QAD Precision News Round-Up: 25 June 2021

In the QAD Precision News Round-Up: 25 June 2021, the UK negotiates to join CPTPP; Euro zone business activity increases; UPS announces surcharges; Amazon Prime Day sales are strong in the US; plus the benefits of integrating shipping and export management and more. 

Global Trade

UK BEGINS TRADE NEGOTIATIONS TO JOIN ASIA-PACIFIC FREE TRADE PACT

According to the UK government, Britain is to begin negotiations to join a free trade area. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) consists of 11 countries, including Australia, Canada and Japan, and covers a market of approximately 500 million people. In January, following the UK’s exit from the EU, it became the first non-founding country to apply to join the CPTPP. The free trade area aims to reduce trade tariffs on exports such as cars and whiskey between member countries. Furthermore, it promises to remove or reduce 95 percent of charges on traded goods. For more information, please see BBC News.  

EURO ZONE BUSINESS ACTIVITY INCREASES

According to data released on Wednesday, the euro zone has seen business activity increase at the fastest rate in 15 years. The increase, attributed to the reopening of economies in the zone, vaccination programs and the influx of tourism activity. The IHS Markit’s flash composite PMI which measures activity in both manufacturing and services hit 59.2 in June. A score of 50 or above represents an expansion in economic activity. The European Central Bank estimated earlier this month that the euro zone would grow at a rate of 4.6 percent this year and 4.7 next year. For more details, please visit CNBC.

UK FOREIGN SECRETARY VISITS CAMBODIA

On Wednesday, Foreign Secretary Dominic Raab, Britain's top diplomat, met with Cambodian Foreign Minister Prak Sokhonn. The meeting in Phnom Penh is the first visit by a British foreign secretary to Cambodia in 30 years.

In 2022, Cambodia will take over the annual chairmanship of the Association of Southeast Asian Nations (ASEAN). Britain hopes to join the 10-nation association as a ‘dialogue partner,’ the closest non-member partnership. Britain looks to align with ASEAN to build economic relations in the area as China’s influence continues to grow. For more details, please see AP News.

Retail

AMAZON PRIME DAY SALES STRONG IN US 

On Monday, Amazon Prime Day sales saw strong growth in the US despite supply chain challenges. According to data from Adobe’s Digital Economy Index released Tuesday, total e-commerce sales across US retailers grew 8.7 percent from the previous year to $5.6 billion. Analysts predict that total Prime Day sales this year will range from $9.5 billion to $12 billion, which would be a record for the event. 

Toys, home appliances and electronics saw the largest discounts, by both Amazon and brands. However, these discounts were low at 12 percent, 5.2 percent and 3 percent respectively. Prices for Amazon’s own products were significantly reduced as the retailer used Prime Day to push its own brands. This year, a number of sellers reported supply chain issues caused by the coronavirus pandemic. These disruptions resulted in high shipping costs, warehouse capacity limitations and shortages of key items such as chips for electronics. For more details, please click here. 

Carriers

UPS ANNOUNCES PEAK-SEASON SURCHARGES 

This week, UPS announced its peak-season surcharges. The holiday surcharges will be in place from October 31 until January 15 and will affect high-volume shippers the most. The surcharges are based on pre-pandemic volumes from last year. Customers who have shipped over 25,000 packages during any week since February 2020 will be subject to the charges. According to UPS, surcharges can be as high as $6.15 per package in extreme cases. Specific surcharges will be calculated by how much a shipper’s weekly volume during peak season will surpass its average weekly volume during February 2020. An “additional handling” charge will take effect from July 4 and will increase to $3.50 per package. From October 3, this charge will jump to $6 per package. For more information, please see Freight Waves.  

DPD IRELAND TO INVEST €30 MILLION IN DELIVERY HUB

DPD Ireland has announced plans to invest €30 million in a new hub as demand for online deliveries surge. The new hub represents the greatest investment by the DPD Group in Ireland to date and it is expected to be built within 18 months. Last year, volumes handled by DPD Ireland increased by 47 percent as coronavirus restrictions accelerated e-commerce growth. Des Travers, the chief executive of DPD Ireland, expects DPD to handle approximately 22 million parcels this year compared to 17 million in 2020. DPD Ireland has hired over 800 people and doubled the size of its depots in Cork, Kildare and Meath to manage the increase in demand. Additionally, it opened a new 5,000-sq ft distribution centre in April. For more information, please see Independent.  

QAD Precision News

4 BENEFITS OF INTEGRATING SHIPPING AND EXPORT MANAGEMENT

As cross-border commerce grows, facilitating export management is becoming a more urgent business problem for organizations that ship internationally.

To handle this explosive growth, organizations must streamline processes and minimize manual labor, while ensuring compliance with global trade rules. Integrating shipping and export management-related business processes, on a single multi carrier shipping and global trade management platform, is the first step to building a more efficient global trade execution system. 

If your organization is using multiple systems combined with manual processes to handle shipping and export management for international trade, your solution is making it harder—not easier—to get your goods where they need to go. That’s why we believe using a single end-to-end solution for shipping and global trade management is a superior strategy over multiple solutions. In this QAD Precision Report, we discuss the benefits of this strategy. To read the full report, please click here.