QAD Precision News Round-Up: 28 May 2021

In the QAD Precision News Round-Up: 28 May 2021, UK trade with the EU declines; China lags on US trade deal purchases; Belarus sanctions could disrupt trade routes; FedEx announces peak surcharges; plus the differences between EU and US parcel shipping and more.

Global Trade 

UK TRADE WITH THE EU DECLINES 23 PERCENT FROM 2018

According to the Office of National Statistics, UK trade with the European Union declined by 23 percent from 2018. The fall was a result of both Brexit and coronavirus disruptions. For the same period, trade with nations outside of the EU fell by 0.8 percent, showing the impact of the post-Brexit trading agreement. 

UK exports to Ireland experienced the largest decline. However, trade falls were also experienced with other EU markets, including Germany, France and the Netherlands. Furthermore, official figures showed that China has replaced Germany as the UK’s biggest single import market for the first time on record. This was partially driven by increased demand for Chinese textiles for face masks and PPE. For more information, please click here.  

VESSELS AT IRISH PORTS DECREASED 8.5 PERCENT IN 2020

On Tuesday, figures from Ireland’s Central Statistics Offices (CSO) showed the number of vessels in Irish ports were down 8.5 percent in 2020. Last year, Irish ports handled a total of 51.4 million tonnes of goods. This was a 3.5 percent decrease from 2019. 

Additionally, according to the CSO figures, Irish ports forwarded 17.3 million tonnes of goods last year. The ports received a total of 34.1 million tonnes of goods during the same period. Furthermore, the figures showed that Great Britain and Northern Ireland accounted for 39 percent of the total tonnage of goods handled in Irish ports by region of trade in 2020. Other EU countries accounted for 36.3 percent. For more details, please see RTE.  

CHINA BEHIND IN FULFILLING “PHASE ONE” TRADE DEAL WITH US 

China is lagging on its commitments to the “Phase One” trade deal with the US. These figures come from the US’s Peterson Institute for International Economics.

China agreed to purchase at least $200 billion more US goods and services over two years compared to purchases in 2017. During the first four months of 2021, China needed to purchase $64.5 billion worth of US goods to stay on track with the deal. However, the data showed that this figure was 73 percent below the levels needed to meet the year-to-date target as of April. 

The purchase of agricultural products came closest to meeting the target. According to US data, agricultural purchases are at 79 percent of target; Chinese data claims it is at 87 percent. Last year, the purchases of US goods by China fell short by approximately 40 percent, according to the institute. The two-year trade deal will end in December 2020. For more details, please click here. 

Carriers

FEDEX ANNOUNCES PEAK SURCHARGES 

From June 21, FedEx will increase three peak surcharges on Express and Ground shipments. These include the additional handling surcharge, a residential delivery surcharge and a peak surcharge on Ground Economy. However, oversized peak surcharges will remain unchanged. According to the company, the reason for the increase in surcharges is due to high volumes and tight capacity. FedEx rival UPS also increased surcharges on international shipments from a number of locations to the US. For more details, please click here.  

DHL ANNOUNCES NEW CARGO AIRLINE IN EUROPE

On Tuesday, DHL announced that it is filing applications with Austrian authorities for a new airline. The new airline’s main focus will be European cargo flights. In addition, DHL intends to reconfigure its DHL Air UK unit into an intercontinental long-haul carrier. According to the company, this move is a response to volume growth and customer expectations for faster e-commerce deliveries. DHL expects the new airline to begin operations on inter-European routes later this year. Furthermore, the carrier is also leasing four more 767-300 freighters to support operations in North and South America. For more information, please see FreightWaves.  

Transportation

SANCTIONS ON BELARUS POSE A THREAT TO AIR AND LAND ROUTES 

The fallout from Belarus’ interception of a passenger flight forced to land in Minsk may disrupt air and land transport between the EU and China. The EU imposed a flight ban and the European Council has called to ban Belarusian airlines from flying over EU airspace and accessing EU airports. Furthermore, it has requested all EU-based carriers avoid Belarus airspace. A ban on overflights of Belarusian airspace would cause flights to be re-routed. This would add flight times and reduce cargo capacity. 

According to reports, France has called for a ban on all movement by land as well. The Eurasian Landbridge rail services crosses Belarus and terminates at Małaszewicze on the Polish border. However, so far, other EU members have rejected this ban. For more information, see Transport Intelligence.  

QAD Precision News

TRANSPORTATION EXECUTION: DIFFERENCES BETWEEN THE EU AND US

Sending a parcel from Austin in Texas to Akron, Ohio is not a big deal. Well, other than the fact that there is nearly 1,400 miles between them — which takes a bit of time to traverse. 

There’s roughly the same distance between Budapest in Hungary and Bilbao in Spain. Distance is the least of your worries in this scenario. Sending a package between the two is far more complicated since you need to cross a number of borders. Your parcel could go a number of routes, but the most direct one will take it across Slovenia, over the top of Italy and around the south of France.

Sending parcels across borders can be a complex challenge. There are 50 sovereign states in Europe. As a result, transporting your goods across Europe is somewhat more complicated than moving goods across the United States. It also means that a European transportation execution system needs different capabilities to a US solution. Geography and demographics demand it. In this QAD Precision Report, Jack Moloney explains the differences. To read the full report, please click here.