QAD Precision News Round-Up: 10 December 2021

In the QAD Precision News Round-Up: 10 December 2021, global trade hits record in Q3; AWS outage; US labor costs up; express and parcel markets expand; 2021 holiday sales to exceed predictions; 2022 changes to the harmonized system and more.

Global Trade

GLOBAL TRADE HITS RECORD IN Q3

According to the United Nations, global trade hit a record $5.6 trillion in the third quarter of 2021. However, concerns regarding the impact of the Omicron coronavirus variant on supply chains are growing. The United Nations Conference on Trade and Development (UNCTAD) said estimates indicate global trade will reach $28 trillion this year, an increase of 23 percent compared to 2020. However, the body expects an uneven recovery across countries. For example, goods trade in the UK is on track for a 23 percent decline this year compared to 2019. In contrast, China and Taiwan expect growth of 16 percent and 23 percent respectively. For more information, please click here. 

AWS OUTAGE CAUSES DISRUPTIONS

On Tuesday, Amazon Web Services (AWS) suffered a major outage lasting approximately five hours. The outage was primarily in the eastern US but affected companies of all sizes. Among those affected was Amazon’s own e-commerce platform. Amazon has not released an explanation for the outage or its full impact. After AWS resumed services, companies had additional delays from required systems checks and restarting their services. Of the $152 billion cloud services market, AWS accounts for nearly one third according to Synergy Research. Amazon has more of the market than both Microsoft and Google combined, its closest competitors. For more information, please click here.

US LABOR COSTS CLIMB HIGHER

Third quarter labor costs are up to a 9.6 percent annualized rate according to the US Labor Department. The previous revised November estimate is 8.3 percent. Compared to last year, the labor cost is 6.3 percent higher. This is also higher than the 5.9 percent rate from April to June. Economists forecast labor costs will rise to an unrevised 8.3 percent. This quarter’s high labor cost is due to a decrease in worker productivity and an increase in worker compensation. In the third quarter, worker productivity is down to a 5.2 percent rate and hourly worker compensation is up 3.9 percent. For more details, please visit Reuters. 

Supply Chain

PORTS OF LA AND LONG BEACH DELAY FEES

The Port of Los Angeles and the Port of Long Beach have delayed accessing delay fees to shippers for the fourth time. The excess storage charge is being pushed to December 13. The original start date for the fees was November 15 but the ports have delayed implementation as conditions at the ports improve. The $100 per day, per container fees increase by $100 per day that the container remains past nine days for transport by truck and six days for rail transport. Long-dwelling containers previously accounted for 40 percent of all containers at the two ports. Now, long-dwelling containers at both ports have declined 37 percent. The improving movement is driving the port’s fee schedules. For more information, please see Freight Waves.

Retail 

2021 HOLIDAY SALES TO EXCEED PREDICTIONS

According to the National Retail Federation, this year's peak season sales may surpass its initial growth predictions of between 8.5 percent and 10.5 percent. As a result, the organization has announced a revised prediction and now estimates 2021 holiday sales to rise as high as 11.5 percent year over year. The NRF said consumers' disposable income has grown by 4.1 percent in 2021 while spending has increased by 12 percent. For more details, please see Retail Dive. 

EXPRESS AND PARCEL MARKETS TO EXPAND BY 10.4% IN 2021

According to the Transport Intelligence (TI) new Global Express & Small Parcels 2021 report, the market has seen high growth rates in 2021. In the first half of 2021, year-over-year growth reached 16.4 percent and total 2021 growth is forecast to be 10.4 percent year-over-year. Furthermore, Ti expects the domestic express market to expand by 9.9 percent this year. 

In 2020 and 2021, the growing B2C segment drove the express market’s expansion. Additionally, shippers seeking to manage and reduce supply chain disruptions caused by the pandemic have fueled growth. The B2B segment of the market will also boost growth along with continuing high levels of demand from e-commerce. For more information, please see Transport Intelligence. 

QAD Precision News 

KEY CHANGES IN THE HARMONIZED SYSTEM 2022

The World Customs Organization (WCO) is making changes to the Harmonized Commodity Description and Coding System. Also known as the Harmonized System or HS, the changes are effective from January 1, 2022. The 2022 edition is a global update, as opposed to annual local, EU updates. HS 2022, the seventh edition of the codes, includes 351 sets of amendments. These cover a broad range of goods moving across borders and make significant improvements to the Harmonized System. In this QAD Precision Report we look at some of the most important changes. To read the full report, please click here.