In the QAD Precision News Round-Up: 30 July 2021, US economy grew
in Q2; China’s industrial profit slows; IMF warns inflation could be
persistent; chip shortage hits smartphone industry; plus multi
carrier shipping software for global enterprises and more.
In the second quarter of this year, the US economy grew solidly as
government aid and Covid-19 vaccinations increased spending on
travel-related services. According to the Commerce Department, gross
domestic product increased at a 6.5 percent annualised rate in Q2. In
the first quarter, the economy increased at a revised rate of 6.3
percent. The government published revisions to GDP data with the
second-quarter estimate. This data showed the economy contracted 3.4
percent last year, instead of 3.5 percent as previously predicted.
However, this was still the largest decline in GDP since 1946. For
more details, please see RTE.
On Tuesday, the International Monetary Fund warned that there is a
risk inflation will be more than transitory. In the US, the consumer
price index (CPI) reached 5.4 percent in June, the fastest pace in
nearly 13 years. In the UK, the inflation rate was 2.5 percent last
month. This was the highest level since August 2018 and above the Bank
of England’s 2 percent target.
On Tuesday, the IMF estimated that inflation in 2022 will return to
levels seen before the pandemic. However, it warned temporary
pressures could become persistent as uncertainty remains high. The IMF
kept its global growth forecast for 2021 at 6 percent but it revised
its predictions for next year. It’s April prediction of a global
domestic product rate increased to 4.9 percent from 4.4 percent. For
more details, please see CNBC.
In June, profit growth at China’s industrial firms slowed for the
fourth consecutive month due to an increase in raw material costs.
Data from the National Bureau of Statistics on Tuesday showed
industrial firms' profits grew 20 percent year-on-year in June to
791.8 billion yuan ($122.27 billion), following a 36.4 percent
increase in May. Although the Chinese economy has largely recovered
from the pandemic, it has faced new challenges in recent months. These
challenges include higher raw material prices and global supply chain
crunches. For more details, please click here.
This year, there has been a global shortage of semiconductors due to
a number of factors including factory closures due to the coronavirus
pandemic and increased demand for consumer electronics. In particular,
the shortage has impacted automakers such as Ford and General Motors
while video game consoles have also felt the effects. Apple and
Samsung stockpiled critical components early in the pandemic and have
largely avoided shortages. However, smartphone manufacturers are now
starting to feel the impact of the global fallout.
Following a sales decline of 12.5 percent in 2020, demand for
smartphones grew 26 percent in the first quarter of 2021, according to
Gartner. Apple CEO Tim Cook said that silicon supply pressures will
impact iPhone sales in addition to other products such as the iPad.
Dale Gai, semiconductor analyst at Counterpoint Research said he
expects the chip shortage to reduce device makers production forecasts
by 10 percent. For more information, please see CNBC.
DPD has announced that it has switched its fleet delivering parcels
in Oxford to be fully electric. Oxford is DPD’s first all-electric
city, however, nine further ‘green cities’ in the UK are being
confirmed by the end of 2021. The parcel deliveries in Oxford will be
from DPD’s eco-depot in Bicester.
DPD’s new Symmetry Park hub is its first to achieve net zero carbon
in construction, in accordance to standards set by the UK Green
Building Council (UKGBC). DPD delivers over 15,000 parcels from the
depot each week using a fleet of 40 electric vehicles. The facility,
which was officially opened in June, is the most sustainable facility
in DPD’s UK network and could create up to 250 new jobs once fully
operational. For more information, please click here.
UPS CEO Carol Tomé has said that expected package delivery demand
during peak season this year will exceed daily capacity by
approximately 5 million packages. To prepare for the surge in demand,
UPS is adding capacity ahead of peak season. UPS CFO Brian Newman said
this includes an additional 2 million square feet of sorting space and
more cargo aircraft. The parcel delivery company also announced a
surcharge increase ahead of peak season. These charges are aimed at
high-volume shippers and those experiencing an increase in demand. For
more details, please click here.
When a company works across multiple countries and locations,
logistics can become very complicated. In order to meet customer
demands for on-time delivery, many companies partner with a single
global carrier. If centrally managed, this has its advantages,
including volume discounts.
Far more likely is that each region or office negotiates its own
contract with a carrier or carriers. Each carrier will have its own
rules, pricing structure, labeling requirements and so forth.
As a result, shipping data will be spread across multiple systems.
Without centralized control and standardized transportation
procedures, shipping costs are difficult to track.
Furthermore, the customer service experience may be completely
different depending on where the customer is located. In order to
access the best shipping rates, whether shipping internationally or
domestically, global companies should consider a multi carrier
shipping solution. In this QAD Precision Report we look at how multi
carrier shipping software helps global enterprises to control shipping
costs and improve customer service. To read the full report, please