In the QAD Precision News Round-Up: 2 April 2021, US threatens
tariffs over UK digital tax; China factory activity grows; Eurozone
inflation jumps; DPD had a strong 2020; US car sales are up; plus
the importance of integrated supply chain operations and more.
The US has warned that it could place tariffs of 25 percent on UK
exports. The move is in response to the UK imposing a digital services
tax on major technology companies. According to a list published by US
officials, the price of clothing and footwear, ceramics, beauty
products and furniture exports from the UK could increase by 25
percent. The levies should raise $325 million, equal to the amount
Britain can expect to raise from taxing the UK sales of US tech
companies. The digital services tax, which went into effect last
April, levies a 2 percent charge on revenues of search engines, social
media services and online marketplaces. For more information, please
In March, China’s manufacturing activity grew at the fastest pace in
three months as factories increased production. On Wednesday, data
from the National Bureau of Statistics (NBS) showed that the official
manufacturing Purchasing Managers Index (PMI) rose to 51.9 from 50.6
in February. For the 13th consecutive month, this result is above the
50 mark separating growth from contraction. In addition, the official
PMI showed both the sub-indexes for production and new orders were at
the highest level since December. Furthermore, export orders also grew
due to increased foreign demand. For more information, please see CNBC.
In March, inflation in the Eurozone surged to 1.3 percent from 0.9
percent the month previous. This suggests consumer price growth may
exceed the European Central Bank (ECB) 2 percent target later this
year. A flash estimate from Eurostat, the European Union's statistics
office, showed the result was in line with analysts’ forecasts.
Inflation increased on higher energy and non-processed food prices.
However, non-energy industrial goods inflation declined sharply. The
ECB said following the predicted surge, inflation will then fall
beneath its target in the coming years. For more information, please
DPD Group has announced strong 2020 results during the coronavirus
pandemic. The carrier posted a 42 percent increase in revenue growth
year-over-year. DPD’s revenue increased to €11 billion and it
delivered 1.9 billion parcels worldwide — approximately 7.5 million
parcels a day. This was an increase of approximately 500 million
compared to 2019. In addition, over 55 percent of the parcels
delivered worldwide were B2C. This was a 57 percent increase on the
year previous. According to DPD, the pandemic accelerated a number of
trends, including urban logistics demand and sustainability.
Furthermore, specific delivery categories such as food and healthcare
experienced unprecedented demand. For more information, please see Post
In a study released on Tuesday, DHL Express has forecasted that the
global market for business-to-business e-commerce will expand by over
70 percent to $20.9 trillion by 2027. Last year, DHL’s revenue
increased by nearly 12 percent to €19.1 billion ($22.41 billion).
Companies and consumers shifted to e-commerce during the pandemic — a
trend, DHL believes, will remain post-pandemic. According to DHL,
another reason for the growing demand in B2B transactions is the
millennial generation. Millennials account for 73 percent of all B2B
purchasing decisions. DHL predicts that 80 percent of all transactions
between suppliers and business customers will take place on purchasing
platforms and other digital channels by 2025. For more details, please
In Q1, automakers are reporting strong vehicle sales. There has been
strong consumer demand despite an ongoing semiconductor chip shortage.
Analysts predicted that sales would increase by approximately 8 or 9
percent compared to the first quarter last year. However, many
automakers are exceeding those forecasts. Automakers that are less
dependent on fleet sales to corporate and government clients in the US
had stronger sales in Q1. Detroit automakers saw single-digit
improvements in sales compared to the first quarter of 2020. For more
information, please see CNBC.
Global trade has experienced a series of unexpected challenges in the
last twelve months. The Covid-19 crisis caused a deep slump in trade
volumes, particularly in the second quarter of the year. The World
Trade Organization’s Goods Trade Barometer, published this February,
found that trade rebounded in the third quarter. World merchandise
trade volumes growth was due to increased exports from Asia and rising
imports in both Europe and North America.
Trade volumes remained strong in the fourth quarter. However, the WTO
is pessimistic that expansion will continue during the first half of 2021.
The pandemic has also caused a global
shortage of semiconductors. As the crisis took hold, factories
shut down, creating shortages. Although production has resumed, the
pandemic also created demand for electronic devices. Consumers sought
new TVs, computers, 5G-enabled mobile phones and games consoles — all
of which use semiconductors.
In this QAD Precision Report we look at the current state of global
trade and how an integrated supply chain helps businesses meet
tomorrow’s challenges. To read the full report, please click here.