QAD Precision News Round-Up: 3 July 2020

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. 

Global Trade

FACE-TO-FACE BREXIT TALKS RESUME… THEN DON’T

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 and here.

Jobs Market

US EMPLOYMENT RATE IMPROVES FOR SECOND CONSECUTIVE MONTH 

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.

6,000 UK RETAIL JOBS LOST ON WEDNESDAY

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. 

Carriers

FEDEX Q4 RESULTS BUOYED BY ECOMMERCE GROWTH

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.

DHL EXPRESS CARRIES OUT REDUCED EMISSIONS FLIGHT TEST

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 and Parcel. 

Retail 

UK CONSIDERS E-COMMERCE DELIVERY CHARGES

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.

APPLE TO RECLOSE 30 US RETAIL STORES AMID COVID-19 SURGE

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. 

QAD Precision News

ALL CHANGED, CHANGED UTTERLY: E-COMMERCE, COVID-19 AND B2B SHIPPING

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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