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The State of “Fast and Free” Delivery: What Retailers and Parcel Carriers Should Know

parcel

The State of “Fast and Free” Delivery: What Retailers and Parcel Carriers Should Know

Thanks primarily to Amazon (and the explosive growth of Amazon Prime), consumers in 2020 are conditioned to expect that virtually anything bought online can be shipped for free. That’s true for small orders like prescriptions and batteries, and for huge items like appliances and tires. If it means a shopper has to buy an annual subscription, or spend a little more to meet a free-shipping minimum, most people would consider that a low bar to meet.

But as every retailer and ecommerce seller knows, shipping is never free. Today’s multi-billion-dollar parcel carriers are getting paid. They moved nearly a billion parcels this past peak season. That shipping cost is being ultimately absorbed by sellers and is reflected in the price buyers are paying for products.

And parcel volume growth isn’t slowing down – it’s accelerating. According to the Pitney Bowes Parcel Shipping Index, global parcel shipping volume grew 70% from 2014 to 2017, to 74.4 billion parcels. The index projects global parcel volume to rise at a rate of 17% to 28% from 2018 to 2020, surpassing 100 billion parcels this year.

Handling increasing parcel volume isn’t just about figuring out how to do more of the same. The process of getting things where they need to go is under a transformation. In a recent report, Gartner found that transportation is the largest portion of delivery costs, due to a shift from carriers handling bulk freight to small parcels.

[Parcel and last-mile delivery will] continue to be the fastest-growing shipment segments due to increases in multichannel retail, eCommerce in B2B and same-day delivery offerings.

Gartner also observed what many companies are feeling. As volume continues to grow, companies only have time to react instead of plan. That means many are missing opportunities to revolutionize parcel logistics with innovation and alternative delivery models.

How fast does “fast” need to be?

According to research from Freightwaves, consumers unsurprisingly still have an appetite for fast delivery, with 60% of shoppers saying they’ve abandoned an online purchase because of slow delivery times. With record volumes to handle – and so much at stake with consumer expectations – efficiency, on-time consistency, and flexibility are key for parcel delivery services, whether it’s same-day, next-day or deferred.

This year’s U.S. peak shipping season saw about a billion package deliveries (up 4.5% from 2018). Retailers are offering more same-day options, which increases demand and the need for trucks, local delivery vehicles, drivers, warehouses and warehouse workers.

This year, the challenge was also complicated by a shorter selling season (the holiday season was six days shorter in 2019 than is typical), new restrictions on driver hours of service, and the December 16 implementation of new rules for Electronic Logging Devices in commercial trucks. All of these factors impact capacity and the ability of networks to deliver fast and on time.

Emerging shift in consumer behaviors

On the flip side of the “freer and faster” coin is Gartner research analyst Tom Enright. He’s counseled retailers on their supply chain and fulfillment strategies for more than a decade.

In a groundbreaking report published in November 2019, he detected an emerging shift in consumer behavior: “Consumers are starting to express increased concern about the environmental impact of retailer’s shipping practices, and are seeking slower, more sustainable options.”

Consumers are now defining convenience as order fulfillment on their terms, and they’re expressing more and more concerns about the environmental impact of fast, one-off deliveries.

It’s a conflict between three consumer choices:

-The desire for instant gratification

-The price reduction they can get for waiting longer for a delivery

-The impact fulfillment speed has on transportation, packaging and other environmental issues.

According to Enright, for retailers, these shifting demands are driving the emergence of two new requirements that are somewhat at odds with current models:

-Retailers must be more environmentally sustainable in order fulfillment operations.

-Retailers must offer a wide range of shipping speeds and prices, especially if incentives or other benefits are included in the offering.

Considerations for retailers and parcel carriers

That means retailers – and their parcel delivery partners – need to consider more flexible fulfillment options. These will need to be able to satisfy a consumer who wants a totally different delivery than currently exists. Companies will need to consolidate multiple online purchases from different retailers, have them combined using less packaging and have it delivered as one shipment a week from Tuesday. That’s instead of three separate shipments expedited for delivery tomorrow – or even same-day.

Major retailers like Amazon, Walmart, Target, and The Home Depot are doubling down on offering same-day delivery options. And for parcel delivery providers, it remains a highly fluid and exciting market. New network models are not only welcome, but will be required to meet the ever-evolving demands of shippers.

