QAD Precision News Round-Up: 29 October 2021

In the QAD Precision News Round-Up: 29 October 2021, slow economic growth for Taiwan and the US; US announced new port fines; UPS profits jump; shoppers return to stores; plus multi carrier shipping software for peak season and more.

Global Trade

TAIWAN’S ECONOMY GROWS 4 PERCENT IN Q3

In the third quarter, Taiwan’s economy expanded at a slower pace than expected due to coronavirus outbreaks. However, export growth and demand for semiconductors helped to support its economy. In Q3, gross domestic product (GDP) grew 4 percent compared to a year earlier, following a 7.43 percent expansion in Q2. 

This result is the country's slowest rate of growth since the fourth quarter of 2020 when it grew 5.09 percent. Despite this, in September, Taiwan’s exports were the highest monthly figure on record and were worth $39.65 billion. Furthermore, in October, the International Monetary Fund raised its expectation for Taiwan’s 2021 growth to 5.9 percent from 4.7 percent predicted in April. For more details, please see Reuters.  

US ECONOMY GROWTH SLOWS

The US economy is up 2 percent in the third quarter, according to a report released Thursday by the Commerce Department. This is the slowest GDP gain since the second quarter of 2020. Amid the pandemic, GDP decreased 31.2 percent. Economists predicted an expansion of 2.8 percent. 

The slow growth is a result of both supply chain issues and decreased consumer spending. Consumer spending for goods contracted 9.2 percent. Additionally, disposable personal income is down 0.7 percent. Moreover, the personal savings rate declined in the third quarter to 8.9 percent from 10.5 percent in the second quarter. Economists expect the US to bounce back in the fourth quarter and continue to grow in 2022. For more details, please click here.

NEW US PORT FINES ANNOUNCED  

The Port of Los Angeles and the Port of Long Beach announced fines for containers in an attempt to make room in terminals for cargo sitting at anchor. Beginning on November 1, a fine of $100 per day, per container will apply to cargo remaining at the terminal. Announced Monday, containers transported by trucks have nine days before the fine kicks in. However, containers transported by rail will have three days before the fine. 

The ports are bringing in a record 19 percent more containers than in 2018, the previous record. In 2018, the ports processed 17.5 million containers. However, 2021 will top that record, especially after peak season. The two ports account for 40 percent of all sea freight brought into the US. For more information, please visit CNBC.

Carriers 

UPS ANNOUNCES PROFIT JUMP 

On Tuesday, UPS announced a better than anticipated profit for the 3rd quarter, driven by strong e-commerce demand. In addition, the company raised its forecast for full-year adjusted operating margin to 13 percent — up from 12.7 percent. Total revenue increased 9.2 percent to $23.2 billion for Q3,  surpassing average estimates for $22.6 billion by analysts. This peak season, UPS will provide Saturday delivery across the US. Furthermore, it will send oversized, bulky and heavy packages via Roadie, a crowd-sourced, same-day delivery company it is buying in Q4. For more information, please see Reuters. 

DHL PARCEL UK INVESTS $3.8 MILLION IN ELECTRIC VAN ROLLOUT 

DHL Parcel UK announced it is investing $3.8 million (£2.8 million) to add 50 new electric vans across UK cities. The carrier will deploy Mercedes-Benz eSprinter L2 vehicles in Glasgow, Leeds, Manchester, Leicester, Bristol and Southampton. In addition, DHL will add vehicles to the company’s electric fleet in London. The zero-emission vehicles have a range of 95 miles and a payload of 775kg. By 2030, Deutsche Post DHL Group aims to have over 80,000 e-vehicles on the road and 60 percent of its last-mile delivery electrified internationally. For more details, please see Post and Parcel Technology International  

Auto

HYUNDAI Q3 PROFITS DOWN AS CHIP SHORTAGE LOOMS

Hyundai Motors reported third quarter results that are slightly below predictions by analysts amid the global chip crisis. The South Korean automaker announced a net profit of 1.3 trillion won ($1.10 billion) for the third quarter. Consequently, the result was just less than the forecast of 1.4 trillion won, according to Refinitiv SmartEstimate. 

A year earlier during the same period, Hyundai reported a loss of 336 million won from a one-time expense related to engine quality issues and recall. The automaker expects the global chip shortage to last until the end of 2021 or into next year. For more information, please click here.

Retail

E-COMMERCE STRONG BUT IN-STORE SHOPPING ON THE RISE

After a decline from the pandemic and online merchandise supply chain bottlenecks, in-store shopping is on the rise in the US. A report from NPD Group found that 58 percent of respondents plan to shop in stores. A report by Forrester supports this finding. Forrester estimates that 72 percent of retail sales will occur in stores through 2024. 

Consumers also plan to return to stores to pick up their online orders. A Coresight survey found that 20 percent plan to use curbside pickup options and 17.9 percent plan to use buy online, pick up in store (BOPIS) options. 

Furthermore, research indicates that not only will shoppers return to in-store shopping this year, but in the years to come as well. Wells Fargo analysts predict that 2021 holiday sales will increase 11 percent compared to 2020. For more information, please visit Retail Dive.

QAD Precision

WINNING PEAK SEASON WITH MULTI CARRIER SHIPPING SOFTWARE

The last two years have been especially challenging for parcel shippers and their carrier partners. From March last year, parcel volumes skyrocketed beyond all expectations. While much of the world has returned to a semblance of normality, parcel shipping volumes look set to be extremely high during this year’s peak season.

In 2016, 1.66 billion people bought goods online. This year, forecasts suggest that more than 2.14 billion of us will make an online purchase. In this QAD Precision Report we look at how multi carrier shipping software helps high volume shippers navigate these challenges. To read the full report, please click here.