In the QAD Precision News Round-Up: 6 March 2020, first round of
post-Brexit trade talks begin; coronavirus spread affects UK
factories; coronavirus may cut global economic growth in half;
Amazon to deliver orders in less than 5 hours; the benefits of
integrating compliance and multi carrier shipping solutions plus more.
On Monday, the first round of talks following Brexit took place
between the UK and the EU. The EU’s chief negotiator Michel Barnier
and his UK opposite number David Frost met in Brussels to kick-start
the talks. The two sides have just nine months to reach a new trade
agreement. The deadline is 31 December 2020. UK Prime Minister Boris
Johnson has ruled out extending the transition period. Last week, both
sides published their negotiation mandates, revealing their different
objectives. For more details, please see RTE.
On Monday, IHS Markit/CIPS purchasing managers’ index (PMI) survey
revealed that the impact of coronavirus is beginning to affect the
post-election recovery in Britain’s manufacturing sector. Factories
announced a spike in delays in their supply chains. Coronavirus, plus
the impact of flooding in the UK, has led to the biggest drop in
supplier delivery times in the 28 year history of the PMI. For more
information, please see Reuters.
The Organisation for Economic Cooperation and Development (OECD) has
warned that an escalation in the coronavirus outbreak could cut global
economic growth in half. As a result, several countries could enter
into recession this year. The OECD stated that global GDP growth could
decline over 2020 to as little as 1.5 percent. That is nearly half the
2.9 percent rate the OECD predicted before the outbreak. Furthermore,
the World Trade Organization is equally gloomy. Roberto Azevêdo, WTO
head said that: “The effects on the global economy are also likely to
be substantial and will start to show up in the trade data in the
weeks to come.” For more information, please see The Guardian.
The British government has estimated that a trade deal with the US
following Brexit would boost the UK economy by 0.16 percent over the
next 15 years. The UK government stated that a US deal should aim to
lower tariffs on UK exports and increase trade in services. According
to the UK government’s calculations, such an agreement would increase
the UK’s GDP by between 0.07 percent and 0.16 percent, depending on
the terms on the deal. For more details, please see BBC.
Amazon has announced that its customers could soon receive their
orders in under five hours. The e-commerce giant has been investing in
new warehouses to enhance its same-day deliveries. Currently, Amazon
Prime customers in Philadelphia, Phoenix, Orlando and Dallas can order
from thousands of items and receive them within a few hours. Customers
who place orders in the morning will receive their order before 6pm.
In addition, orders placed overnight should be delivered by 1pm. For
more details, please see Charged Retail.
On Monday, a group of bipartisan House lawmakers set out a plan to
stop counterfeit goods entering the US by making e-commerce companies
legally liable for counterfeit goods sold on their websites. The
proposed bill is named the Shop Safe Act. Should it come into force,
it would create a trademark liability for organizations selling fake
goods that present risks to consumer health and safety. This would
include potentially dangerous counterfeit such as drugs and medical
products. For more information, please see the New
For multinational enterprises and shippers, managing logistics across
different sites, countries and carriers is no easy task. Logistics
staff must ensure the efficient movement of goods, so that your
customers — and your customer’s customers — are not left waiting.
Delays are sometimes inevitable — such as third-party issues beyond
the control of management. However, certain delays are certainly
avoidable — such as incomplete or inaccurate documentation, resulting
in customs hold ups.
In addition, global trade is getting more complex and challenging.
That was true even before Covid-19 swept from Wuhan to the rest of the
world, disrupting supply chains across many industries.
Last October, the World Trade Organization downgraded its forecast
for trade growth in 2019 and 2020. In February 2020, the WTO was
equally pessimistic, stating that “world merchandise trade growth is
likely to remain weak in early 2020.” According to the WTO, it is
possible that year-on-year trade growth will decline in the first
quarter of 2020, and that Covid-19 may exacerbate this. In this QAD
Precision Report, we look at how integrating compliance and multi
carrier shipping helps multinationals to navigate these challenges.
Read the full report here.