The explosive growth of package volumes, and consumers’ desire for next-day and, increasingly, same-day delivery, aren’t likely to wane anytime soon. And retailers and parcel carriers will need to pursue creative, innovative ways to keep up with those expectations and meet that demand.

_____________________________________________________________

Valerie Metzker is the Head of Business Development at Roadie, a crowdsourced delivery service that works with consumers, small businesses and national companies across virtually every industry to provide a faster, cheaper, more scalable solution for scheduled, same-day and urgent delivery. With over 150,000 verified drivers, Roadie covers 89% of U.S. households — the largest local same-day delivery footprint in the nation.

ecommerce shipping

Shipping 101 For Ecommerce Platforms

The ecommerce sales are set to touch 6.5 billion USD in 2021. With the ever-expanding ecommerce industry, the shipping industry is also set for an explosion. Coupled with the changes brought about by technology and dynamic user preferences impacting the ecommerce shipping field, how do you prepare to excel, then? This article will work as a beginner’s guide to tell you all about ecommerce shipping. The world of shipping will no longer be a difficult mystery.

Shipping 101

Here is how you can map out your shipping plan to streamline and organize:

1. Shipping Strategy

Creating a shipping strategy is the first step. Here are the key points you need to consider:

Shipping rates: Will you charge flat shipping rates for all your orders or will they differ from destination to destination? A customer might abandon the cart if the shipping rate is too high, and you might incur a loss if it is too low. Decide on the shipping-rate policy first. You can also increase product prices slightly and offer free shipping.

Inventory/order management: Will you manually update every order and maintain the inventory or will you automate it? Automation is recommended as it minimises the errors.

Global or local? Will you ship across the globe? Or will you ship only in your country? This question is important to answer as it will determine how much you spend on shipping, the carrier you use, the time taken for delivery, etc.

Shipping methods: What mode will you ship through? Air, sea, or land? There might be higher risk and lower shipping cost when you choose sea over land and air, but shipping by air will afford you to deliver faster. Make a list of the pros and cons of all methods to decide.

Shipping insurance: Shipping carriers offer insurance, and this can give you a great deal of security. Get the coverage, especially if you have large volumes.

2. Shipping Costs

While calculating shipping costs, these are the four points you need to keep in mind:

Shipping carrier: Shipping carriers like FedX, Aramex, DHL, UPS are popular with ecommerce companies. But if you are only going to ship locally, ask for quotes from your local carriers, the rates might be much much cheaper. Use the shipping carrier’s calculator to compare.

Source and destination countries: The distance between the source and the destination and whether both the points are in the same country will play a huge role in determining the shipping costs.

Product dimensions and weight: It is advisable to measure all your products before you list them online – every shipping carrier charges depending upon the weight and dimensions of your package.

Margin-wise: Be margin wise. Are the shipping costs too heavy on the pocket? How much profit margin do you want to keep? Shipping is a major expense, and you should never ignore the small charges.

3. Packaging and labelling

You can either source the packaging from your shipping carrier, or use it as a way for branding. With increasing awareness, sustainable packaging is much in demand, but it is also expensive. You can also offer personalised packaging or special packaging for gift orders.

Another important part is the labelling. Each order must be labelled with the order number, the addresses among other details. Doing this incorrectly might result in a mix-up.

4. Invoicing

Many countries have laws that require multiple copies of invoices to be sent with the package. One for you, one for the customer, one for the shipping carrier, one for taxation purposes etc. Invoicing can be automated too. Just invest in good virtual infrastructure.

5. Communication and tracking

Once the order is shipped, most automation software solutions send an e-mail to the customer with the tracking link. This is a very important part of the shipping process. If the customer doesn’t receive communication from your end, it not only looks bad on your company but also might result in complaints.

6. Auditing Shipments

This is the part which most ecommerce companies fail to do. And even if they audit their shipments, they do it manually. Auditing your shipments allows you to claim for refunds from your shipping carrier. There might be duplicate or incorrect charges on your shipping invoice, or the carrier might have damaged or lost your package. You can get reimbursed for it and save on shipping costs.

7. Customs

If you are shipping globally, be well-aware of prohibited items that differ from country to country. Also, the documentation should be spick and span for the package to clear the customs zone. Know about the customs fees and don’t forget to add it to your ecommerce platform, so the customer is not kept in the dark. Most shipping carriers offer information about customs declaration on their websites.

