In the QAD Precision News Round-Up: 5 November 2021, US factory
orders rose in September; South Korea posted double-digit export
growth; UPS announces 2022 GRI; American Eagle Outfitters to acquire
Quiet Logistics; plus the benefits of FTZs and more.
On Wednesday, The US Commerce Department said orders for US-made
goods increased 0.2 percent in September. Economists polled by Reuters
had predicted factory orders to remain unchanged for the month.
Furthermore, orders grew 17.6 percent on a year-on-year basis.
Growth in factory goods orders was primarily from machinery, primary
metals and fabricated metal products in September. Orders for
computers and electronic goods, transportation equipment as well as
electrical equipment, appliances and components declined, likely as a
consequence of the global chip shortage. Shipments grew 0.6 percent
following a 0.1 percent gain in August. Inventories at factories
jumped 0.8 percent in September while unfilled orders grew 0.7
percent. For more information, please click here.
In October, South Korea’s exports grew 24 percent compared to a year
previous and followed a 27.9 percent rise in September, according to
data released by the Trade Ministry on Monday. The data showed sales
to China jumped 25 percent while exports to other countries also saw
double digit growth. Exports to the US rose 22.9 percent, shipments to
Japan increased by 35.2 percent and EU exports jumped 19.6 percent.
Exports of petrochemicals expanded 68.5 percent, general machinery
increased 12.7 percent and mobile devices were up 15.5 percent. Car
exports declined 4.7 percent amid a global shortage of chips used in
automobile production. For more details, please see Bloomberg.
Penalties for 58,900 containers at the Ports of Los Angeles and Long
Beach are starting. Last Monday, the ports notified carriers to move
the containers or face fines. The fines start at $100 per container
and increase by $100 per day until the container moves. There are
84,000 containers on docks, over 3,000 higher than a week ago
according to the Port of Los Angeles Executive Director Gene Seroka.
Containers are ‘long dwelling’ if docked nine days for transport by
truck and six days for rail. The Port of Los Angeles reports that
40,000 containers have been sitting for over nine days. The Port of
Long Beach reports 10 percent of its 27,000 lingering containers
moved, while 18,900 containers are incurring fines. The Port of Los
Angeles and the Port of Long Beach handle the majority of sea freight
entering the United States. For more details, please click here.
UPS has announced General Rate Increases (GRI) for 2022 which will
begin December 26, 2021. According to the company, the rate increases
will support expansion plans along with capability enhancements. UPS
Ground, UPS Air, and International services will increase by an
average of 5.9 percent. In addition, UPS will implement an average net
increase of 5.2 percent for UPS Air Freight within and between the US,
Canada, and Puerto Rico. Furthermore, UPS’s Peak Surcharges will be
renamed to Peak/Demand surcharges, taking effect January 9, 2022. For
more details, please click here.
American Eagle Outfitters (AEO) is acquiring Quiet Logistics Inc, a
digital fulfillment company, for $350 million cash. The acquisition
will help AEO streamline its supply chain to better meet e-commerce demands.
In addition, the company also purchased AirTerra, an e-commerce
delivery company in May to further its e-commerce business. The
retailer’s online sales now account for 35 percent of its total
revenue. Furthermore, AEO’s second quarter revenue this year hit a
record $1.19 billion. The acquisition will close at the end of the
year. For more information, please see The
Wall Street Journal.
The United States Foreign-Trade Zones program was established in 1934
when Congress passed the US Foreign Trade Zones Act. The act allowed
for the creation of “Foreign-Trade Zones” — that is, specifically
designated, secure areas under the oversight of US Customs and Border
Protection (CBP) but outside US commerce. FTZs are located in, or
near, US Customs Ports of Entry and they are in all 50 states and
By using an FTZ, a company can realize a number of benefits,
including significant cost savings. In this QAD Precision Report, we
explain what an FTZ is, and its benefits. To read the full report,
please click here.
In order to qualify for duty-free treatment under the USMCA, goods
imported into the United States must conform with the Rules of Origin
set forth by the USMCA.
Join us for a 30-minute
live webinar, featuring QAD Precision's own Olivier Joncas,
where he discusses current rules of origin, how to apply them, and
correctly complete and maintain the proper documentation to take
advantage of the reduced tariffs under USMCA. Register here!