1% in the quarter ending Aug. 31 and sales growth accelerated from the quarter before, the WSJ’s Austen Hufford reports, as the apparel retailer scaled back its store count to get more productive. The quarter marked a turnaround in the company’s logistics operations after Finish Line had struggled last year with the rollout of a new warehouse management system that left sites short of inventory. The problems undermined Finish Line’s attempts to ramp up its e-commerce capabilities and to align its goods with a streamlined network of stores. With the supply chain now in sync, the company says it’s now shipping more goods than ever directly to consumers and getting the shipments delivered faster.

SUPPLY CHAIN STRATEGIES
Lamar Hobbs stocking inventory at Shapeways, an online 3D Printing service in Queens, N.Y.ENLARGE
Lamar Hobbs stocking inventory at Shapeways, an online 3D Printing service in Queens, N.Y. PHOTO: AGATON STROM FOR THE WALL STREET JOURNAL

For manufacturers trying to scale back distance in their supply chains, it doesn’t get any closer than making goods in New York City. A burgeoning set of manufacturers are finding homes in New York, defying long-term trends that have seen factories retreat from the city. The companies, from building-fixtures producers in Queens to bakers in Brooklyn, reason that at a certain, relatively small scale, producing goods within one of the world’s most vibrant consumer markets makes economic sense, the WSJ’s Keiko Morris reports. The city says the growth in smaller, niche businesses has helped halt a steep decline in the manufacturing jobs. Factory hiring even ticked up last year, and the companies that are hiring say proximity to a huge market is a major factor. Automation has also helped, allowing companies like Edison Price Lighting Inc. customize its fixtures for New York’s real estate market and get goods delivered with speed that more distant manufacturers can’t duplicate.

FedEx Corp.’s promotion of David Bronczek to company president effective in 2018 may set up the express delivery giant for the retirement of founder and Chief ExecutiveFred Smith. Mr. Bronczek is a 40-year company veteran who has led FedEx Express, the company’s signature air express unit, since 2000, the WSJ’s Mike Esterl reports, and is one of a handful of executives seen as Mr. Smith’s potential successor. Mr. Smith, who will give up the president’s title, hasn’t indicated his retirement is imminent, but he is 72 and industry insiders are watching executive movements for signs of change at the top. One of FedEx’s senior-most executives, head of market development Michael Glenn, just announced his retirement, leaving Mr. Bronczek and Chief Financial Officer Alan Grafmost obvious in the line of succession. At FedEx Express, Mr. Bronczek has overseen a business with diminished growth rates but improving profit margins in an area where ground shipping has become more prominent.

QUOTABLE

Supply chain is one of the last places where you have all of these analog problems, and there’s so much room for these problems to be corrected with digital solutions.

—Trae Stephens, a principal at Founders Fund.

Number of the Day

79,100

Average number of manufacturing jobs in New York City this year, through August.

IN OTHER NEWS

Crude oil prices are falling after statements by Iran dimmed hopes for an agreement by major oil producers to cap or freeze output. (WSJ)

The World Trade Organization slashed its global trade forecast, projecting just 1.7% growth this year and as little as 1.8% expansion in 2017. (WSJ)

The U.S. Justice Department indicted a prominent Chinese businesswoman on charges she and her trading company helped North Korean companies evade U.S. sanctions to procure raw materials. (WSJ)

Neiman Marcus Inc. posted a $407.2 million fourth-quarter loss on a 3.3% decline in sales. (WSJ)

Jet.com, recently purchased by Wal-Mart Stores Inc., has reportedly been buying pet-goods inventories to sell on its site without agreements with the manufacturers. (Fast Company)

Four more ships operated by troubled Hanjin Shipping Co. were arrested in China over the weekend. (IHS Fairplay)

Hyundai Merchant Marine Co. hired consultancy A.T. Kearney to consider expansion efforts as Hanjin struggles through bankruptcy. (Korea Herald)

Michelin North America will build a $270 million distribution center near Spartanburg, S.C., that will handle tires moving from the Port of Charleston to regional sites. (Charleston Post and Courier)

Texas manufacturing production and shipments jumped in September. (San Antonio Express-News)

Grocer Whole Foods Inc. took a stake in delivery business Instacart. (Internet Retailer)

Strong growth in apparel shipments from retailers like Abercrombie & Fitch is feeding growing logistics activity at Columbus, Ohio, facilities. (Columbus Dispatch)

Former U.S. Rep. Nick Rahall is joining the Eno Center for Transportation’s Freight Working Group. (Progressive Railroading)

Adidas AG unveiled the first shoe made by robots at its “speedfactory” in Germany. (Futurism)

The U.S. Federal Reserve is proposing tighter capital requirements and limitations on financial holding companies that engage in physical commodities activities. (Banking Journal)

New York-based online food delivery company FreshDirect LLC raised $189 million in a new funding round as it seeks to expand its geographic footprint. (Reuters)

Indian online food delivery company Zomato acquired logistics technology startupSparse Labs. (Economic Times)

Korean startup Soul Booster wants to manufacture and ship customized underwear. (Business Korea)

[Source:-The wall Street journal]