QAD Precision News Round-Up: 11 June 2021

In the QAD Precision News Round-Up: 11 June 2021, UK retail sales strong in May; US trade deficit narrows slightly; DPD doubles UK EV fleet; US Senate passes $250 Billion tech and manufacturing Bill; G7 Summit areas of focus; leveraging import classification and more.

Global Trade 

US TRADE DEFICIT NARROWS IN APRIL 

In April, the US trade deficit fell slightly to $68.9 billion after hitting a record $75.02 billion the month previous, according to Census Bureau data. Exports increased 1.1 percent to $205 billion for the month and imports declined 1.4 percent to $273.9 billion, equating to a decline of 8.2 percent in the trade deficit. The decline in imports resulted from a fall in demand for consumer goods. That category decreased by $2.6 billion and included a $1.7 billion decline in mobile phones and other household goods. In addition, automotive vehicles, parts and engines fell $1.1 billion as semiconductor shortages hindered production and resulted in shutdowns at some auto plants. For more details, please see CNBC. 

AREAS OF FOCUS AT THE G7 SUMMIT 

The G7 summit will take place on June 11 in Cornwall and the seven member countries: US, Japan, Germany, France, UK, Italy, and Canada will discuss several trade issues. These include global corporation taxation, aimed at stopping large companies from shifting profits to low-tax jurisdictions. Inquiries by the US and the EU with the UK into the Northern Ireland Protocol. Leaders plan to encourage fair multilateral trade by calling for stricter WTO measures for China. G7 members will also explore measures to address global climate change as well as vaccine accessibility for developing countries. For more information, please click here.

US SENATE PASSES $250 BILLION TECH AND MANUFACTURING BILL

On Tuesday, the US Senate passed the US Innovation and Competition Act. The $250 billion bill aims to encourage US technological advancements to better compete with tech forerunner China. The bill provides $52 billion to fund semiconductor research, design and manufacturing initiatives. The bill will also provide funding for scientific research, subsidies for chipmakers and robotics makers, as well as the National Science Foundation. The bill is one of the largest industrial bills in US history and received bipartisan support, passing with a vote of 68 - 32. For more details, please see CNBC.

Carriers 

DPD DOUBLES EV FLEET IN THE UK 

DPD has announced a deal with vehicle manufacturer MAXUS for 750 e DELIVER electric vans, doubling the delivery firm’s total Electric Vehicle fleet in the UK. As part of the deal, DPD will receive 500 long wheelbase 3.5t electric vans and 250 smaller e DELIVER 3, bringing its EV UK fleet to almost 1,500 vehicles. Furthermore, the delivery company plans to have 1,700 EVs in operation by the end of 2021. The deal includes both the 72kw and longer range 88kw versions of the e DELIVER 9. This gives the vans a significantly greater range than anything previously available in the UK. For more details, please see Post and Parcel.  

Retail

US RETAIL SALES EXPECTED TO REACH $4.56 TRILLION IN 2021

On Wednesday, the National Retail Federation (NRF) upwardly revised its growth expectations for retail sales in the US for 2021. It increased its prediction to between 10.5 percent and 13.5 percent, as more Americans get vaccinated and the economy reopens at a faster pace than previously expected. The trade group now predicts annual US retail sales of between $4.44 trillion and $4.56 trillion in 2021. In addition, The U.S. retail group forecast GDP growth of almost 7 percent in 2021, higher than the 4.4 percent and 5 percent projected at the beginning of this year. For more details, please see Reuters. 

UK RETAIL SALES STRONG IN MAY 

In May, UK retail sales grew at the strongest rate since the beginning of the coronavirus pandemic as lockdown measures were eased. According to the British Retail Consortium (BRC), total sales surged by 10 percent in May compared to the same period in 2019, before Covid-19 affected consumer spending. The increase was driven by strong growth in furniture sales and homewares, while clothing and footwear sales also recovered. Last month, e-commerce sales in the UK declined to 39 percent compared with a three-month average of 64 percent as physical stores reopened. However, online sales remain considerably higher than the pre-pandemic growth of 1.5 percent in May 2019. For more information, please click here.  

QAD Precision News 

LEVERAGING IMPORT CLASSIFICATION: 5 LESSONS LEARNED

Jerry Peck is a Licensed Customs Broker, with more than 30 years’ experience working in product classification — mostly within the corporate trade operations of Fortune 300 multinationals. In this QAD Precision Report, Jerry recounts “lessons learned” from his time in industry.

Correctly classifying goods with the correct Harmonized System (HS) 10 digit codes is no easy task. Classification is difficult for three major reasons:

1. Lack of detailed product descriptions

2. The complexity of the General Rules of Interpretation (GRI) of the HS System

3. Lack of time to deal with issues 1 and 2

When I first began my career as an Entry Writer for a Customs Broker, I had very little control over how and when pending Entries landed on my desk. 

When I moved to the industry side of the fence, beginning with Mattel Toys, I learnt the importance of gaining early visibility into the arrival of goods.

In other words, if I could give myself more time, I could more easily address the first two major reasons that make Classification a challenge. 

Better still, if I could gain visibility to the complete process — in particular where the build/buy decisions are made — it was possible to turn Classification from a tactical process to a strategic one. Read the full report here.