In the QAD Precision News Round-Up: 3 July 2020, Brexit talks
resume and stall; US jobs growth; UK retailers shed jobs; FedEx Q4
results buoyed by e-commerce; DHL tests lower emissions flight; plus
how Covid-19 and e-commerce impact B2B shipping and more.
On Monday, face-to-face talks between EU and UK negotiators resumed
in Brussels for the first time since the coronavirus outbreak began.
The first round of talks initially began on March 2, before the
pandemic. Talks continued online via videolink, with a number of
negotiating rounds shortened. As a result, both sides agreed to ramp
up negotiations throughout July in an attempt to overcome a number of
stumbling blocks. Despite this, on Thursday the latest round of
negotiations ended prematurely. Officials from both sides noted that
they had made little progress and that serious disagreements remain.
For more information, please see here
In June, US employers added 4.8 millions jobs and the unemployment
rate decreased to 11.1 percent.. This marks the second consecutive
month of growth in the US jobs market since the coronavirus crisis.
However, there were 15 million fewer jobs in June compared to February
before the pandemic hit. Although this is welcome news, economists
fear that a surge in coronavirus cases across parts of the country
could result in future layoffs. In certain states, restaurants, bars
and other retailers have had to reclose, making further job losses
possible. For more details, please see The
New York Times.
On Wednesday, the UK retail sector shed approximately 6,000 UK jobs
in one day, as a result of the negative impact of the coronavirus
pandemic on the UK high street. The latest retail job cuts range from
Harrods to Philip Green’s Arcadia Group, and brings the total job
losses in the UK retail sector to over 10,000 this week. In addition,
department store operator John Lewis announced that some of its
stores would remain permanently shut. The UK retail sector has
experienced serious challenges in recent years. However, according to
new data collected, the number of shops that have collapsed into
administration in the first half of 2020 is more than in all of 2019.
The UK’s Centre for Retail Research stated that 2,123 stores,
employing 49,200 staff, fell into administration between January and
June this year. For more details, please see The Guardian.
This week, FedEx shares spiked 9.4 percent after it announced its
fourth-quarter results. During this quarter, which ended on May 31,
FedEx performed better than expected due to e-commerce growth. The
carrier is also now targeting market share from freight forwarders.
FedEx chief marketing and communications officer, Brie Carere, said
that growth in e-commerce sales from the carrier’s large customers
drove volumes in Q4. Residential volumes were at 72 percent, up from
56 percent a year ago. As a result, FedEx Ground, which handles most
of the company’s e-commerce home deliveries, reported a 20 percent
increase in revenue for Q4. For more information, please see The
Loadstar and CNBC.
On July 1, DHL Express carried out a demonstration flight from the
DHL hub in Leipzig to JFK International Airport in New York. The
purpose of the test was to show how changes to flight procedures could
result in lower fuel consumption, thus generating fewer CO2 emissions.
DHL’s operating airline, European Air Transport GmbH, identified over
50 factors that reduce fuel consumption and CO2 emissions. These
include engine washing before the flight, route optimisation, and
optimized take off and descent procedures. This test was made possible
due to the fact that airspace is less crowded as a result of the
coronavirus pandemic. For more details, please see Post
The UK government is contemplating a tax on last-mile consumer
deliveries in an attempt to address the increase in road traffic due
to the rise in e-commerce. The Department for Transport’s scientific
advisory committee have released a position paper outlining a number
of different methods and technologies that could streamline last-mile
deliveries, including a mandatory delivery charge as a possibility.
The paper argues that a delivery charge could reduce the likelihood of
consumers over-ordering online. For more information, please see The Loadstar.
In the US, Apple has decided to reclose 30 additional retail stores,
bringing the total number of store reclosures to 77. The move comes as
coronavirus cases spike around the country. On Thursday, stores in
Alabama, California, Georgia, Idaho, Louisiana, Nevada and Oklahoma
closed, while stores in Florida, Mississippi, Texas and Utah shut on
Wednesday. Apple currently has 271 stores in the US, usually located
in high traffic malls and shopping centers. For more information,
please see CNBC.
The impact of e-commerce on a broad variety of industries has only
been accelerated by Covid-19. Even before the current pandemic,
manufacturers across a variety of industries had begun to respond to
the pressures of e-commerce — particularly the need for ever faster
delivery times — by reconfiguring their distribution models.
While delivery times slipped due to unprecedented levels of consumer
demand during the pandemic, shoppers by and large expect timely
delivery of their online orders. Granted, many will understand that
one-day shipping may not be currently available, it is unlikely that
customers will continue to accept long turnaround times for delivery
once the crisis has passed. In this QAD Precision Report we look at
how the current crisis is accelerating the disruptive influence of
e-commerce, and how manufacturers can respond. Read the full report here.
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