I know what you’re all thinking: this month’s digest is going to be a juicy one. Retail, commerce, politics – headlines have been springing out here, there and everywhere over the past few weeks. To kick things off, I thought I’d start with the elephant in the room (and the UK for that matter). Theresa May has decided to step down from her position as Prime Minister next month.
Our Conservative Party MP will officially resign on June 7th 2019. During May’s announcement, she expressed that she has ‘deep regret’ to have not delivered an outcome for Brexit. Questions are still being asked about what will transpire regarding Brexit, but the even bigger question is who our next MP will be, and how they will go about seeing us out of the EU. The Conservative Party hopes to put in place a new leader by the end of July.
Unfortunately, double doors aren’t the only things sliding in the land of retail. Over the last few weeks, Jamie’s Italian and Debenhams have closed down, which has put thousands of jobs at stake. From food to fabrics, perhaps the rise of restaurant-to-door delivery and online shopping is taking its toll. Retail giants Topshop and Boots have also announced store closures across the country, showing cracks in merchandisers we all thought were safe. Over 200 Boots stores are scheduled to close, creating unease for its customers who save up their Boots Advantage points for rewards.
Yet it isn’t all doom and gloom: supermarket statistics suggest that shoppers are still spending in store. Aldi and Lidl are a great example of this, recently revealing that the two stores are worth £344m more than last year. Surveys show almost 1 million more households visited Aldi stores compared to last year, whilst an increase of 630,000 visited Lidl. Lidl and Aldi’s figures are creeping up the supermarket leader board, but Tesco is still firmly at number one. Sainsbury’s and Asda are at joint 2nd place, according to the market share.
Focusing on American trade news, tariffs are a popular topic of conversation at the moment. Tariffs that existed when trading metals, such as steel and aluminium, have now been cut. The cut was confirmed during President Trump’s speech held in Washington, stating that the US just reached an agreement with Canada and Mexico and we will be selling our product into those countries without the imposition of tariffs or major tariffs. The removal of the US-imposed tariffs will lift trade barriers, which will open new opportunities for the movement of metals through North America. According to the Wall Street Journal, delivery costs have risen as a result, including companies such as Stonyfield, which uses metal use in its product’s packaging.
As one door opens, another one closes…Donald Trump published a statement on May 30th, announcing that the US will be imposing a 5% tariff on all goods imported from Mexico, starting 10 June. The reason for the introduction of this tariff is to address ‘the emergency at the southern border.’ This ’emergency’ Trump refers to is related to the Mexican immigration Trump is trying to quash with his plan to build a wall to divide Mexico and the United States. A statement found on the official The White House website claims that if the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed. Furthermore, should Mexico still not have ‘taken action’, the tariffs could rise to 10% on 1 July, 15% on 1 Aug, 20% on 1 Sept and 25% on 1 Oct. According to Goldman Sachs, Mexico was the second-largest supplier of goods to the US, totalling $352bn (£275bn) in imports last year. Mexico’s response to Trump’s tariffs is that it could result in the contrary – worsening illegal immigration to the US – and could even consequently damage both countries.
Finally, technology and trade go hand in hand, which has been suitably reflected in blockchain’s boost thanks to shipping. Ocean carriers such as CMA CGM and Mediterranean Shipping Company (MSC) are granted a more active role in the supply chain, due to the shipping companies both joining a three-year-long TradeLens programme. Maersk is investing in 50,000 tracking devices, which includes CMA CGM and MSC, and plans to invest in landside logistics operations, strengthening tracking technology, as well as the blockchain agreement, to enhance the carrier’s data resources.
All in all, it’s been a roller coaster of a month. The discussion doesn’t seem to be slowing down, and nor does the freight industry.
Rachel Jefferies, Editor, FORWARDER magazine