QAD Precision News Round-Up: 22 October 2021

In the QAD Precision News Round-Up: 22 October 2021, UK/New Zealand reach a trade deal; Japan’s exports are down; Israel/India to restart trade talks; UK border controls begin in January; Ford invests in electric parts in the UK; cloud-based parcel shipping and more.

Global Trade 

UK, NEW ZEALAND REACH FREE TRADE AGREEMENT 

The United Kingdom and New Zealand have reached a free trade agreement that will reduce tariffs on bulldozers, wine, buses and clothing. After 16 months of talks, the draft agreement is the latest negotiated by the UK following its exit from the European Union. 

The UK hopes the agreement, with no potential to boost its economy, will assist Britain in joining the Trans-Pacific Partnership (CPTPP), a free trade area of 11 Pacific nations including New Zealand. In 2020, trade between the United Kingdom and New Zealand was worth £2.3 billion ($3.2 billion), accounting for approximately 0.2 percent of total UK trade. For more information, please see CNN Business. 

JAPAN’S SEPTEMBER EXPORTS DOWN

Growth in Japan’s overseas shipments declined in September. Overseas shipments are up 13 percent from last year’s level. Economists forecast an overall growth pace of 10.59 percent. In context, exports in September fell a seasonally adjusted 3.9 percent from the month previous. This is the first month-on-month drop since February. 

Furthermore, Japan’s auto shipment fell 40 percent compared to last year. This decrease is as a result of a drop in shipments to the United States. Despite this, compared to 2019 levels, Japan’s exports have gone up by 7 percent. Japan also reported a 39 percent increase in imports resulting in a $5.4 billion trade deficit. Japan’s export slowdown is a result of supply chain bottlenecks and coronavirus restrictions. For more information, please click here.

INDIA, ISRAEL TO BEGIN FREE TRADE TALKS 

India and Israel have agreed to restart trade talks on a free trade agreement from November. The two countries aim to sign a deal by mid 2022. The free trade talks announcement followed a meeting of the countries' foreign ministers in Jerusalem. In addition, the countries agreed on mutual recognition of vaccination certificates and expanded cooperation on water and agriculture. 

In the last financial year ending March 2021, total merchandise trade between the two nations was $4.67 billion, according to data from India's trade ministry. For more details, please see Reuters.  

UK BORDER CONTROL TO BEGIN IN JANUARY 

British freight executives are asking European exporters to the UK to prepare for full customs declarations beginning in January. From the beginning of next year, UK customs authorities will require a complete full customs declaration to permit shipments across the border. In January 2021, the UK government halted border controls, when Brexit, along with disruptions caused by the pandemic, threatened to shut down UK-continental Europe supply chains. 

Despite the ongoing disruption caused by the pandemic, Margaret Whitby, head of border industry engagement at the UK border and protocol delivery group, said shippers expecting the UK government to abandon the regulations will be disappointed. For more details, please click here. 

Automotive

FORD INVESTING MILLIONS IN ELECTRIC PARTS IN THE UK

Ford announced on Monday it will invest $316 million in its Halewood factory in the UK. The investment will go toward building electric car components. As a result, this will be the first European in-house Ford location making electric parts. The factory will produce 250,000 power units a year from the middle of 2024. Ford’s plan is partially supported by the British government’s Automotive Transformation Fund. This means that the UK government will provide around 10 percent of the total investment value for automotive firms. 

In addition, Nissan recently announced a new battery plant in Britain. Furthermore, Stellantis also announced it will build electric vans in Britain. There was concern in the automotive industry that Brexit would result in UK/EU trade barriers. However, the exit deal between London and Brussels established a zero tariff for the automotive sector. Tariff free access is subject to a minimum part requirement from the region. Ford pledges by 2030 all its cars for the European market will be electric. For more information, please click here.

Retail 

AMAZON PLANS TO HIRE 150,000 SEASONAL WORKERS 

On Monday, Amazon announced plans to hire 150,000 temporary workers in the US for this year's peak delivery season. As a result, this brings the total number of jobs that the company has made available over the last few months to 315,000. Amazon listed 20 states that will have the largest number of seasonal positions available which include: California, New York, New Jersey, Pennsylvania, Illinois and Texas. 

As a result, the number of seasonal positions open at Amazon exceed those of other companies such as UPS who plan to hire 100,000 temporary workers. In addition to the seasonable jobs, the e-commerce behemoth has 40,000 corporate and IT jobs available. To read more on this story, please see Freight Waves.  

AMAZON AND IKEA TO BUY ZERO-CARBON OCEAN FREIGHT

Amazon and Ikea have both committed to purchasing ocean freight services with zero-carbon fuels by 2040. The companies signed with other retailers under the name Cargo Owners for Zero Emissions Vessels (COZEV). The group also includes: Unilever, Michelin, Brooks, Patagonia, Tchibo, and Frog Bikes. The agreement also includes tracking maritime emissions, interim targets prior to the 2040 goal, and other efforts to reduce emissions in shipping. For more information, please visit Freight Waves.

QAD Precision News 

CLOUD PARCEL SHIPPING: CROSSING THE SUPPLY CHAIN GAP

One word comes to mind for the current landscape of global shipping and logistics operations: disruption. With a record number of ships floating off the coast of US ports; a post-Brexit, post-COVID UK causing fuel, labor and supply chain shortages; and a manufacturing shortage of raw materials due to pent-up demand, it’s no secret the global trade and transportation network is in uncharted territory.

At the same time, consumer demand is still at an all-time high. E-commerce and online storefronts have set a new standard, promising one- to two-day delivery, coupled with free or reduced shipping costs. This has pushed carriers to their limits. 

To cross this gap, parcel shippers should strongly consider cloud-managed logistics software. Shipping operations powered by the cloud have proven to increase flexibility, boost efficiency and mitigate inevitable disruptions. In this QAD Precision Report, we share why cloud logistics software is the bridge to upgrading your global shipping operations amid disruption. To read the full report, please click here.