QAD Precision News Round-Up: 17 September 2021, UK delays
post-Brexit imports checks; UK inflation surges; US Treasury yields
fall; Toyota reduces production output; Amazon ups starting wages;
plus navigating supply chain peak season disruptions and more.
BRITAIN DELAYS CHECKS ON POST-BREXIT IMPORTS FROM EU
This week, Britain delayed checks on post-Brexit imports from the EU
for the second time. The reason for the delay is to give businesses
more time to rebound from the Covid-19 pandemic before new border
controls are implemented. Export health certificates, which were to
take effect from October 1st, will now begin on July 1st, 2022. In
addition, safety and security declarations and physical checks at
border control posts will begin July 1st next year. They were due to
come into force on January 1st. For more details, please click here.
UK INFLATION SURGES TO 3.2 PERCENT IN AUGUST
In August, the Consumer Prices Index in the UK increased by 3.2
percent, according to official data released on Wednesday. This is the
biggest month-on-month increase since records began in 1997.
Furthermore, it was also greater than a 2.9 percent prediction by a
Reuters poll of analysts. Additionally, in July, the index increased
by 2 percent annually. According to the Office for National
Statistics, the increase, expected to be temporary, may be due to the
UK government’s “Eat Out to Help Out” program introduced last year.
Chief UK economist at Pantheon Macroeconomics, Samuel Tombs, said the
4.9 percent rise in used car prices also added to the core CPI
increase. For more information, please see CNBC.
US TREASURY YIELDS FALL
On Tuesday, the US Treasury yields fell. A key inflation report
showed a less-than-anticipated rise in prices. The 10-year Treasury
note yield benchmark fell 4.7 basis points to 1.277 percent. In
addition, the yield on a 30-year Treasury bond decreased by 5.5 basis
points to 1.849 percent. A basis point is equivalent to 0.01 percent.
Furthermore, in August, the consumer price index showed a 5.3 percent
year-over-year increase. This was slightly below the Dow Jones
estimate of 5.4 percent. The Core CPI rose 0.1 percent month over
month, below estimates of 0.3 percent. The Federal Reserve is closely
monitoring inflation and unemployment rates to judge how much or when
to raise interest rates. For more details, please see CNBC.
TOYOTA REDUCES OUTPUT AMID SEMICONDUCTOR SHORTAGE
This week, Toyota announced it was to lower its annual production
target by 300,000. The new target is a result of reduced output at
parts factories in Vietnam and Malaysia amid rising coronavirus
infections. Additionally, Toyota has also been impacted by the
semiconductor shortage. Until now, Toyota has avoided reducing output
due to stockpiling key components.
Nonetheless, at present, Toyota expects to produce 9 million vehicles
in the year to March 31, compared to the 9.3 million previously
estimated. Furthermore, the company did not amend its 2.5 trillion yen
($22.7 billion) operating profit estimate for the business year. In
August, car sales in China dropped by almost a fifth from a year
earlier due to lower production output. For more information, please
DHL TO INVEST 300 MILLION IN US
DHL eCommerce Solutions announced it will invest more than $300
million in the US in the next five years. DHL is looking to expand its
footprint by adding an additional 70 percent more square footage. The
carrier also plans to upgrade its IT system and add automation to all
its US distribution centers. Additionally, it will be adding dedicated
export gateways in Carteret, New Jersey; Franklin Park, Illinois; and
Whittier, California. DHL eCommerce Solutions has 19 distribution
centers, three US corporate offices, and approximately 4,200
employees. For more details, please click here.
AMAZON INCREASES STARTING WAGE
On Tuesday, Amazon announced that it would be increasing its average
starting wage to $18 an hour. Furthermore, in some locations, Amazon
will pay a sign-on bonus of $3,000 and increase the hourly wage to up
to $22.50. In May, Amazon reported its average hourly rate is $17.
Amazon also revealed its plans to hire an additional 125,000 warehouse
and transportation employees. Amazon is hiring the additional workers
to run its nearly 350 logistics facilities that opened this year.
Amazon also needs the additional staff to assist with its one-day
delivery option. In 2018, Amazon was one of the first retailers to
offer a minimum wage of $15 an hour. For more information, please
QAD Precision News
SUPPLY CHAIN DISRUPTION AND PEAK SEASON SHIPPING
The global supply chain is facing more pressure than ever before.
Over the past year and a half, Covid-19 has caused shipping problems
throughout the world. Today, supply constraints and port congestion
continue to affect shippers globally. This turmoil is resulting in
consumer product shortages, delays and increasing shipping costs for
companies and is particularly alarming as peak season begins.
Shipping costs are continuing to climb for global shippers. According
to data provider Freightos, shipping costs have surged to
approximately $15,800 to transfer a 40-foot container from China to
the US west coast. This is a tenfold increase on levels before the pandemic.
An analysis of shipping, port and manufacturing data at IHS Markit
reveals the delays will extend into 2022. Furthermore, some shipping
executives have a more pessimistic outlook and expect the disruption
to continue into 2023. In this QAD Precision Report we look at how
parcel shippers can mitigate delays and high costs. Please read the
full report here.