QAD Precision News Round-Up: 3 December 2021

In the QAD Precision News Round-Up: 3 December 2021, US to keep UK steel and aluminum tariffs; direct Ireland/EU trade volumes double; air cargo volumes down; Gap to lose $650M in sales; Cyber Monday sales down; plus FTZ savings for manufacturers and more.

Global Trade

US TO DELAYS UK TRADE DEAL TO REMOVE STEEL TARIFFS

On Wednesday, the United States announced that it will postpone removing tariffs on UK steel and aluminum. The move comes amid concerns about post-Brexit trade rules affecting Northern Ireland. Previously, in 2018, the administration of former US President Donald Trump imposed 25 percent and 10 percent tariffs on steel and aluminum imports from the European Union. However, although removed in October 2021, the tariffs still remain in place for the UK due to Brexit.  

According to a US Commerce Department official, there are concerns about British threats to trigger emergency clause Article 16. Article 16 enables the UK or EU to seek to suspend parts of the Brexit agreement that established some checks on the movement of goods to Northern Ireland from mainland Britain if they produce difficulties. For more information, please click here.

Logistics

GOODS SHIPPED FROM IRELAND TO EU UP 50%

According to official data, volumes of goods shipped directly from Ireland to the EU in the last six months have surged by 50 percent as exporters look to avoid travelling across land through Great Britain. 

The Irish Maritime Development Office (IMDO) released data showing a major reduction in traffic on traditional routes between Dublin and Britain. Instead, this traffic is being diverted to some of 32 new ferry services direct to ports including Le Havre, Cherbourg and Dunkirk in France and Zeebrugge in Belgium. 

Furthermore, the IMDO report revealed freight volumes from Dublin port to Liverpool and Holyhead in Anglesey dropped 19 percent in the first three-quarters of 2021 compared to last year. Additionally, volumes were down by 30 percent on the two routes from the Irish port of Rosslare to the Welsh ports of Pembroke and Fishguard. For more details, please see The Guardian.   

AIR CARGO VOLUMES DOWN

Air cargo volumes for November fell 1.2 percent compared to October according to analytics firm Clive Data Services. In addition, the November volume is also down 3 percent compared to November 2019. Despite the fact that capacity remained flat on a monthly basis, the average spot rate increased 8 percent. Compared to two years ago, rates are up 160 percent. Furthermore, the increase is five to seven times higher on routes to North America from China and Vietnam. November is typically the busiest month for transactions and tonnage and the drop highlights the supply chain issues facing the transportation industry. For more information, please click here.

Retail 

GAP EXPECTS $650 MILLION LOSS IN SALES

Due to supply chain issues in the third quarter, Gap Inc.’s yearly sales expectations decreased. This year, it expects to lose up to $650 million in sales due to constraints on its supply chain and inventory. The expected sales loss is despite the company spending $450 million in air freight expenses in an attempt to avoid shipping delays.

According to Gap, major product delays in the third quarter from port congestion and factory closures, contributed to a decline in net sales of approximately 1.3 percent from 2020. For more information, please click here. 

CYBER MONDAY SALES DOWN

Cyber Monday sales are down for 2021 with consumer spending 1.4 percent lower than last year according to Adobe Analytics. Consumers in the US spent $10.7 billion on Cyber Monday. This is the first decrease in consumer spending on a major shopping day since Adobe Analytics began reporting in 2012. Nonetheless, it predicts this year will still break records as consumers spread their spending over more days. 

Consumer spending from November 1 through Cyber Monday is up 11.9 percent year over year for a total of $109.8 billion spent online. On 22 of the days, consumers bought more than $3 billion worth of goods setting another record for this year. However, Adobe Analytics predicts this year will continue to break records with sales from November 1 to December 31 totalling $207 billion, a 10 percent gain from last year. For more information, please visit CNBC.

Economy

PRIVATE SECTOR HIRING UP IN US

Private hiring for November is increasing according to ADP, a payroll processing company. Private hiring for November is 534,000, surpassing a  Dow Jones estimate of 506,000. This is a decrease from October with 570,000 positions. The services sector added the most jobs with 424,000 positions. Professional and business services followed with 110,000 jobs. 

However, these figures are lower than those from the Bureau of Labor Statistics, which show a growth of 573,000 jobs in November. Furthermore, the Dow Jones estimates the unemployment rate for November to be 4.5 percent. For more information, please visit CNBC. 

QAD Precision News 

ASSEMBLING SAVINGS WITH FTZS: KEY BENEFITS FOR MANUFACTURERS

Global supply chains are facing the greatest strains seen in recent history. Shipping containers are grinding busy ports to a standstill, while consumer demand has resulted in higher prices and spiking product shortages. A report from Moody’s in mid-October assessed the current situation, stating that “things are likely to get worse before they get better.” Experts believe that supply chain issues will continue well into 2022.

There has been some relief in US port congestion in November. Some experts reckon the worst of the crisis has passed, but warn that a number of issues remain. Many manufacturing businesses have borne the brunt of these issues. Shortages of goods critical key parts (such as microchips for vehicles) have hampered supply lines even further, many of which were strained prior to the pandemic. In this QAD Precision Report, we outline how Foreign-Trade Zones can help, delivering three key benefits to the bottom line. To read the full report please click here. 

QAD PRECISION LAUNCHES COMPLIMENTARY FOREIGN-TRADE ZONE COST/BENEFIT ANALYSIS

SANTA BARBARA, Calif.--(BUSINESS WIRE)--QAD Precision, an industry-leading provider of global trade and transportation execution solutions, today announced a complimentary Foreign-Trade Zone (FTZ) Cost/Benefit Analysis. This analysis calculates the cost savings manufacturers and distributors could realize by leveraging the Foreign-Trade Zones program. QAD Precision is a division of QAD Inc. For more details, please see Business Wire. 

6 REASONS YOU SHOULD CONTROL INBOUND LOGISTICS

If the pandemic has taught us anything it’s this—supply chains are brittle. If raw materials or parts don’t get to where they need to be on time, manufacturing plants grind to a halt, orders are not fulfilled, customers are unhappy, and the bottom line suffers. In this article for Inbound Logistics, QAD Precision’s Anne Sexton discusses the benefits of controlling inbound logistics. For more details, please see Inbound Logistics.