QAD Precision News Round-Up: 14 August 2020

In the QAD Precision News Round-up: 14 August 2020, majority in US not in favor of Canada tariffs; US may impose more European tariffs; UK enters recession, but high street sales improve; UPS announces peak season surcharges; carrier volumes surge; plus US export management and more. 

Global Trade

CANADA TARIFFS UNPOPULAR IN US

The recent imposition of a 10 percent tariff on Canadian aluminum is proving to be unpopular in the US. Polling firm Leger and the Association for Canadian Studies found that 58 percent of US respondents disagreed with the tariff. Unsurprisingly, 90 percent of Canadians objected to the new tariff.

Last week, Ottawa announced a C$3.6bn ($2.7bn) tariff on US aluminium products in retaliation to the tariff. Canada’s Innovation Minister Navdeep Bains called the tariffs “bad economics.” Mr Bains noted that North American supply chains are tightly integrated. He claimed that the move will hurt both nation’s economies. For more, please click here and here.

US CONSIDERS NEW EUROPEAN TARIFFS

US Trade Representative Robert Lighthizer may impose new tariffs on European goods, such as British gin and German beer. The move is the latest salvo in the 15-year World Trade Organization ruling over illegal EU subsidies to Airbus. 

Fresh tariffs are likely to raise objections from US retailers, restaurants and importers. These groups argue that existing tariffs on European wines and spirits have hampered their businesses. Furthermore, the hospitality industry is already in crisis due to the coronavirus pandemic. The US Trade Representative seems likely to push ahead. Mr Lighthizer also has the backing of US President Donald Trump. For more details on this news item, please see Bloomberg.

UK OFFICIALLY IN RECESSION

The UK is now officially in recession. The economy suffered its largest downturn on record between April and June as a result of lockdown measures in response to Covid-19. The economy slumped 20.4 percent over this time period, compared to January through March. This is the first time the UK has entered a recession since 2009. On a more hopeful note, the Office for National Statistics (ONS) said the economy recovered in June as restrictions loosened. The UK economy grew 8.7 percent in June, compared with just 1.8 percent in May. You can read more about this here.

Retail

UK RETAIL SALES IMPROVE

Despite the UK officially entering a recession, there was good news in the retail sector as sales rose again in July. Consumers are still wary of visiting physical stores however, and the number of visits to the high street is lower than usual. The British Retail Consortium found that sales rose for the second month in  a row this July. Sales were up 3.2 percent compared to July 2019. Food, furniture and homeware sales performed strongly. Online shopping accounted for 40 percent of all sales. You will find more information about this at the BBC.

Carriers

ADVENT INTERNATIONAL ACQUIRES STAKE IN HERMES UK AND GERMANY

Advent International is to acquire a 75 percent share in Hermes UK and a 25 percent stakeholding in Hermes Germany. The deal was reached between the private equity investor and the Otto Group. In a statement the Otto Group said that this will open up new opportunities for the carrier, allowing Hermes UK and Hermes Germany to expand in these important parcel delivery markets. This year, Hermes in both the UK and Germany recorded high volume growth as consumers responded to the pandemic with increased online shopping. You can read more about this here.

UPS ANNOUNCES PEAK SEASON SURCHARGES

UPS has announced peak season surcharges for large volume parcel shippers. Companies shipping 25,000 packages a week will face surcharges between $1 to $4. The difference in cost depends on whether shippers use ground or air services. The surcharges come into force on 15 November 2020, and will apply until 16 January 2021. For more information, please click here.

AMAZON AND CARRIER VOLUMES SURGE IN JULY

E-commerce behemoth Amazon is now delivering the majority of its own packages in the US. According to ShipMatrix, the e-commerce retailer shipped 415 million packages in July, compared to an average of 389 million packages a month between April and June. The company also delivered 66 percent of these packages itself. That’s compared to 61 percent across April, May and June. 

Although Amazon is taking responsibility for delivering a greater number of its own packages, UPS and FedEx saw huge volume boosts in July too. In July, UPS volumes grew 26 percent. In the months April through June, the carrier averaged a 23 percent growth. Similarly, FedEx volumes surged 22 percent in July, compared to an average of 19 percent during the previous 3 months. For more details, please click here.

QAD Precision News

EXPORT MANAGEMENT AND AES FILING FOR US EXPORTERS

The US Customs and Border Protection is responsible for customs, including cargo screening. Companies must report their imports and exports to CBP. They do this via the Automated Commercial Environment (ACE) portal on the CBP website.

In the US, an electronic export declaration is filed using the Automated Export System (AES). Users log on to the ACE portal and then enter all the shipment information on to AESDirect.

AES is a central collection point for key export data. It has replaced  paper-bound processes. AES was designed to simplify compliance with export laws and regulations. US export management is no easy task. In this QAD Precision Report we discuss the importance of correctly filing export declarations with AES. To read the full report, please click here.