QAD Precision News Round-Up: 20 August 2021

In the QAD Precision News Round-Up: 20 August 2021, inflation slows in the UK; WTO reports trade levels are up; Japan’s economy rebounds more than expected; Target reports high earnings; FedEx announces peak surcharges; FTZ Q&A with expert Greg Jones and more. 

Global Trade

EXPORTS FROM IRELAND TO GREAT BRITAIN SOAR

According to Irish government officials, exports from Ireland to Great Britain increased in the first six months post-Brexit. Imports from Great Britain to Ireland declined during the same period. The Irish Central Statistics Office said exports to Great Britain, excluding Northern Ireland, rose by 20 percent in the first half of 2021. This totaled €6.7 billion, an increase of €1.1 billion compared to 2020. 

Conversely, imports from Great Britain decreased by 32 percent, a fall of €2.5 billion, to  €5.3 billion. Furthermore, exports from Great Britain also decreased by 16 percent in June compared to June 2020. The goods most impacted include food, live animals and manufactured goods. British exporters face additional border checks on goods going to the EU, while Irish and EU exporters opted for a phased approach to Brexit restrictions. For more details on this news article, please see The Guardian.

INFLATION IN THE UK SLOWS 

In July, UK inflation declined to the Bank of England’s target of two percent following a slowdown in the economy. Economists polled by Reuters had predicted a 2.3 percent increase in consumer prices last month after a 2.5 percent rise in June. The UK’s Office for National Statistics said the prices of clothing, footwear, computers, games and toys slumped on the rate of price growth in July. 

Furthermore, the data showed that second-hand cars were a big driver of inflation last month. A shortage of semiconductors and other goods such as motor vehicles as well as global shipping problems have contributed to rising inflation in many countries. In August, the Bank of England said it expected inflation to reach 4 percent around the end of the year.  For more information, please see Reuters.  

WTO REPORTS TRADE LEVELS UP

The World Trade Organization (WTO) reports that trade levels rose to 110.4 in March. This is the highest level since 2016. The organization says that although the index is above average, the gains are quickly decreasing. Nonetheless, the WTO cautions this could be a “peaking of upward momentum in trade.” The WTO forecasts an 8 percent increase in world merchandise trade volume in 2021. This is up from a 5.3 percent decrease in 2020. Furthermore, the WTO warns that COVID-19 still poses a threat to the global trade outlook for 2021. For more details, please see Bloomberg.

JAPAN'S ECONOMY RECOVERS BY MORE THAN EXPECTED 

On Monday, data showed Japan’s economy recovered by more than expected in the second quarter of the year. From April to June, Japan's economy grew at an annualised 1.3 percent following a 3.7 percent slump in the first quarter. The rebound beat forecasts for growth of 0.7 percent. 

According to the data, consumption increased 0.8 percent in April — June from Q1. This surpassed expectations of a 0.1 percent drop. Japan experienced a 1 percent decline in the months January to March. Despite this, Japan’s economic growth is weaker than that of other countries, including the United States. In the second quarter, the US economy expanded by 6.5 percent. For more details, please click here. 

Carriers 

FEDEX ANNOUNCES PEAK SURCHARGES 

This week, FedEx announced that its peak surcharges will extend into 2022. Beginning October 4 through to January 16, 2022 the carrier will penalize shippers for oversized packages, packages that require additional handling, and parcels unauthorized for the FedEx Ground network. In addition, FedEx will impose per-package surcharges for Ground Economy shipments. These surcharges will be in place from November 29 until December 12 and peak at $3. 

Furthermore, FedEx will charge customers shipping over 25,000 packages on average per week for residential packages shipped between November 1 and January 16, 2022. The number of additional packages the customer ships compared to volumes they sent in February 2020 determines this year’s surcharge rate. For more details, please click here.  

Retail

TARGET REPORTS HIGH EARNINGS

On Wednesday, Target announced its second quarter sales rose, surpassing earnings estimates. Target reports that sales rose in every merchandise category, including apparel and grocery. This growth exceeds 2020’s record sales from the pandemic e-commerce boom. 

In the fiscal second quarter, ending July 31, Target reported $25.16 billion in revenue and a net income of $1.82 billion. Compared to 2020, revenue rose 9.5 percent, exceeding estimates of $25.08 billion. Target attributes its second quarter success in part to back-to-school shopping. Furthermore, the company is also predicting a strong holiday season, adding $2.5 billion in inventories compared to the previous year. For more information please see CNBC.

QAD Precision News 

FOREIGN-TRADE ZONES: Q&A WITH FTZ EXPERT GREG JONES

Leveraging the US Foreign-Trade Zone (FTZ) program offers many advantages. In the QAD Precision Report we do a Q&A session with FTZ expert Greg Jones. To read the full report, please click here.