QAD Precision News Round-Up: 30 July 2021

In the QAD Precision News Round-Up: 30 July 2021, US economy grew in Q2; China’s industrial profit slows; IMF warns inflation could be persistent; chip shortage hits smartphone industry; plus multi carrier shipping software for global enterprises and more. 

Global Trade

US ECONOMY STEADY IN Q2 

In the second quarter of this year, the US economy grew solidly as government aid and Covid-19 vaccinations increased spending on travel-related services. According to the Commerce Department, gross domestic product increased at a 6.5 percent annualised rate in Q2. In the first quarter, the economy increased at a revised rate of 6.3 percent. The government published revisions to GDP data with the second-quarter estimate. This data showed the economy contracted 3.4 percent last year, instead of 3.5 percent as previously predicted. However, this was still the largest decline in GDP since 1946. For more details, please see RTE.  

IMF WARNS INFLATION COULD BE PERSISTENT

On Tuesday, the International Monetary Fund warned that there is a risk inflation will be more than transitory. In the US, the consumer price index (CPI) reached 5.4 percent in June, the fastest pace in nearly 13 years. In the UK, the inflation rate was 2.5 percent last month. This was the highest level since August 2018 and above the Bank of England’s 2 percent target. 

On Tuesday, the IMF estimated that inflation in 2022 will return to levels seen before the pandemic. However, it warned temporary pressures could become persistent as uncertainty remains high. The IMF kept its global growth forecast for 2021 at 6 percent but it revised its predictions for next year. It’s April prediction of a global domestic product rate increased to 4.9 percent from 4.4 percent. For more details, please see CNBC.  

CHINA’S INDUSTRIAL PROFIT SLOWS IN JUNE

In June, profit growth at China’s industrial firms slowed for the fourth consecutive month due to an increase in raw material costs. Data from the National Bureau of Statistics on Tuesday showed industrial firms' profits grew 20 percent year-on-year in June to 791.8 billion yuan ($122.27 billion), following a 36.4 percent increase in May. Although the Chinese economy has largely recovered from the pandemic, it has faced new challenges in recent months. These challenges include higher raw material prices and global supply chain crunches. For more details, please click here. 

GLOBAL CHIP SHORTAGE HITS SMARTPHONE INDUSTRY 

This year, there has been a global shortage of semiconductors due to a number of factors including factory closures due to the coronavirus pandemic and increased demand for consumer electronics. In particular, the shortage has impacted automakers such as Ford and General Motors while video game consoles have also felt the effects. Apple and Samsung stockpiled critical components early in the pandemic and have largely avoided shortages. However, smartphone manufacturers are now starting to feel the impact of the global fallout. 

Following a sales decline of 12.5 percent in 2020, demand for smartphones grew 26 percent in the first quarter of 2021, according to Gartner. Apple CEO Tim Cook said that silicon supply pressures will impact iPhone sales in addition to other products such as the iPad. Dale Gai, semiconductor analyst at Counterpoint Research said he expects the chip shortage to reduce device makers production forecasts by 10 percent. For more information, please see CNBC.  

Carriers 

DPD’S OXFORD FLEET BECOMES FULLY ELECTRIC

DPD has announced that it has switched its fleet delivering parcels in Oxford to be fully electric. Oxford is DPD’s first all-electric city, however, nine further ‘green cities’ in the UK are being confirmed by the end of 2021. The parcel deliveries in Oxford will be from DPD’s eco-depot in Bicester. 

DPD’s new Symmetry Park hub is its first to achieve net zero carbon in construction, in accordance to standards set by the UK Green Building Council (UKGBC). DPD delivers over 15,000 parcels from the depot each week using a fleet of 40 electric vehicles. The facility, which was officially opened in June, is the most sustainable facility in DPD’s UK network and could create up to 250 new jobs once fully operational. For more information, please click here. 

UPS PEAK DEMAND TO EXCEED DAILY CAPACITY 

UPS CEO Carol Tomé has said that expected package delivery demand during peak season this year will exceed daily capacity by approximately 5 million packages. To prepare for the surge in demand, UPS is adding capacity ahead of peak season. UPS CFO Brian Newman said this includes an additional 2 million square feet of sorting space and more cargo aircraft. The parcel delivery company also announced a surcharge increase ahead of peak season. These charges are aimed at high-volume shippers and those experiencing an increase in demand. For more details, please click here.  

QAD Precision News 

WHY GLOBAL ENTERPRISES NEED MULTI CARRIER SHIPPING SOFTWARE

When a company works across multiple countries and locations, logistics can become very complicated. In order to meet customer demands for on-time delivery, many companies partner with a single global carrier. If centrally managed, this has its advantages, including volume discounts.

Far more likely is that each region or office negotiates its own contract with a carrier or carriers. Each carrier will have its own rules, pricing structure, labeling requirements and so forth. 

As a result, shipping data will be spread across multiple systems. Without centralized control and standardized transportation procedures, shipping costs are difficult to track. 

Furthermore, the customer service experience may be completely different depending on where the customer is located. In order to access the best shipping rates, whether shipping internationally or domestically, global companies should consider a multi carrier shipping solution. In this QAD Precision Report we look at how multi carrier shipping software helps global enterprises to control shipping costs and improve customer service. To read the full report, please click here.