New UPS venture adds China customers
United Parcel Service Inc. is setting up a joint venture in China to haul more U.S.-bound goods and capitalize on booming e-commerce in the world's most populous nation.
The partnership with S.F. Holding Co. will offer customers more routes, shipping capacity and service options, the companies said in a statement. S.F. Holding and UPS will each invest $5 million in the 50-50 venture, the Chinese company said in a statement to the Shenzhen stock exchange.
The deal gives the U.S. courier access to S.F. Holding's network of 13,000 customers, many of them small and midsize Chinese companies, UPS Chief Executive Officer David Abney said Friday on Bloomberg TV. It also offers a stronger foothold in one of the world's hottest markets for online retailing. The initial focus will be on deliveries going from China to the U.S.
"We are equally as impressed and looking forward to U.S-to-China, and then, of course, China to the rest of the world and back," Abney said. "One plus one equals a lot more than two in this case."
UPS employs about 6,400 people in China and operates more than 200 flights to and from the country weekly, primarily providing import and export services.
-- Bloomberg News
In N.Y. tobacco suit, UPS told to pay up
United Parcel Service Inc. was ordered by a judge to pay $247 million to the state and city of New York for turning a blind eye to shipments of untaxed cigarettes from American Indian reservations that undermined anti-smoking efforts.
U.S. District Judge Katherine Forrest in Manhattan said she wanted to send a message to the most senior executives at UPS about the cost of misconduct. Modest penalties, she said, "would not make a sufficient corporate impact" on the company.
"Significant penalties are appropriate given the public harm specifically sought to be addressed by the statutes at issue and given the egregious and prolonged nature of UPS's conduct," Forrest said in her ruling Thursday. "The court is also troubled by UPS's consistent unwillingness to acknowledge its errors; UPS has persisted in claiming it did nothing wrong."
The decision comes two months after Forrest concluded that UPS had failed to comply with a 2005 deal it struck with the state by continuing to service contraband cigarette enterprises operating out of smoke shops on Indian reservations throughout New York. UPS argued that it complied with the law and that the dispute was triggered by the city and state mistaking cartons of legally shipped "little cigars" for cigarettes.
The company pledged to appeal.
-- Bloomberg News
Durable-goods orders drop 0.7% in April
WASHINGTON -- U.S. orders for long-lasting manufactured goods dropped in April for the first time in five months, and a key category that tracks business investment went nowhere for the second straight month.
The Commerce Department said Friday that durable-goods orders fell 0.7 percent in April after rising 2.3 percent in March. The April downturn was the first since durable-goods orders fell 4.6 percent in November.
Despite the April drop, American manufacturing has bounced back in recent months from a slump early last year.
Orders for transportation equipment fell 1.2 percent last month, pulled down by a 9.2 percent drop in the volatile commercial aircraft category. Orders for military aircraft jumped 7.1 percent. But orders for cars, trucks and auto parts rose 0.3 percent last month after falling in February and March.
Orders for capital goods, excluding aircraft and military equipment, were flat for the second straight month. That category tends to offer clues about where business investment is headed.
Durable goods, ranging from refrigerators to battleships, are items meant to last at least three years.
-- The Associated Press
Electric cars' cost forecast to plummet
Battery-powered cars will soon be cheaper to buy than conventional gasoline ones, offering immediate savings to drivers, new research shows.
Automakers from Renault SA to Tesla Inc. have long touted the cheaper fuel and running costs of electric cars that helps to displace the higher upfront prices that drivers pay when they buy the zero-emission vehicles.
Now research from Bloomberg New Energy Finance indicates that falling battery costs will mean electric vehicles will also be cheaper to buy in the U.S. and Europe as soon as 2025. Batteries currently account for about half the cost of electric vehicles, and their prices will fall by about 77 percent between 2016 and 2030, the London-based researcher said.
"On an upfront basis, these things will start to get cheaper, and people will start to adopt them more as price parity gets closer," said Colin McKerracher, an analyst at the London-based researcher.
-- Bloomberg News
OPEC leader to pare oil exports to U.S.
After the U.S. market was spared from OPEC output cuts, the Saudi Arabian energy minister announced plans to "markedly" reduce exports to the kingdom's political ally in the coming weeks in an effort to reduce swollen crude inventories in the world's biggest consumer.
"Exports to the U.S. will drop measurably," Energy and Industry Minister Khalid al-Falih told reporters after a Thursday meeting between the Organization of the Petroleum Exporting Countries and other major producers in Vienna. Saudi crude shipments to the U.S. will fall below 1 million barrels a day next month, said two people briefed on the kingdom's oil policy, a reduction of more than 15 percent from the average so far this year.
Al-Falih spoke after the group of 24 nations agreed to extend their production curbs for another nine months until the end of March 2018, a decision that followed five months of cuts that failed to make a significant dent in oil stockpiles in developed economies.
The move will shift the focus of Saudi export reductions toward the U.S. -- where customs data allow near real-time monitoring of shipments -- and away from less transparent markets in Asia and Europe.
The slump in oil prices after Thursday's agreement showed growing skepticism about the effectiveness of the cuts.
-- Bloomberg News
Business on 05/27/2017