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QAD Precision News Round-Up: 8 May 2020

In the QAD Precision News Round-Up: 8 May 2020, UK-US trade talks begin; China exports increase 3.8 percent in April; world food prices decline; DHL adds flights to the Americas; plus the high cost of financial compliance violations and more. 

Global Trade

UK-US TRANSATLANTIC TRADE TALKS BEGIN

On Tuesday, the first round of trade talks between the UK and US began via video call. The negotiations are set to last for two weeks and were formally opened by the UK International Trade Secretary Liz Truss, and the US Trade Representative, Robert Lighthizer. Negotiations will involve and were 

100 officials from the UK’s Department for International Trade (DIT), and 100 negotiators on the US side. The trade talks with the US are taking place at a time when there has been very little progress in negotiations with the EU. For in-depth coverage, please see The Guardian. 

CHINA EXPORTS INCREASE 3.8 PERCENT IN APRIL

On Thursday, data from China’s General Administration of Customs stated that China’s exports rose 3.5 percent from a year ago while imports declined 14.2 percent in the same period. Reuters polled economists whose forecasts were significantly different to the figures released by China. Economists forecast that exports would decrease by 15.7 percent, and that imports would fall 11.2 percent from the previous year. Furthermore, in April, China’s trade surplus was $45.34 billion —  significantly higher than the predicted figure of $6.35 billion. Chief economist for China at Citigroup, Liu Li-gang, said that China’s medical exports likely increased in April as the country transported health-care supplies to the rest of the world. For more details, please see CNBC. 

WORLD FOOD PRICES DECLINE IN APRIL DUE TO COVID-19

In April, world food prices fell for a third month due in a row. The fall is as a result of both the economic and logistical impact of the coronavirus outbreak, according to the United Nations food agency. The UN’s Food and Agriculture Organization food price index was down 3.4 percent from March. In addition, the FAO sugar price index fell to a 13-year low, decreasing 14.6 percent from March while the vegetable oil price index fell 5.2 percent. Further declines include the dairy index, which was down 3.6 percent, while the meat index fell 2.7 percent. For more information, please see Reuters. 

Carriers

DHL ADDS FLIGHTS TO THE AMERICAS 

DHL Express has seen imports from Asia to the America’s grow significantly as it helps fight coronavirus. Imports from Asia are up 70 percent year-on-year. Giving an indication of the increase, DHL Express transported approximately 168,000 shipments of medical supplies to the Americas in just one week. However, air capacity has been reduced due to the grounding of passenger flights. In response, DHL has upped its services, adding extra flights and charters meeting demand for PPE shipments. For more on this news item, please see Post and Parcel Technology.

UPS CONTINUES BATTLE AGAINST CORONAVIRUS 

UPS is working with Edwards Lifesciences to transport medical equipment used in hospitals in the fight against Covid-19. Edward Lifesciences provides critical care technologies to treat critically ill patients, including . Covid-19 patients in intensive care. Spokesperson and corporate vice president at Edwards Lifesciences, Katie Szyman, praised UPS, saying that as a result of the collaboration, the company had been able to ensure that critical technologies reached healthcare workers fighting the Covid-19 pandemic. For further details, please see Air Cargo News. 

AIR CARGO VOLUMES IMPROVE

In the second half of April, air cargo volumes improved following a rapid decline in March. Nonetheless, volumes in April were down 39 percent year-on-year while, and capacity was 45 percent lower. Despite this, the past two weeks in April shows that volumes have somewhat improved. According to Frieghtos’ WebCargo data, air freight rates remained stable in the past week as capacity increased. For more details, please see The Loadstar. 

QAD Precision News 

THE HIGH COST OF FINANCIAL COMPLIANCE VIOLATIONS

On 30 April 2020, a well-known financial services company was issued with a finding that it had violated sanctions regarding the proliferation of weapons of mass destruction. The US Treasury Department’s Office of Foreign Assets Control (OFAC) found that the company had issued a prepaid card to, and processed financial transactions totaling $35,246.82 on behalf of a person on the Specially Designated Nationals (SDN) list. Luckily for the bank, OFAC also found that the violations were not the result of a wilful flouting of the law, but rather human error and alongside gaps in the company’s screening process.

Fine for violations of financial compliance laws can be very steep. In 2014, an international banking group with a presence in 73 countries made headlines for all the wrong reasons. The bank was the recipient of the largest ever penalty issued by OFAC. The amount? An eye watering $8.9 billion for violating sanctions against Cuba, Iran and Syria. 

Banks that work internationally are subject to a host of financial compliance regulations. In this QAD  Precision Report we look at areas of risk for banks and financial firms as well as strategies to ensure ongoing financial compliance. To read the full report, please click here. 

[JOIN OUR WEBINAR] IS PARCEL SHIPPING COSTING YOUR UNIVERSITY MORE THAN MONEY?

Please join QAD Precision on Thursday, May 21st at 12 pm EST for 30 minutes for an informative session on university supply chain logistics. For the last few years we have been touring the largest universities in the US and examining their shipping and trade compliance processes. We will discuss our findings at this remote conference.

Who should attend this event?

  • Procurement leaders who are looking to control and aggregate their ship spend.

  • Supply chain and logistics leaders who are looking to control shipping behavior

  • IT leaders who are looking to relinquish support of multiple separate shipping and compliance applications

  • Trade compliance people who want to ensure proper screenings procedures are followed on all outbound shipments

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