Today’s Top Supply Chain and Logistics News From WSJ
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United Parcel Service Inc. is shifting some of its operations in Germany to keep goods moving as public-sector strikes target airport operations. The parcel carrier and other airlines are being sideswiped by job actions as staffers walk off jobs at Frankfurt, Munich, Cologne and other German airports, the WSJ’s Laura Stevens and Natascha Divac report. UPS operations aren’t directly involved in the wage dispute but the company’s pilots’ union, the Independent Pilots Association, says it will honor the walkout and won’t cross picket lines. Deutsche Lufthansa AG , which bases its cargo operations at Frankfurt, Europe’s second-largest freight hub, canceled 900 flights because of the strike. UPS should be able to work around the one-day walkout, but the stoppage has to sting: the spent $200 million to expand its Cologne hub two years ago, and it’s the airport’s biggest single employer.
The financial affiliate of Chinese e-commerce giant Alibaba Group Holding Ltd. is becoming a major force in China’s financial system. Ant Financial Services Group—the operator of China’s answer to PayPal —tapped state lenders and financial firms for most of a $4.5 billion funding round that values the operation at roughly $60 billion, the WSJ’s Kane Wu reports. The backing highlights the long shadow that Alibaba and its affiliated businesses cast over commerce in China, an impact that will be felt around the world as the operations uses the new capital to expand. Ant now is one of the most highly valued private technology companies in the world and its Alipay service handles some 58% of all online payments in the country, according to Credit Suisse Group AG . It has also started an online lender, as well as wealth management and banking services. The fresh funding will also provide some ammunition for Alibaba since the companies invest together in other businesses, including e-commerce operations in Asia.
ECONOMY & TRADE
ENLARGE
New figures on the U.S. economy suggest that companies are hunkering down rather than investing. A gauge of business investment—orders for nondefense capital goods excluding aircraft—declined 2.4% in the first quarter, the WSJ’s Harriet Torry reports. Overall new orders for durable goods actually rose a seasonally-adjusted 0.8% in March from a month earlier, but the bump was largely due to higher orders for defense equipment, including military aircraft. But companies aren’t investing in staples like computers, machinery and electrical appliances, suggesting fewer shipments are heading into distribution channels as businesses work off high inventory levels. At 1.41 in the first two months of the year, the ratio of inventories to sales for all U.S. businesses was at its highest point in nearly seven years.
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