QAD Precision News Round-Up: 9 July 2021

In the QAD Precision News Round-Up: 9 July 2021, UK signs new free trade deal; Euro zone growth forecast revised upward; Ever Given leaves Suez Canal; Euro zone retail sales improve; DHL to invest $360 million in Americas; plus the basics of import management and more.

Global Trade

UK SIGNS FREE TRADE AGREEMENT WITH NORWAY, ICELAND AND LIECHTENSTEIN

On Thursday, the UK government announced that it signed a free trade deal with Norway, Iceland and Liechtenstein. According to the government’s announcement, this will boost a trading relationship that was worth approximately £21.6 billion in 2020. The trade agreement is expected to improve critical sectors including digital, financial and professional business services. Furthermore, the deal will reduce tariffs and offer duty-free quotas on British exports and support employment in the country. Existing access to duty-free quotas for British exports such as cheese will remain in place, while offering tariff reductions and quotas on pork, poultry and other goods. For more details, please see GOV.UK 

EUROZONE GROWTH AND INFLATION REVISED UPWARD

This week, the European Commission revised upward its estimate for growth in the euro zone for 2021 and 2022. In addition, the EU’s executive arm predicted higher inflation in 2021 than previously forecasted. However, it estimated that consumer prices growth will slow in 2022. The EU Commission now forecasts the euro zone to grow by 4.8 percent in 2021 compared to the growth of 4.3 percent predicted in May. According to the Commission, the revision is due to the reopening of national economies in the bloc in Q2. This has benefited the services sector and it is also expected to boost tourism within the EU. For more details, please see RTE.  

EVER GIVEN LEAVES SUEZ CANAL

On Wednesday, after nearly 3 months under seizure in Egypt, the cargo ship, the Ever Given, left the Suez Canal. Authorities refused to release the ship after it blocked the Suez Canal for six days beginning on March 23. The blockage left many supply chains in flux as the canal is one of the most crucial waterways connecting Asia and Europe. Nearly 12 percent of world trade and 50 ships daily pass through the canal. 

The Ever Given was released following a reparations agreement between its owners and the Suez Canal Authority. The official figure is unknown, but the most recent estimate was $550 million, with negotiations beginning at $916 million. The funds will cover costs and reparations including, loss of traffic and transit fees as well as the salvage operation to move the ship. For more details, please visit NBC News.

US CONSUMER BORROWING SURGES

The Federal Reserve reported on Thursday that consumer borrowing had increased by $35.5 billion in May. This larger-than-expected increase is being attributed to the reopening economy and rising job levels. This is the fourth consecutive month of growth with May showing the largest one-month gain since the records began in 1943. The category including auto and student loans showed the largest growth at $26.1 billion, indicating strong auto sales. The credit card category also showed its largest increase since January 2020 at $9.2 billion as consumer spending increased in the reopening economy. For more details, please visit AP News.

Carriers 

DHL TO INVEST $360 MILLION IN AMERICAS

On Wednesday, DHL Express announced that it would be investing $360 million in the Americas through 2022. DHL plans to use the bulk of the funds to upgrade facilities and increase air capabilities. The investment aims to support the nearly 33 percent increase in shipments DHL saw in the first quarter of 2021. DHL plans to increase North and South America’s network capacity by almost 30 percent. This will result in faster shipment processing as well as earlier deliveries for customers. 

Although DHL made a few changes in 2020, such as setting up pop-up retail stores and electric vehicles, the bulk of the upgrades will occur over the next three years. DHL’s investment is also expected to open more jobs, adding 2,600 new US jobs this year. For more information, please click here.

DPD TRIAL TO TACKLE AIR AND MICROPLASTIC POLLUTION

DPD has announced a partnership with electric vehicle (EV) tyre innovator ENSO to trial new tyres for commercial EVs. The innovative tyres are designed to reduce air and microplastic pollution. The trial is part of Transport for London’s FreightLab Innovation Challenge. This aims to reduce London’s air pollution and road congestion due to increased freight movement in the area. 

ENSO will compare its tyres with industry standards on a fleet of DPD’s Nissan e-NV200 vans during the trial. Improvements in energy efficiency and tyre durability will be measured over a 9 month period. DPD is completing the trial as part of its strategy to be the most responsible and sustainable delivery company in city centres. It also aims to become a leader in the move to electric vehicles in the UK. For more details, please click here. 

Retail 

EUROZONE RETAIL SALES IMPROVE IN MAY

In more Eurozone news, this May, retail sales in the Euro zone increased by more than expected following a drop in April. On Tuesday, data showed that the growth was largely from a demand for non-food products and car fuel. According to the European Union's statistics office Eurostat, retail sales in the 19 countries sharing the Euro expanded 4.6 percent month-on-month in May. This figure was 9 percent higher than the same period last year. Economists polled by Reuters forecasted a 4.4 percent monthly increase and predicted a 8.2 percent year-on-year rise. Retail sales in April fell 3.9 percent, however, they increased 23.3 percent year-on-year. For more information, please see Reuters.  

QAD Precision News 

3 MINUTE EXPLAINER: UNDERSTANDING IMPORT MANAGEMENT

Governments around the world need to track goods coming into their countries. Tracking import activity allows customs authorities to:

• Determine whether or not a good is admissible

• Assess duties and taxes

• Collect trade statistics

• Monitor controlled goods, such as narcotics, chemical weapons or even endangered species

As a result, there are many regulations controlling the inbound movement of goods. Poor processes can result in shipments getting “stuck in Customs”, fines and penalties, or in some cases, shipments being destroyed. In this 3 Minute Explainer, we look at the basics of import management.  To read the full report, please click here.