QAD Precision News Round-Up: 13 August 2021

In the QAD Precision News Round-Up: 13 August 2021, US consumer prices up; UK spending increases; John Lewis expands distribution operations; chip shortage halts production at Nissan; USPS releases proposed surcharges; plus export management explained and more.

Global Trade 

US CONSUMER PRICES UP 5.4 PERCENT IN JULY 

On Wednesday, the US Labor Department said that its Consumer Price Index increased 5.4 percent in July from a year previous. This result matched the 5.4 percent increase in June. Moreover, this is the largest increase in more than a decade — since August 2008. 

In addition, on a month-over-month basis, the CPI increased 0.5 percent. This is in line with the forecasts from economists surveyed by Dow Jones. However, excluding energy and food, the CPI rose by 0.3 percent in July. This was just below expectations for growth of 0.4 percent and was well under June’s increase of 0.9 percent. Compared to 2020, the core figure is up 4.3 percent.  For more details, please click here. 

CONSUMER SPENDING IN THE UK INCREASES IN JULY 

In July, consumer spending in the UK increased due to sporting events, summer holidays and the lifting of coronavirus restrictions. According to payment card provider Barclaycard, consumer spending grew 11.6 percent last month compared to the same period in 2019. 

Furthermore, there were also some good indicators from the British Retail Consortium. According to a BRC survey, spending in shops increased by 6.4 percent in July compared to a year earlier. Nevertheless, BRC Chief Executive Helen Dickinson said sales were beginning to slow. However, online sales remain strong. Barclaycard also reported a decline in spending at bricks-and-mortar retailers. For more information, please see RTE. 

AUTO

NISSAN FACTORY TEMPORARILY CLOSES

Nissan announced that it will be temporarily closing its Smyrna, Tennessee plant. The closure is due to the global chip shortage. Beginning on Monday, 16 August, the plant will close for two weeks. The Nissan factory covers over 6 million square feet and employs over 6,700 workers. As a result, this shutdown will be one of the largest shutdowns of a US auto plant of its size. Nissan stated that the chip shortage was due to a COVID-19 outbreak at its semiconductor factory in Malaysia. Additionally, General Motors had to shut down three of its factories this week due to similar issues. 

Moreover, analysts caution that the chip shortage experienced globally could continue into 2022 or later. The Smyrna factory produces six Nissan vehicles, including its top-selling US vehicle, the Rogue. The plant will resume production on August 30. For more details, please see AP News.

Retail 

JOHN LEWIS TO OPEN NEW WAREHOUSE TO MEET ONLINE DEMAND

As a result of surging e-commerce demand, UK retailer John Lewis has announced that it plans to open a new 1 million square foot warehouse in Milton Keynes. The new facility will employ approximately 500 people and will be John Lewis’s second biggest distribution center after the nearby Magna Park.

Furthermore, the retailer has signed a three-year lease on a 300,000 square foot distribution center in Bardon, Leicestershire. This facility will handle the busy Black Friday discount period in late November. The investments come as online orders at the group have grown to 60 percent of overall sales, up from 40 percent before the COVID-19 pandemic. For more details, please see The Guardian.  

AMAZON EXPANDS IN FLORIDA

On Wednesday, Amazon announced that it will add six new facilities in Florida. The expansion will include one robotics fulfillment center as well as five delivery stations. The new facilities will create over 2,000 full-time jobs. Completed in late 2022, the fulfillment center will have 630,000 square feet of space. The five delivery stations will support Amazon’s last mile delivery operations. For more information, please click here.

Carriers 

USPS RELEASES PROPOSED SURCHARGES

The United States Postal Service has released its proposed delivery surcharges for the holiday season. This is the second consecutive year that it has added surcharges to peak delivery times. Nevertheless, before the surcharges can take effect, they must be approved by an independent agency, the Postal Regulatory Commission. 

The surcharges will begin on October 3 and continue until December 26. This means that the beginning of the peak season surcharges is two weeks earlier than in 2020. Surcharges for Priority Mail Express, Priority Mail and Parcel Select services range from $1-$5 per piece depending on the weight and distance traveled. The surcharges will affect retail and commercial customers, but not international shipments. For more details, please visit Freight Waves.

QAD Precision News

3 MINUTE EXPLAINER: EXPORT MANAGEMENT

The trade in physical goods is one of the cornerstones of the global economy. Everyday countless items travel make their way from Point A to Point B. 

Despite our reliance on global trade, items cannot always travel freely. There are many laws governing the movement of goods. This is true for all types of companies and all types of export transactions. Whether you ship raw materials or finished goods, or to consumers or businesses, you must comply with foreign trade regulations.

It is illegal to contravene international trade regulations. Companies that do so can face fines and other penalties. These could be serious, including loss of export privileges and even jail time. In this 3 Minute Explainer, we look at the basics of export management. To read the full report, please click here.