QAD Precision News Round-Up: 3 September 2021

In the QAD Precision News Round-Up: 3 September 2021, Euro zone inflation rises to 10-year high; UK shop prices up in August; Gap raises sales forecast; Walmart to hire 20,000; plus the benefits of moving trade operations to the cloud and more.

Global Trade

EURO ZONE INFLATION RISES TO 10-YEAR HIGH 

In August, Euro zone consumer prices increased by 3 percent from a year ago, according to preliminary estimates. This follows a 2.2 percent rise in July and, if confirmed, will be the highest inflation reading in a decade. In addition, this week, Germany announced its highest consumer prices since 2008, with a headline inflation rate of 3.4 percent last month. Similarly, France reported its highest inflation rate in almost three years on Tuesday. 

The European Central Bank’s mandate is to achieve 2 percent headline inflation over the medium term. The ECB is forecasting a spike in inflation this year to 1.9 percent, due to what they describe as temporary factors, before falling to 1.5 percent and 1.4 percent in 2022 and 2023, respectively. For more information, please click here. 

Economy

US HOME PRICES REACH RECORD LEVELS

US home-price growth in June reached record levels according to the S&P CoreLogic Case-Shiller national home price index. Prices rose 18.6 percent annually in June, up from 16.8 percent in May. This represents the largest annual gain since the index began recording in 1987. Compared to the last peak in 2006, home prices are 41 percent higher nationally. The 10-city composite score rose to 18.5 percent, up from 16.6 percent the month previous. The 20-city composite score was also up to 19.1 percent from 17.1 last month. 

Home prices this year are at record levels, the growth is attributed to a high demand and low supply. Supply is down 12 percent in July year-over-year according to the National Association of Realtors. Additionally, home sales are slowing too, signed contracts on existing homes in July were down according to the National Association of Realtors. For more information, please visit CNBC.

Retail

UK SHOP PRICES RISE IN AUGUST

According to the British Retail Consortium (BRC), shop prices in the UK increased in August as driver shortages and the costs of Brexit-induced red tape are beginning to hit household budgets. Last month, shop prices rose 0.4 percent month-on-month according to data from the BRC and research group NielsenIQ. In addition, non-food prices have increased by 0.6 percent, driving the growth. This includes a rise in the cost of electrical goods due to microchip shortages and shipping problems. 

Chief Executive of the BRC Helen Dickinson said the situation could worsen in the run-up to Christmas. Additionally, toy retailer, The Entertainer said prices could increase by 10 percent over 18 months due supply chain disruption, labour shortages and higher transport costs. For more details, please see The Guardian.  

GAP RAISES SALES FORECAST

On Thursday, Gap announced that it raised its full-year net sales forecast for the second time. The retailer predicts demand for its Old Navy and Athleta brands will increase as pandemic restrictions ease. Furthermore, Gap lifted its annual profit estimate, sending shares up 7 percent aftermarket. Both projections exceeded market expectations in a strong earnings season for the retailer. 

In the second quarter, Old Navy's net sales grew 21 percent from pre-pandemic in 2019, while Athleta increased 35 percent. According to Gap, fiscal 2021 net sales will grow by approximately 30 percent, compared with a previous forecast in the low-to-mid 20 percent range. Refinitiv data said analysts expected growth of 24.3 percent. For more details, please see Reuters.  

WALMART TO HIRE 20,000 EMPLOYEES

Walmart announced Wednesday that it will hire an additional 20,000 employees. The new positions include both full-time and part-time positions and will be permanent. Walmart is also adding additional automated systems for its pick and pack grocery orders as well as the additional workers. The jobs range from order fillers to freight handlers and have an average wage of $20.37 an hour according to Walmart. In addition, Walmart is offering various incentives in its hiring push including covering 100 percent of college tuition and books as well as bonuses to its warehouse employees. For more details, please visit CNN.

Logistics

C.H. ROBINSON ANNOUNCES NEW CHARGES

Beginning in September, C.H. Robinson announced that it will begin charging drayage surcharges. The freight broker announced the surcharges as a way to offset congestion at US ports. The $175 per container surcharge began on Wednesday and will continue through the end of the year. The fees will also apply to Atlanta rail locations. However, the fees will not apply to ports in Norfolk, Virginia or Oakland, California. The fee will impact both inbound and outbound full-containerload cargo. C.H. Robinson attributes the port congestion to increased volumes and a shortage of labor and equipment. In addition, beginning September 6, C.H. Robinson will add an “origin congestion” surcharge for cargo from Shenzhen, China. For more details, please visit Freight Waves.

QAD Precision News

THE BENEFITS OF MOVING GLOBAL TRADE AND TRANSPORTATION OPERATIONS TO THE CLOUD

Blockchain, the Internet of Things, machine learning and data lakes… These are the technologies that have garnered the most headlines in recent years. But the headlines don’t reflect the fact that many enterprises are not rushing to be early adopters. This is understandable. Change simply for the sake of change is disruptive. More importantly, technological innovations must first prove to be worthwhile in terms of both ROI and improved operational processes.

Cloud computing is one innovation that has proven its value. Although the cloud has been with us almost two decades, widespread migration has been slow. That has changed — and is continuing to change.

In the last five years or so, businesses around the world have increasingly moved their enterprise applications, platforms and infrastructure to the cloud. The change to cloud-based processing is not simply to keep up with technology — there are tangible benefits too. Let’s take a brief look at these. Read the full report here QAD Precision.  

WHY TRADE COMPLIANCE SCREENING MATTERS

In 2019, the US Treasury Department’s Office of Foreign Assets Control issued nearly $1.3 billion in fines for sanctions violations.

In recent years, the United States Treasury Department’s Office of Foreign Assets Control (OFAC) and the US Department of Commerce’s Bureau of Industry and Security (BIS) have increased the penalties for violations of export controls. Fines have been as high as nearly $300,000 per violation or twice the value of the transaction — whichever is greater. These fines apply to compliance missteps. Missteps judged to be willful violations have higher monetary penalties — up to $1 million per violation — and authorities may impose custodial sentences. Along with monetary fines, these types of violations can also damage the company’s reputation. 

In this article for Embedded Computing Design, QAD Precision’s Ian Berman outlines the importance of trade compliance screening.