QAD Precision News Round-Up: 17 December 2021 

In the QAD Precision News Round-Up: 17 December 2021, South Korea wants to join CPTPP; UK delays post-Brexit checks on Irish goods; UK and Australia announce trade deal; UK retail sales up; plus foreign-trade zones for pharma and more. 

Global Trade 

SOUTH KOREA TO APPLY FOR CPTPP TRADE DEAL

South Korea’s Finance Minister Hong Nam-ki has announced that the country will start the process for joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The South Korean government will submit the application to join the trade deal. However, to join the CPTPP, an applicant must receive approval from all existing members. 

In September, both China and Taiwan applied for CPTPP membership, while the United Kingdom submitted an application in February. For more information, please see The Japan Times. 

UK DELAYS POST-BREXIT CHECKS ON IRISH GOODS

The British government has announced that it will postpone the additional post-Brexit checks on Irish exports to the UK that were due to kick in on January 1st, 2022. The checks would have included significant additional requirements and would have affected food and drinks exports in particular. 

When the UK left the EU, the UK delayed the implementation of some checks. As a result, British importers of goods from the EU were able to postpone making advance customs declarations and paying the relevant tariffs. These checks are set to come into force in January. However, the checks on Irish goods are being postponed while talks on the Northern Ireland protocol continue between the EU and UK. For more details, please click here.

AUSTRALIA AND UK ANNOUNCE TRADE DEAL 

On Friday morning, the UK and Australia announced that they signed a free trade deal. The two sides had been in negotiations over issues such as market access for farm goods since the two countries agreed the outline of the deal in June 2021. The trade agreement will reduce tariffs on products including Scotch whisky, clothing and cars. Furthermore, it will cut levies on agricultural products. According to official analysis in 2020, the deal should boost UK GDP by 0.02 percent over the next 15 years. 

The deal also eliminates tariffs on 99 percent of Australian exports to the UK. Furthermore, under the agreement, Australian nationals will have easier access to working and living in the UK. For more information, please see Bloomberg and the BBC.

Logistics

PARCEL MONITOR DATA HIGHLIGHTS POPULAR DELIVERY METHODS WORLDWIDE

Parcel Monitor has revealed data highlighting preferred delivery methods across the world as e-commerce and B2C delivery demand grew during the pandemic. Perhaps unsurprisingly, home delivery was the favored delivery option across most regions. However, out-of-home (OOH) delivery methods are gaining in popularity. In the third quarter of this year, 13.4 percent of parcels deliveries in Oceania used OOH methods.

Worldwide, the most popular OOH delivery method was collection points. Consumers in Asia were most likely to pick-up their parcel from a post office while parcel lockers were the most popular in Europe among all regions. For more details, please click here.  

Carriers 

DHL ORDERS 100 SELF-DRIVING TRUCKS

DHL Supply Chain has made a US order for 100 self-driving trucks. The trucks, manufactured by Navistar and equipped with TuSumple’s self-driving technology, should be delivered between 2024 and 2025. Earlier this month, DHL and TuSimple partnered to transport daily hauls between Dallas and San Antonio, Texas. At present, the hauls are operated by trucks owned by TuSimple. 

The carrier is also partnering with other suppliers of self-driving technology. In October, DHL ordered 100 trucks from Embark Trucks Inc. It is also considering other vendors. For more information, please see Reuters. 

Retail 

UK RETAIL SALES JUMPS IN NOVEMBER 

In November, UK retail sales jumped due to Black Friday and shoppers making early Christmas purchases. According to the Office for National Statistics (ONS), retail sales volumes grew by 1.4 percent in November, an increase on October’s growth of 0.8 percent. The result was 0.6 percent higher than analysts had forecast. Non-food stores sales volumes expanded by 2 percent in the period driven by increases in clothing stores and other non-food retail. In addition, the value of online spending grew by 0.1 percent last month. Conversely, the proportion of online sales declined to 26.9 percent from 27.3 percent in October. For more details, please see Retail Gazette.  

QAD Precision News

FOREIGN-TRADE ZONES FOR PHARMA: A PRESCRIPTION FOR SAVINGS

Pharmaceutical companies and their contract manufacturers are flocking to foreign-trade zones (FTZs) to lower costs, speed delivery, and improve regulatory compliance. 

Foreign-trade zones were first established in 1934, but were not significantly utilized by US-based manufacturers until the 1980s. 

In 1995, the US-tariff structure was changed. These changes created an “inverted” tariff-rate relationship between imported raw materials and finished pharmaceutical products. Many raw materials used to produce pharmaceutical products carry a higher duty rate than the finished products. As a result, US-based pharmaceutical manufacturers not using an FTZ are inadvertently penalized by this inverted tariff structure. In this QAD Precision Report we look at the benefits of foreign-trade zones for pharmaceutical companies. Read the full report here.