In the QAD Precision News Round-Up: 7 May 2021, China-Australia
relations sour; UK withdraws vessels from Jersey; DPDHL raises
financial outlook; Eurozone retail sales jumps; and why you need to
audit parcel shipping spend plus more.
On Thursday, China’s government announced that it is suspending all
activity under a China-Australia Strategic Economic Dialogue.
Relations between the two countries have been strained in recent
years. In 2018, the country's bilateral relationship came under
pressure when Australia publically banned Chinese tech giant Huawei
from its 5G network. Furthemore, tensions continued to rise last year
when Australia requested an independent investigation into the origins
of the coronavirus, prompting China to retaliate.
In the period between March 2020 and March 2021, Australia exported
A$149 billion ($115 billion) worth of goods to China of which iron ore
was the largest product. Nonetheless, while the dispute is not
expected to impact the iron ore trading relationship between the two
countries, it will continue to have an impact on Australia's
commodities sector by discouraging Chinese investment. Yanting Zhou,
senior economist at Wood Mackenzie said effective bans on Australian
imports are set to continue. For more information, please see Reuters.
On Thursday, the UK withdrew its Royal Navy vessels from the waters
off Jersey. The UK dispatched the vessels following a charged row with
France over post-Brexit access to Jersey’s waters. However, the patrol
boats will remain on standby to support the Channel island if tensions
escalate, according to the UK.
Earlier this week, both countries sent patrol vessels to Jersey. The
moves came after French fishing boats sailed in protest to Jersey's
main harbour. The dispute centers on access to the waters for French
fishing vessels. However, Jersey says it is adhering to the rules for
issuing licenses set out in the EU-UK post-Brexit trade deal. For more
information, please see Reuters.
Ford CEO Jim Farley said the company expects the ongoing
semiconductor shortage to get worse before supply levels recover. In
addition, Mr Farley estimates that the sourcing issue will reach its
nadir in the second quarter. In the first quarter, Ford’s wholesale
units sold to dealerships slumped 6 percent year-on-year due to the
chip shortage. Mr Farley said overall volume declined 17 percent as a
result of the supply issue.
Furthermore, Mr Farley does not expect that semiconductor supply will
fully recover until the fourth quarter this year or early 2022. As a
result of the ongoing shortage, Ford is working to modernise its sales
process which includes leaner inventory and higher turn rates. For
more information, please click here.
On Thursday, online fashion retailer Zalando announced plans to add
five warehouses to its network by 2023. Following strong first-quarter
sales and profits, the retailer raised its outlook for the full year.
In Q1, sales surged 47 percent to €2.24 billion and operating profit
reached €93.3 million. Consumers have also continued to return items
at a rate, helping to boost profits. Furthermore, the company records
its strongest customer growth since 2013, reaching 41.8 million active customers.
According to Zalando, the additional warehouses will assist in
reaching its target to capture over 10 percent of the fashion market
in Europe. This year, two new warehouses in Madrid and Rotterdam will
open and plans for the remaining three in France, Germany and Poland
will begin. For more information, please see RTE.
In March, retail sales in the Eurozone beat expectations as consumer
demand increased across the region. According to the European Union's
statistics office Eurostat, retail sales in the 19 eurozone countries
increased 2.7 percent month-on-month in March for a 12 percent
This beat estimates of economists polled by Reuters. Economists had
forecast a 1.5 percent monthly jump and a 9.6 percent annual gain.
Demand for non-food items, excluding automotive fuel, drove the surge.
Online purchases grew 37.2 percent year-on-year, Eurostat said. For
more details, please see RTE.
On Wednesday, Deutsche Post DHL upped its financial outlook. The move
was a response to a very strong first quarter as operating profit
tripled. The company also forecast that e-commerce will continue to
surge and global trade will recover.
The logistics company raised its operating profit forecast to
approximately €6.7 billion ($8.05 billion) in 2021, and over €7
billion in 2023. Previously, the company forecast €5.6 billion for
2021. In Q1, operating profit increased to €1.9 billion on revenues up
26 percent to 18.9 billion. For more details, please see CNBC.
If shipping is a critical component of your operations, so is
controlling your supply chain costs. Transportation is a major factor
in the final calculation of the cost of getting your goods to the end user.
Most enterprises understand the importance of tracking and auditing
their transportation costs. But if small, express shipments have not
been a core part of their distribution model, many have been slower to
apply the same principals to parcel shipping.
However, e-commerce has changed the way many enterprises reach their
customers. Enterprises are supplementing traditional distribution
channels with an increasing number of parcel shipments. With annual
rate increases, accessorial charges, high fuel costs and dimensional
pricing, the cost of parcel shipments add up. In this QAD Precision
Report we look at the necessity of auditing your parcel invoices. To
read the full report, please click here.