Questions to Ask Yourself Before Making a Shipping Plan

-What is your shipping budget? Will you charge real-time carrier rates for all your orders?

-Will you offer next-day or same-day delivery?

-What packaging will you use?

-Where will you ship and where will you not?

-Will there be a minimum order cost for free shipping?

-How will you communicate regarding the orders with your customers?

-Will you opt for third-party logistics?

-Will you choose automation software solutions when it comes to shipping management?

Quick Tips

-Focus on creating a great customer experience when you package and ship the product.

-Premium packaging can encourage repeat customers.

-If your shipping strategy doesn’t work, always have plan B.

Know the rules and regulations of all the states and countries you are shipping to. Some products might be banned.

Remember to one order might have multiple shipments. That’s double-triple the work.

Outsourcing the logistics and the auditing might save a lot of work, and you can let the experts handle it for you.

There are multiple variables when it comes to ecommerce shipping. Understand, plan and then execute. While shipping might seem like a not-so-important aspect of your ecommerce business as sales, it is actually a driving factor – one that can help you achieve success.

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Ana Shan is a product evangelist at AuditShipment.com, an AI-driven audit service that automatically captures more than 20 carrier errors and helps businesses save up to
16% of their shipping costs.

manufacturers

3 Privacy Compliance Priorities for Manufacturers in Ecommerce

Manufacturing leaders aren’t exactly diving into the world of ecommerce headfirst. Instead, they’re cautiously dipping one toe at a time into the waters. Several things keep them from going “all in,” so to speak, but one of the most serious is compliance with privacy regulations.

In June 2018, California’s governor signed the California Consumer Privacy Act into law. This year, the law officially went into effect. Under the CCPA, companies must notify users if they intend to monetize their data and give them the option to opt-out.

Its reach will be significant. The law is expected to affect more than 500,000 businesses in the United States alone — and many more around the world.

Those that fail to comply will face hefty fines. So if manufacturers are going to survive in the age of ecommerce, they won’t be able to wade in little by little and take on privacy compliance halfway. Privacy regulations are complicated, and compliance can literally make or break a business.

Ignorance of the Law Is Not a Defense

Most companies that do business online have researched state and national laws to some extent, but data privacy laws aren’t easy to understand. To truly comply with all of their nuances and demands, businesses have to hire additional people, integrate complex processes into internal operations, and put forth massive amounts of effort.

Most got into ecommerce with the hopes that having an online presence would help them avoid headaches and reach customers more easily. But when the market matures, regulations do, too. And while most companies know not to send email newsletters to people who didn’t subscribe or sell customer information without permission, they don’t know the finer details of regulations, much less how they differ by state.

For instance, a prospective client reached out to us after it had ended up in court for violating a state privacy law it didn’t know existed. The company’s website was using an assumptive privacy policy, which assumes that users agree to their data being collected and used by merely using the site. Because the company was using the site to do business in a state that banned these privacy policies, it faced a potential fine of $1,000 per site visit. The company ended up settling the case out of court, but it was still a shocking and scary discovery.

Even for well-meaning manufacturers, ignorance doesn’t hold up in court as a legal defense. Intentional violations can cost up to $7,500 per violation. And unintentional violations can be $2,500 per violation, making even accidents a significant cost. Manufacturers are timid about ecommerce because data privacy and compliance are intimidating. Some never pursue ecommerce for this very reason.

Imagine a small manufacturer that’s decided to sell online. It goes through the entire process of building a site, implementing new operations, and calculating shipping as transactions occur. Then suddenly, it has to be responsible and ready for multiple data checks and data wiping. It’s a lot to take on, both from the operations and the financial perspective. In total, meeting compliance standards could initially cost companies up to $55 billion.

Make Ecommerce Security a Priority

As you implement ecommerce in your manufacturing business or work to strengthen compliance with your current ecommerce system, here are three things to focus on:

1. Ensure that your systems are secured and encrypted. Wherever your ecommerce data lives, you need to be 100% sure it’s secured and encrypted. This is especially important if you’re handling, storing, or passing along credit card information.

Doing this is a combination of several elements. First, have an audit done that considers your specific industry so you can be entirely sure you know what regulations to comply with and to what degree. After that, you’ll have to put additional processes into place, and those processes will likely need additional software and hardware systems to serve their purpose.

