In the QAD Precision News Round-Up: 4 September 2020, global trade
recovering faster than 2008; Australia enters recession; Prime Air
receives FAA approval for drones; German retail sales decline; plus
the benefits of automating freight bill auditing and more.
GLOBAL TRADE RECOVERING FASTER NOW THAN 2008
Germany’s Kiel Institute for the World Economy has said that global
trade is on track to recover faster from the Covid-19 pandemic than
after the financial crisis in 2008. The institution's president
Gabriel Felbermayr said that shipping volumes have already rebounded
to levels that took more than a year to reach following the collapse
of Lehman Brothers Holdings Inc. According to Felbermayr, this
suggests a V-shaped recovery.
However, and in contrast, in August the World Trade Organization said
that forecasts for a V-shaped rebound in 2021 may be optimistic. For
more information, please see Transport Topics.
AUSTRALIA IN FIRST RECESSION IN NEARLY 30 YEARS
Australia, like the US, Japan, UK and Germany has entered a technical
recession — that is, two consecutive quarters of decline. From April
to June, Australia’s economy contracted by 7 percent. This is the
first time Australia has experienced recession since 1991. The decline
was deeper than median predictions of 5.9 percent.
This news comes as Victoria, Australia’s second most-populous state,
remains in lockdown. Furthermore, over a million people have become
unemployed since March as the country locked down certain sectors of
the economy. Chief economist for BIS Oxford Economics Sarah Hunter
said the economy is not expected to recover to pre-pandemic levels
until early 2022. For more details, please see RTE.
AUSTRALIA, INDIA & JAPAN TEAM UP FOR SUPPLY CHAIN INITIATIVE
This week, the trade ministers of Japan, Australia and India
announced plans to work towards building stronger supply chains in the
Indo-Pacific region. The initiative aims to counter China’s dominance
in the region. The countries have yet to work out details as to how
this will operate in practice.
In a video conference, the three trade ministers invited other
countries in the region to join the initiative. Japan’s trade
minister, Hiroshi Kajiyama, suggested including the digitalization of
trade procedures and support for capital expenditure in the
initiative. For more details, please see Supply
GERMAN RETAIL SALES SEE UNEXPECTED DECLINE
In July, German retail sales declined unexpectedly. This has reduced
hopes that consumer spending will drive economic recovery in the third
quarter. Data from the Federal Statistics Office showed that retail
sales decreased 0.9 percent on the month in real terms following a
revised decline of 1.9 percent in June. However, the FSO also found
that in the first seven months of 2020, retail sales increased sales
by 2.6 percent in real terms despite the Covid-19 pandemic. For more
details, please see CNBC.
FAA APPROVES AMAZON DRONE AIRLINE
On Monday, the Federal Aviation Administration (FAA) certified Amazon
Prime Air as an “air carrier” and granted the e-commerce company
permission to begin operating its Prime Air drones. Under a trial
program, Amazon can now begin its first commercial deliveries in the
US using the MK27 drone it unveiled last year.
While routine deliveries are most likely years off, Amazon plans that
the high tech devices will make deliveries within 12 kilometers of a
warehouse, reach customers within 30 minutes and carry packages
weighing up to five pounds. For more information, please see The
AIR CARGO GROWTH LIMITED BY SUPPLY CONSTRAINTS IN JULY
On Monday, the International Air Transport Association (IATA) said
that although global air traffic was weaker than anticipated in July,
new export orders suggest strong sector growth for the rest of the year.
According to the IATA, air cargo volumes improved from June to July
but remained below levels in 2019. Cargo demand decreased by 13.5
percent compared to July 2019. However, this was an improvement on
June’s 16.6 percent year-over-year decline. For more details please
see Freight Waves.
QAD Precision News
3 MINUTE EXPLAINER: WHY AUTOMATE FREIGHT BILL AUDITING?
Controlling transportation costs is vital for any organization that
ships goods. However, in many companies there is a disconnect between
what logistics managers have agreed with carriers, and the staff that
Freight bill auditing offers an analytical, financial review of
carrier invoiced costs versus supplier agreements. Therefore, it is an
essential part of controlling supply chain costs. This is true whether
you ship via ocean freight carriers or expedited parcel carriers.
However, manually auditing carrier invoices is time-consuming. In this
3 Minute Explainer we look at how automated freight bill auditing
works and its benefits. To read the Explainer, please click here.
WHY TRADE COMPLIANCE MATTERS
QAD Precision’s Ian Berman has published an article in Industry
Today, “Why Trade Compliance Matters.” Ian looks at the causes of
screening failures and their costs, as well as how automation supports
best practices. You can read the full article here.