In the QAD Precision News Round-Up: 14 May 2021, firms in UK
freeports may face tariffs to 23 countries; US consumer prices up;
UK economy strongly rebounds; computer chip shortage could last 2
years; Burberry sales recover; plus foreign-trade zones and more.
FIRMS IN UK FREEPORTS MAY FACE TARIFFS TO 23 COUNTRIES
The UK government has said that businesses in freeports will not be
able to leverage all the benefits of the new tax efficient zones if
they export to certain nations. Post-Brexit trade agreements with 23
countries, including Canada, Norway and Switzerland, included clauses
that prohibit manufacturers in freeport-type zones from benefiting
from tax breaks, according to officials.
Aiming to improve global trade and the local economy, freeports are
areas designated to receive incentives relating to customs, tax,
planning, regeneration and infrastructure. However, companies
operating in freeports will be subject to tariffs when exporting
finished goods to any of the 23 countries where the UK has a
post-Brexit trade agreement. For more details, please click here.
US CONSUMER PRICES JUMP IN APRIL
In April, consumer prices in the US increased by the most in almost
12 years, beating estimates. On Wednesday, Labor Department data said
excluding the volatile food and energy components, the CPI climbed 0.9
percent from March, the biggest gain since 1982. The report showed
increases in prices for cars, airplane tickets and hotel stays. The
annual CPI jumped to 4.2 percent, the most since 2008. For more
information, please see Bloomberg.
UK ECONOMY REBOUNDS MORE THAN EXPECTED IN MARCH
In March, the UK economy performed stronger than expected according
to official data on Wednesday. Compared to the month previous, the
economy grew 2.1 percent in March, led by the reopening of schools.
This is better than predicted. Analysts polled by Reuters had
forecasted monthly growth of 1.3 percent.
In the first quarter of 2021, UK gross domestic product (GDP)
contracted by 1.5 percent according to the Office for National
Statistics. However, the Bank of England forecast the UK economy to
grow 7.25 percent in 2021. Last year, the country's GDP collapsed by
9.8 percent — the largest fall in three hundred years. For more
information, please click here.
BURBERRY SALES BEGIN TO RECOVER
On Thursday, Luxury retail brand Burberry said its annual sales to
March 27 declined 10 percent due to stores closures and reduced
tourism during the coronavirus pandemic. However, the company said
comparable store sales in the fourth quarter grew 32 percent
year-on-year. That is despite the fact that 16 percent of its stores
remain shut. Furthermore, full-price sales increased 63 percent in the
quarter. This was as a result of strong demand in mainland China,
Korea and the US.
Burberry reported an adjusted operating profit of £396 million,
higher than the average forecast by analysts of £378 million. This
result is 8 percent less than the £433 million made in 2019-20. For
more details, please click here.
ROYAL MAIL BEGINS DRONE DELIVERIES TO SCILLIES
This week, Royal Mail announced a pilot of autonomous drone flights
between the UK mainland and the Scilly Isles. These will be
out-of-sight flights. The company will use Uncrewed Aerial Vehicle
(UAV) flights in the trial. The flight route includes 70-miles out of
sight before reaching its destination. The drone flights will
transport personal protective equipment (PPE), Covid testing kits and
other mail to the Isles of Scilly. Royal Mail will deliver parcels to
the islands' airport. In addition, a smaller VTO drone will transfer
the packages to a number of delivery points throughout the islands.
For more details, click here.
GLOBAL CHIPS SHORTAGE COULD LAST TWO YEARS
The shortage of computer chips that is impacting industries around
the globe could last another two years. That’s according to IBM's
president, Jim Whitehurst. On Friday, Mr. Whitehurst said the tech
industry was struggling with production capacity as the world economy
reopens. Last year, a number of factories shut due to the pandemic. As
a result, there is a production backlog. Furthermore, this shortage is
being compounded by demand for chips.
The global car industry has been one of the sectors worst affected by
the shortage. Forecasts estimate that the automotive industry will
lose $110 billion this year as a result. Ford said it has reduced
vehicle production by 50 percent through to June this year due to the
shortage. For more information, please see The
QAD Precision News
3 MINUTE EXPLAINER: ALL ABOUT FOREIGN-TRADE ZONES (FTZS)
The United States Foreign-Trade Zones (FTZ) program was created in
1934 as a way to counteract the Smoot-Hawley Tariffs of 1930. This was
a protectionist trade policy that raised tariffs on thousands of imports.
The FTZ program has expanded in recent decades to meet the needs of
the rapidly growing global trade environment.
A Foreign-Trade Zone is a specifically designated, secure area that
is considered outside of US Customs territory. FTZs are similar to its
global counterparts, Free Trade Zones. FTZs are located in, or near,
US Customs Ports of Entry. There are FTZs in all 50 states and Puerto Rico.
Foreign-Trade Zones enable companies to reduce import duties and
taxes, as well as simplify import procedures. In this 3 Minute
Explainer, we look at the who, what, when, where and why of FTZs. To
read the full report, please click here.
[LIVE WEBINAR] LESSONS LEARNED: TURNING IMPORT CLASSIFICATION INTO A
Please join us for this 30-minute live webinar where QAD Precision’s
VP of Product Strategy Jerry Peck will discuss a number of lessons
learned from his time in the industry. Most importantly, he will
discuss how classification can be used as a competitive advantage.
Topics discussed include:
Why is Classification so important?
How savvy trade-dependent companies are leveraging the
When and where to best implement product Classification in your operation
How enabling technology is supporting the Classification process
If you can't join us at this time, feel free to register and we will
send you the on-demand recording. Register here!