Logistic Report: Building Atlantic Ports; View from the Box; Retail's Unlikely Storefront Savior

Date: Wednesday, March 6, 2019
Source: The Wall Street Journal

The arms race among U.S. container ports is drawing more investment. The Jacksonville Port Authority’s new $238 million agreement with Seattle-based port operator SSA Marine is the latest in a series of big-money projects aimed at transforming the East Coast import landscape for bigger ships. The WSJ Logistics Report’s Costas Paris writes the Florida port is also advancing a $480 million plan to upgrade its facilities, including deepening its channel. The bigger container ships are a growing part of the trade scene on the Atlantic since an expansion of the Panama Canal in 2016 enabled larger vessels to come from Asia. The Port of New York and New Jersey is putting the finishing touches on its $1.7 billion project to raise the Bayonne Bridge. And Georgia’s Port of Savannah is looking at a $2.5 billion improvement plan, including a new, higher bridge over the Savannah River. 

The view from the front lines of the global shipping economy suggests trade tensions are doing little so far to slow down business. Container lessor CAI International Inc. saw a 24% jump in its revenue last year as trade heated up, and Chief Executive Victor Garcia tells the WSJ Logistics Report’s Jennifer Smith that demand has barely slipped this year despite concerns that shippers would hunker down after last year’s big inventory push. The company has “had less than half a percent decline” in demand for boxes to start 2019, barely a pullback at all in the usually-slow first quarter. That’s not to say there aren’t concerns: Shipping lines “are being cautious” in taking on new equipment, he said. But trade-fueled disruptions in supply chains could help CAI, since it would mean moving more of the company’s containers to new locations.

E-Commerce

Some shopping malls believe they’ve found an unlikely savior from the e-commerce juggernaut  Realtors are looking longingly at Amazon.com Inc. and the company’s growing plans to invest in physical stores, the WSJ’s Esther Fung reports, which comes as the big names in mall-based retail are shutting stores and sites are struggling to attract high-profile tenants to fill empty spaces. Amazon’s online sales growth has undermined much of their business, but the company is increasingly interested in brick-and-mortar formats, from book shops to smaller experimental offshoots of its Whole Foods stores. Brokers and landlords are enthusiastic about Amazon’s plans to launch a new grocery store chain, saying the online giant has more expertise than other retailers to draw crowds of shoppers. Says one expert, “When Amazon comes knocking, it feels like Apple has showed up.”

Economy & Trade

The automotive sector is looking more than ever like it needs a tune-up. Investors and analysts are growing more concerned that the global auto industry is sputtering, the WSJ’s Sam Goldfarb reports, and is joining retail and energy as sectors with worries over potential financial distress. AlixPartners LLC found in a recent survey that a third of restructuring experts named autos as one of the three most likely sectors to face distress in 2019. After holding steady last year, U.S. auto sales are widely expected to fall in 2019, and light vehicle sales world-wide fell 8% in January, with a sharp decline in China. The weakness is being felt in distribution channels: Motor vehicle shipments and coal are the worst-performing lines for U.S. railroads so far this year, with shipments for both down 2.5% in the first eight weeks of 2018, according to the Association of American Railroads.

 

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