In the QAD Precision News Round-Up: 31 July 2020, Barnier upbeat
for a EU-UK deal; US trade deficit narrows; UPS announces Q2 results
and new facility in Tacoma; Amazon announces 1,000 new jobs in
Ireland; UK shop price deflation slows in July; plus the last mile
delivery challenges and more news.
UPS has announced that it has opened a ground package sortation and
distribution hub in Tacoma, Washington to facilitate commerce between
the Pacific Northwest and beyond. According to UPS officials, the
facility has added 777,000 square feet of new automation-driven
processing capacity to the UPS global network. Furthermore, the new
hub will provide approximately 800 full time and part time jobs. For
more information, please see Logistics Management.
In more UPS news, the carrier has released its Q2 2020 results.
Consolidated revenue was up to $20.5 billion. This is a 13.4 percent
increase compared to the same quarter in 2019. Furthermore, net
income was $1.8 billion for the quarter; while adjusted net income was
$1.9 billion. Again this is an increase compared to the same quarter
in 2019 — up by 8.8 percent. You’ll find more information on this here.
At a closed-door meeting with member state envoys to the EU, Brexit
negotiator Michel Barnier revealed that he is confident that a new
deal with the UK is possible. Nonetheless, two key obstacles remain.
The first is EU access to British fishing waters, and the second the
“level playing field” — the EU’s request that Britain tie itself
closely to the bloc's state aid, labor and environmental standards to
guarantee it does not weaken the EU's single market with poor-quality
goods. For more details, please see RTE.
In June, the US trade deficit in goods narrowed as exports recovered
following months of decline. Last month, the goods trade deficit fell
6.1 percent to $70.6 billion. Exports of goods increased 13.9 percent
to $102.3 billion. Furthermore, goods imports grew by 4.8 percent to
$173.2 billion after falling to their lowest level since 2010 in May.
The recovery in export was led by a 144.1 percent increase in the
exports of motor vehicles and parts. For more information, please see
On Monday, EY Item Club projected that Britain’s economy will not
recover to its 2019 level until the end of 2024. EY estimates that the
UK’s economy will contract by a record 20 percent in the April to June
quarter before it returns to a 12 percent expansion in Q3.
Additionally, the economists lowered their 2020 projection for the UK
to an 11.5 percent decline, worse than the 8 percent contraction
forecast in June. For more details, please see The Guardian.
In the next two years, Amazon is to create an additional 1,000
permanent jobs in Ireland. As a result, this will bring the company’s
total workforce in Ireland to 5,000 employees. The new positions will
be available at the company’s Cork and Dublin sites and range from
software development engineers, network development engineers, systems
development engineers and support engineers. Amazon also announced
that it is investing in a new 170,000 square foot campus in Charlemont
Square in Dublin. For more information, please see RTE.
In July, shop prices in the UK fell 1.3 percent according to the
latest BRC-Nielsen Shop Price Index. This reveals a slowdown in
deflation from the previous month when prices fell by 1.6 percent.
According to the Index, prices of non-food items decreased by 2.9
percent in July compared with 3.4 percent in June. The inflation of
food items remained at 1.5 percent in July for the third consecutive
month. For more details, please see Retail Gazette.
UK retailer Next has said that its full-price sales in Q2 fell by a
better-than-expected 28 percent. As a result, the retailer is
projecting full-year profit of approximately £195 million (€214.6
million). On Wednesday, the retailer said that store sales have been
stronger than anticipated while warehouse capacity has returned faster
than planned. Online sales are up 9 percent compared to the same
period last year. Nevertheless, in-store sales for the quarter ending
July 25 were down 72 percent, and down 32 percent since June 15. For
more information, please see The
Getting the last mile right is one of the biggest challenges facing
online retailers — and the delivery companies who work with them. The
Supply Chain Last Mile Report 2020 found that controlling logistics
costs and achieving on-time delivery were the two biggest challenges
in last mile delivery.
Last mile delivery is expensive. Frost & Sullivan forecasts that
global logistics spend will reach $10.6 trillion in 2020.
Transportation costs are 70 percent of this figure, and the last mile
accounts for 40 percent of overall logistics costs.
The biggest driver of parcel market growth is e-commerce,
particularly online shopping. This was true even before the global
coronavirus pandemic shut down non-essential retail around much of the world.
Consumer demands around seamless last mile delivery continue to grow.
In this QAD Precision Report, we look at challenges and opportunities
in the final mile. You can read the full report here.