We’ve worked with manufacturers where credit card information was being stored on-site and transferred between systems in a way that wasn’t secure. Often, older ERP systems don’t have the necessary security fields. It’s key, then, to move to a modern ERP and integrated ecommerce system to avoid and rectify situations like these.

2. Monitor employee access. Be aware of which employees have access to your development, staging, and production systems. While digital hacking is a security concern, physical access to information is, too. The best way to control who has access to private information is to grant permission to only specific roles and for only certain pieces of the system. A developer shouldn’t be making coding changes and publishing unchecked. A combination of role-based technical security and tight control on physical access is the best way to address this concern.

A manufacturing company often has a small technical team. We’ve seen teams of one that have access to all levels of data in these smaller organizations. Hiring multiple people just for data privacy management and security purposes is a serious financial burden, but you need to make having multiple people designated to multiple parts of the privacy process a priority.

3. Keep up with CCPA and GDPR. Being aware of and keeping up with CCPA and the European Union’s General Data Protection Regulation will be essential to staying compliant. If you meet the criteria for CCPA, be sure that you can wipe customers’ information from existence completely upon request.

If your annual gross is more than $25 million or you derive more than half of your annual revenue from selling California residents’ information, you have to comply with the law. This means being transparent about your data-usage policies, giving consumers access to the information you’ve collected about them, offering the choice to sell their information, and being capable of deleting all of their personal information upon request.

Knowing the processes and resources you need to handle compliance obligations is the hard part. You need people who can handle customer requests for data review and deletion and who can remove and keep the right data. Being supported by business and accounting teams will make this process smoother and stronger.

A few years ago, the internet was like the Wild West. Like most wild things, it gets bigger and needs to be tamed and managed. That management is a process. Some laws sound good on paper but will do more harm than good if fully enforced. They can even force honest manufacturers away from ecommerce. Ultimately, we will find a balance with responsible security and data if everyone works together. In the meantime, be aware of laws and make an honest effort to comply with them. There’s plenty of opportunity in ecommerce; you just have to pursue that opportunity with the right systems, team, and security in place.

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Michael Bird is the CEO of Spindustry, a digital agency focused on eCommerce, SharePoint portals, and enterprise websites. He has almost 30 years of experience in interactive development, user behavior, and business solutions.

wheat gluten

Wheat Gluten Market in the EU Reached $925M

IndexBox has just published a new report: ‘EU – Wheat Gluten – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The revenue of the wheat gluten market in the European Union amounted to $925M in 2018, remaining relatively unchanged against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Over the period under review, wheat gluten consumption continues to indicate a moderate contraction.

Consumption By Country in the EU

The countries with the highest volumes of wheat gluten consumption in 2018 were France (114K tonnes), Germany (108K tonnes) and the Netherlands (77K tonnes), with a combined 47% share of total consumption.

From 2007 to 2018, the most notable rate of growth in terms of wheat gluten consumption, amongst the main consuming countries, was attained by the Netherlands, while wheat gluten consumption for the other leaders experienced more modest paces of growth.

In value terms, France ($171M), the Netherlands ($127M) and the UK ($95M) were the countries with the highest levels of market value in 2018, with a combined 43% share of the total market.

In 2018, the highest levels of wheat gluten per capita consumption was registered in the Netherlands (4,532 kg per 1000 persons), followed by France (1,752 kg per 1000 persons), Belgium (1,376 kg per 1000 persons) and Austria (1,339 kg per 1000 persons), while the world average per capita consumption of wheat gluten was estimated at 1,256 kg per 1000 persons.

Production in the EU

In 2018, the amount of wheat gluten produced in the European Union stood at 934K tonnes, going down by -2.4% against the previous year. Overall, wheat gluten production continues to indicate a mild contraction.

Production By Country in the EU

The countries with the highest volumes of wheat gluten production in 2018 were France (249K tonnes), Germany (220K tonnes) and Belgium (109K tonnes), together accounting for 62% of total production. The UK, Poland, Lithuania and Italy lagged somewhat behind, together comprising a further 24%.

From 2007 to 2018, the most notable rate of growth in terms of wheat gluten production, amongst the main producing countries, was attained by Lithuania, while wheat gluten production for the other leaders experienced more modest paces of growth.

