QAD Precision News Round-Up: 18 June 2021

In the QAD Precision News Round-Up: 18 June 2021, US and EU suspend aircraft tariffs; Euro zone production improves; FedEx expands autonomous delivery tests; UK asks EU to delay meat ban; UPS releases green goals; plus the benefits of DTC selling for manufacturers and more.

Global Trade

US AND EU SUSPEND AIRCRAFT TARIFFS

On Tuesday, the United States and the European Union announced that they would be ending a 17-year-long aircraft tariff dispute. The tariffs primarily affected Boeing and Airbus, who control the majority stake of the commercial aircraft market. The US and the EU agreed to suspend the tariffs for five years in order to better compete with China. Furthermore, both sides agreed to not specifically support their own country’s producers with incentives such as tax breaks that could potentially harm producers in the other countries. The deal came about during the US-EU summit in Brussels. This was the first US-EU summit since 2014. For more details, please click here. 

EURO ZONE PRODUCTION IMPROVES IN APRIL 

In April, industrial production in the Euro zone was better than expected. On Monday, data showed that this growth is due to a more than doubling in the output of durable consumer goods from the year previous as pandemic restrictions eased. According to Eurostat, the EU’s statistics office, industrial output grew 0.8 percent month-on-month for a 39.3 percent year-on-year increase. In addition, from March to April, output in the durable consumer goods sector increased 3.4 percent following 1.2 percent monthly declines in February and March. For more details, please see Reuters.

UK ASKS EU TO DELAY MEAT BAN

On Thursday, the UK asked the EU to delay a post-Brexit trade check on meat, set to take effect at the end of June. The rule, dubbed the ‘sausage ban’, applies to chilled meats from England, Scotland and Wales going to Northern Ireland. The EU responded saying that it would “assess” the request. If the EU approves the delay, the remedy will begin on September 30. The move comes after much dispute regarding the implementation of the Northern Ireland Protocol agreed in the Brexit deal signed last December. The UK’s chief Brexit negotiator, David Frost, has stated that not much progress has been made. For more details, please click here.

Carriers 

UPS AIMS FOR MORE SUSTAINABLE FUTURE

On Wednesday, UPS announced three sustainability initiatives to achieve by 2035. The first goal is a 50 percent reduction in CO2 emissions per package delivered for global small package operations. The second goal is to have all UPS facilities powered by renewable energy. Finally, sustainable aviation fuel will account for 30 percent of fuel used for air fleets. UPS is using the 2035 deadline as a half-way point in meeting its 2050 goal of net-zero emissions. In the near future, UPS aims by 2025 to have 25 percent renewable energy in facilities and 40 percent of its ground operations using alternative fuels. For more details, please click here.

FEDEX EXPANDS AUTONOMOUS PARCEL DELIVERY TESTS

FedEx has announced plans to expand its use of autonomous vehicles for last-mile package delivery. On Tuesday, the company said it is conducting a  multi-year test of equipment from Robotics startup Nuro. In April, the two companies partnered to trial autonomous, multi-stop, and appointment-based delivery operations in Houston. The tests include using Nuro’s “R2” model, an autonomous vehicle designed to drive on local roads. FedEx said it is expanding its tests of the delivery bots in response to accelerated e-commerce demand. According to FedEx, it aims to use automation to improve safety, efficiency, and productivity for its employees. For more details, please click here.

Retail 

H&M SALES IMPROVE AS LOCKDOWNS EASE 

From March to May, Swedish retail giant H&M sales surged 62 percent year-on-year compared to the same period last year as economies reopened following COVID-19 lockdowns. Measured in local currencies, sales improved 75 percent to 46.5 billion crowns ($5.59 billion). However, revenue in Q2 was 19 percent below levels seen in 2019. Stores across Germany and France remained shut, and footfall was slow in many stores that were open. Furthermore, in the first half of June, local-currency sales improved 35 percent year-on-year and were up 2 percent compared to the same period in 2019. The retail company said online sales continued to develop as stores reopened. For more information, please see Reuters.  

QAD Precision News 

THE BENEFITS OF DTC SELLING FOR MANUFACTURERS

The juggernaut that is e-commerce has reshaped almost every industry, shrinking the distance between manufacturers and consumers and allowing brands to build loyalty with customers across a number of channels. 

The digital revolution has meant manufacturers of consumer brands are no longer competing just with their traditional rivals. Digital-only start-ups — based anywhere in the world — can target, and win, previously loyal customers. 

Companies considering moving from wholesale and physical retail to selling their products direct-to-consumer (DTC) need new capabilities. In this QAD Precision Report we look at the benefits and challenges of DTC sales for manufacturers. Read the full report here.