In the QAD Precision News Round-Up: 2 July 2021, US-Taiwan trade
talks; power shortage in China; Euro zone factory output expands at
record pace; US jobless claims fall; FedEx reports record Q4; plus
multi carrier shipping software for retailers and more.
US-TAIWAN TRADE TALKS TO FOCUS ON SUPPLY CHAINS AND DIGITAL TRADE
This week, Taiwan and the US began trade talks for the first time
since 2016 as they attempt to deepen economic ties with each other
amid growing tension with China. The two nations will discuss supply
chain security and digital trade as part of the negotiations.
The decision by the US to resume negotiations under the Trade and
Investment Framework Agreement (Tifa) shows a shift from President
Trump’s administration, which prioritised a limited trade deal with
Beijing. Taiwan President Tsai Ing-wen has requested a bilateral trade
deal since the country opened its market to US beef and pork last
week. During the trade talks, the US is likely to focus on
semiconductor supply chain security and digital trade. For more
details, please see Financial
POWER SHORTAGE AFFECTING CHINA
China is facing its worst power shortage since 2011. Extreme weather
and surging demand for energy, coupled with strict limits on coal
usage are the driving factors behind the power shortage. The shortage
could possibly last for months, with some local officials warning it
could last the remainder of the year. The power shortage is currently
affecting an area the size of the UK, Germany, France, and Japan, combined.
The Guangdong province, included in this area, is responsible for
$1.7 trillion — over 10 percent — of China’s annual economic output.
The rationing of power is forcing many companies to shut down
production for a few days per week to reduce energy consumption. The
industries most likely affected by the power shortage are construction
and manufacturing. Last year, these two industries combined drew
almost 70 percent of China’s electricity according to the National
Bureau of Labor Statistics. The power shortage could potentially slow
China’s economic recovery and the global trade industry as a whole.
For more details, please see CNN.
EUROZONE FACTORY OUTPUT EXPANDS AT RECORD PACE
In June, manufacturing activity in the Euro zone expanded at its
fastest pace on record according to a survey released on Thursday. In
addition, the survey showed factories faced the largest rise in raw
material costs in over two decades. IHS Markit's final manufacturing
Purchasing Managers' Index (PMI) grew to 63.4 in June from May's 63.1.
This result was above an initial estimate of 63.1 and is the highest
reading since the survey began. The input prices increased to 88.5
from 87.1, the highest level in the survey’s history, due to a
shortage of shipping containers and supply chains affected by the
coronavirus pandemic. For more information, please see Reuters.
US JOBLESS CLAIMS FALL
Last week, the US jobless claims reached a new pandemic low. On
Thursday, the Labor Department reported that the jobless claims fell
to seasonally adjusted 364,000. Jobless claims, representing layoffs,
are down approximately 50 percent since the first week of April.
Although the claims have fallen recently, they are still above
pre-pandemic levels. This decline should increase over the summer as
the labor market improves and states phase out pandemic-related
benefits. For more details, please see Wall
GAP TO CLOSE UK & IRELAND STORES AND FOCUS ON E-COMMERCE
US retail company GAP announced that it will close all of its stores
in the UK and Ireland by the end of the year as it shifts its focus to
e-commerce. The company will close a total of 81 stores as it becomes
the latest retailer affected by the coronavirus pandemic in the UK. On
Wednesday, Gap said in a statement that they aim to be a “digital
first business” as the adoption of e-commerce by consumers
accelerates. Last year, the UK suffered one of the world's deepest
recessions following strict lockdown measures. This resulted in the
closure of stores across the UK high street including department
chain Debenhams and Arcadia Group. For more details, please click here.
BANGLADESH LOCKDOWN AND THE APPAREL INDUSTRY
On Thursday, Bangladesh entered a seven-day stay-at-home order
prompted by increasing Covid-19 cases in the area. The lockdown will
affect approximately 170 million people. The order is likely to impact
supply chains, especially in the apparel industry. Factories will
likely shut down as employees will need to remain at home.
According to Panjiva, a business line of S&P Global Market
Intelligence, retailers H&M and Levi Strauss are at risk of supply
chain disruptions. In the last three months, ending May 31, H&M
shipments increased 13.5 percent compared to 2019. Imports associated
with Levi Strauss reportedly fell 47.8 percent and those associated
with Calvin-Klein owner PVH fell 68.7 percent. Bangladesh has been
gaining market share in the apparel industry as China moves away from
more labor-intensive industries, according to US International Trade
Commission data. For more details, please visit CNBC.
FEDEX REPORTS RECORD Q4 RESULTS
FedEx has announced record fourth quarter and full year results.
FedEx Express fourth quarter operating income more than doubled
year-over-year as demand for international export and US domestic
package services grew. Additionally, FedEx Ground reported record
earnings and revenue growth of 27 percent for Q4. This growth, driven
by a rise in business-to-business shipments and a 14 percent increase
in revenue per package. Furthermore, FedEx Freight reported record
earnings for the same period and operating margin of 16.1 percent.
Daily shipments increased 30 percent and revenue per shipment saw
growth of 6 percent. For more details, please click here.
QAD Precision News
WHY RETAILERS NEED FLEXIBLE MULTI CARRIER SHIPPING SOFTWARE
The last 15 months or so has been extraordinary for consumers as well
as e-commerce and retail businesses. The pandemic sent parcel volumes
skyrocketing in unprecedented ways. However, when it comes to
e-commerce, the genie is out of the bottle — online shopping will
continue to become an ever greater part of our consumer habits.
In order to survive and thrive, retailers need a way to manage
growing volumes, standardize parcel shipping and leverage flexible,
multi carrier shipping software.
For omnichannel and e-commerce
retailers standardizing customer delivery operations is no easy task.
When you add in different distribution centers, brick-and-mortar
stores and geographic locations, this can seem impossible. In this QAD
Precision Report we look at how retailers can standardize shipping and
contain costs with multi carrier shipping software. Read the full