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QAD Precision News Round-Up: 19 April 2019

In the QAD Precision News Round-Up: 19 April 2019, the EU threatens tariffs on US goods; Japan and US hope to reach quick trade deal; Africa is now the world’s biggest free trade zone; JD tightens logistics spend; Amazon to close Chinese marketplace; retail spending is up in the US and the UK; and we look at why you should audit your parcel invoices.

Global Trade

EU MAY IMPOSE TARIFFS ON $20BN US GOODS

Last week, the US threatened tariffs on $11 billion worth of EU goods. This week, the EU drew up a list of possible tariffs on $20 billion worth of US goods. The proposed tit-for-tat tariffs are a result of the long-running dispute over Boeing and Airbus aircraft subsidies. The World Trade Organization has declared that EU subsidies of Airbus have had a negative impact on the US. But the WTO has also noted that the US has as yet failed to remove some Boeing subsidies. All this bickering comes amid plans for the EU to engage in trade talks with the US. The EU’s proposed tariffs cover a diverse range of products. They include aircraft, chemicals and food such as frozen fish, citrus fruit and ketchup. For more see the BBC.

US AND JAPAN HOPE TO EXPEDITE TRADE DEAL

This week, Japan’s chief trade negotiator said that trade talks with the US will be accelerated in the hopes of reaching a deal quickly. Toshimitsu Motegi finished the first round of discussions with US Trade Representative Robert Lighthizer in Washington DC on Tuesday. The talks focused on agriculture and cars. The two nations will discuss digital trade at a later date. Japan hopes to avoid US tariffs on automobile exports, while the US wants access to Japan’s agricultural market and to reduce its trade deficit. You can read more about this here.

AFRICA NOW HAS WORLD’S LARGEST FREE TRADE ZONE

The Africa Continental Free Trade Agreement (AfCFTA) has come into force, making the continent the world’s largest free trade zone. Gambia is the 22nd country to ratify AfCFTA, which meets the African Union’s minimum threshold for the agreement to take effect. AfCFTA is forecast to increase intra-African trade by 52 per cent by the year 2022. The agreement also aims to remove tariffs on 90 percent of goods. When fully ratified, AfCFTA will cover more than 1.2 billion people with a combined GDP of $2.5 trillion. Africa’s largest economy, Nigeria, is not a signatory. For more, please click here.

E-Commerce

JD DROPS COURIER SALARIES TO TRIM LOGISTICS COSTS

Richard Liu, founder of the Chinese e-commerce giant, JD.com, has said that the company will no longer offer a basic salary for couriers. In 2018, JD’s logistic operations made a net loss of $420 million. Liu explained the change of policy as a result of “too few orders externally and too high a cost internally.” JD plans to pay couriers according to how many packages they handle. You can read more about this on TechCrunch.

AMAZON TO CLOSE CHINESE MARKETPLACE

Amazon is to close its online store in China from July. The domestic marketplace allows Chinese consumers to buy from local sellers. Amazon has faced tough competition from Chinese rivals, JD.com and Alibaba. Although the domestic marketplace is closing, customers will be able to order goods from Amazon’s global store. The company will also continue its cloud business in China. For more information, please click here.

Retail

US RETAIL SALES ARE ON THE RISE

This March, retail spending on cars, gasoline, furniture, and clothing in the US grew at the fastest pace since September 2017. The US Commerce Department said that sales increased a seasonally adjusted 1.6 percent from February. During the past year, US retail spending grew 3.6 percent. For more details, please click here.

BRITISH SHOPPERS SPLASH OUT DESPITE BREXIT

This March, Britist shoppers turned to the high street and online stores despite the political disruption over Brexit. The UK’s Office for National Statistics reported that retail sales grew 1.1 percent in March. Retail sales had been forecast to drop 0.3 percent amidst the Brexit turmoil. Year-on-year retail sales grew 6.7 percent between March 2018 and March 2019. The ONS said that all categories of retail spending — except from department stores and household goods — grew in the first three months of 2019. Internet shopping accounted for 18.6 percent of all purchases in March. For more details, please see The Guardian.

QAD Precision News

WHY YOU NEED TO AUDIT PARCEL SHIPPING SPEND

If shipping is a critical component of your operations, so is controlling your transportation costs. Transportation is a major factor in the final calculation of the cost of getting your goods to end user. Rising fuel costs, capacity issues, dimensional pricing, unexpected accessorial charges and customs delays all contribute to rising transportation costs. Logistics spend is forecast to reach $10.6trn in 2020, with transportation accounting for 70 percent of the costs. Parcel volumes are rising — largely driven by e-commerce — and are likely to surpass 100 billion by 2020. Most enterprises understand the importance of tracking and auditing their transportation costs. But if small, express shipments have not been a core part of their distribution model, many have been slower to apply the same principals to parcel shipping. In the latest QAD Precision Report, we look at the necessity of auditing your parcel invoices. To read the report, please click here.

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