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.
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
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.
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.
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
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
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.
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
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.