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PRECISION NEWS ROUND-UP: 10 JULY 2020

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Global Trade

UK APPLIES FOR BORDER POST AT NI PORTS

The UK government has submitted requests to the EU for Border Control Posts (BCPs) at Northern Ireland’s ports to check animals and food arriving in the EU single market. Following the end of the Brexit transition period on January 1, 2021, Northern Ireland will remain in the EU single market for goods while the rest of the UK will not. Therefore, some goods entering Northern Ireland from the UK will require checks. For more information on this news item, please see BBC News.

EU EXPECTS 8.3% CONTRACTION IN 2020

This week, the European Commission cut its 2020 and 2021 projections as the Covid-19 pandemic continues to affect the 27 member states.

In 2020, the Commission expects the EU to contract by 8.3 percent, before recovering by 5.8 percent in 2021. Consequently, this latest forecast downgrades earlier predictions. In May, the Brussels-based institution forecasted a 7.4 percent contraction this year, followed by a rebound of 6.1 percent in 2021. According to the latest forecasts, the Italian economy is forecast to contract the most among all EU members, by 11.2 percent this year. You will find additional details on this story at CNBC.

Logistics

LOGISTICS INDUSTRY REPORTS HIGHEST GROWTH SINCE 2018

According to the June analysis from Logistics Managers’ Index (LMI), the logistics industry is experiencing growth levels not seen since 2018. The LMI score for June 2020 was 61.7, an increase of more than 10 points from April’s record low. LMI calculates the score using a variety of industry growth metrics. These include warehousing capacity; inventory levels and costs; transportation capacity; as well as utilization and prices. For more information, please see Supply Chain Brain

Retail

H&M TO PERMANENTLY CLOSE 170 STORES WORLDWIDE

H&M has announced plans to permanently shut down 170 of its 5,000 stores across the globe. The retailer is accelerating its closing strategy in response to the coronavirus outbreak. In its Q2 report to investors, H&M Group said that it had upped its previous closure plans by around 40 as a result of the Covid-19 lockdowns across key markets. Furthermore, according to a H&M spokesperson, store closures will be across all of the H&M groups seven brands which include Weekday, Cos and Arket. For more details, please see Retail Gazette.

BROOKS BROTHERS FILES FOR BANKRUPTCY

It has been a turbulent week for retail brands. On Wednesday, luxury apparel retailer Brooks Brothers filed for chapter 11 bankruptcy protection. The retailer hopes that this will help it survive the twin blows of the retail industry's digital transformation and Covid-19 pandemic. Nevertheless, the company joins an ever-increasing list of retailers that have filed for bankruptcy since the coronavirus outbreak which has caused the temporary shutdown of non-essential retail stores. Other retailers who have recently filed for bankruptcy include JCPenney, Neiman Marcus and J. Crew. For more details, please see USA Today.

AMAZON EXPANDS OPERATIONS IN ARKANSAS

Amazon has announced plans to open a new 825,000 square-foot fulfillment center in Little Rock, Arkansas in 2021, creating approximately 1,000 new full-time jobs. In the new facility, Amazon employees will work together with Amazon robotics to pick, pack and ship small items to customers. Additionally, Amazon is also planning the launch of a new 85,000 square-foot delivery station in late 2020 for last mile order fulfillment. For more information, please see eSellerCafe.

Carriers

PARCELHERO: SEASONAL PEAKS TO BE REPLACED BY CONSTANT HOME DELIVERY DEMAND

According to UK carrier ParcelHero, demand for home deliveries has become constant amid the Covid-19 pandemic and will replace seasonal peaks. ParcelHero Head of Consumer Research David Jinks stated that despite the re-opening of UK non-essential stores on June 15, parcel deliveries and e-commerce sales have continued to increase. Furthermore, Jinks stated that IMRG/Capgemini found that e-commerce and multichannel retailers in the UK experienced recorded online growth during the week when non-essential retailers reopened. For more information, please see Post & Parcel.

Precision News

MORE PARTS, MORE PARCELS: AS CAR SALES FALL, AUTO E-COMMERCE GROWS

Even before the impact of the global coronavirus pandemic, the automotive industry had been facing significant disruption in the past few years. These include electric vehicle start-ups, changes in regulations, globalisation and the tendency for consumers to replace car parts instead of purchasing new vehicles.

Electric vehicle (EV) technology — and the increasing consumer adoption of greener alternatives — has begun to make serious inroads into the automotive market. The biggest name here is, unsurprisingly, Tesla. In June and early July, Tesla’s stock soared and the EV maker is now the most valuable car manufacturer in the world.

Nonetheless, seemingly unassailable car manufacturing giants have been facing more threats to their business in addition to relative newcomers dominating the EV space. Consumers are keeping their cars on the road longer — and that was the case even before Covid-19 shut down showrooms. But as sales of new cars dwindle, e-commerce sales of replacement parts are booming. In this QAD Precision Report we look at these industry challenges and how e-commerce is a growing market for automotive OEMs. Read the full report here.

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