Exports in the EU

The volume of exports amounted to 703K tonnes in 2018, rising by 5% against the previous year. The total exports indicated a prominent increase from 2007 to 2018: its volume increased at an average annual rate of +6.0% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, wheat gluten exports increased by +45.3% against 2015 indices. The volume of exports peaked in 2018 and are expected to retain its growth in the near future. In value terms, wheat gluten exports amounted to $1.2B (IndexBox estimates) in 2018.

Exports by Country

The countries with the highest levels of wheat gluten exports in 2018 were Belgium (221K tonnes), France (176K tonnes) and Germany (134K tonnes), together accounting for 76% of total export. It was distantly followed by Poland (44K tonnes), Lithuania (41K tonnes) and the UK (37K tonnes), together committing a 17% share of total exports. Italy (20K tonnes) followed a long way behind the leaders.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Lithuania, while exports for the other leaders experienced more modest paces of growth.

In value terms, the largest wheat gluten supplying countries in the European Union were Belgium ($363M), France ($296M) and Germany ($234M), with a combined 76% share of total exports. These countries were followed by Poland, Lithuania, the UK and Italy, which together accounted for a further 20%.

Export Prices by Country

In 2018, the wheat gluten export price in the European Union amounted to $1,676 per tonne, surging by 7.4% against the previous year. Over the period from 2007 to 2018, it increased at an average annual rate of +3.9%.

Average prices varied noticeably amongst the major exporting countries. In 2018, major exporting countries recorded the following prices: in Italy ($1,890 per tonne) and Germany ($1,745 per tonne), while the UK ($1,521 per tonne) and Poland ($1,642 per tonne) were amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by France, while the other leaders experienced more modest paces of growth.

Imports in the EU

In 2018, the amount of wheat gluten imported in the European Union stood at 410K tonnesThe total imports indicated pronounced growth from 2007 to 2018: its volume increased at an average annual rate of +3.2% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. In value terms, wheat gluten imports totaled $659M (IndexBox estimates) in 2018.

Imports by Country

In 2018, Belgium (128K tonnes), distantly followed by the Netherlands (80K tonnes), France (42K tonnes), the UK (37K tonnes) and Germany (22K tonnes) represented the key importers of wheat gluten, together making up 75% of total imports. The following importers – Spain (17K tonnes), Italy (17K tonnes), Poland (12K tonnes), Greece (11K tonnes), Denmark (9.8K tonnes) and Hungary (7K tonnes) – together made up 18% of total imports.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Poland, while imports for the other leaders experienced more modest paces of growth.

In value terms, the largest wheat gluten importing markets in the European Union were Belgium ($209M), the Netherlands ($138M) and France ($72M), with a combined 64% share of total imports. These countries were followed by the UK, Germany, Italy, Spain, Poland, Greece, Denmark and Hungary, which together accounted for a further 30%.

Import Prices by Country

The wheat gluten import price in the European Union stood at $1,608 per tonne in 2018, growing by 8.2% against the previous year. Over the period from 2007 to 2018, it increased at an average annual rate of +3.4%.

Average prices varied somewhat amongst the major importing countries. In 2018, major importing countries recorded the following prices: in Denmark ($1,741 per tonne) and France ($1,741 per tonne), while Spain ($1,193 per tonne) and the UK ($1,244 per tonne) were amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Belgium, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

gingerbread

Gingerbread Market in the EU to Expand Moderately Over the Next Decade

IndexBox has just published a new report: ‘EU – Gingerbread – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The revenue of the gingerbread market in the European Union amounted to $704M in 2018. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

Consumption By Country in the EU

The countries with the highest volumes of gingerbread consumption in 2018 were Germany (73K tonnes), the Netherlands (40K tonnes) and Spain (35K tonnes), together comprising 53% of total consumption. These countries were followed by Italy, Poland, Belgium, France, Romania, Greece, Sweden, the Czech Republic and Austria, which together accounted for a further 35%.

From 2007 to 2018, the most notable rate of growth in terms of gingerbread consumption, amongst the main consuming countries, was attained by Italy, while gingerbread consumption for the other leaders experienced more modest paces of growth.

In value terms, Germany ($209M), Italy ($114M) and the Netherlands ($88M) were the countries with the highest levels of market value in 2018, with a combined 58% share of the total market. Poland, France, Belgium, Greece, Sweden, Austria, Romania, the Czech Republic and Spain lagged somewhat behind, together comprising a further 29%.

In 2018, the highest levels of gingerbread per capita consumption was registered in the Netherlands (2,361 kg per 1000 persons), followed by Germany (886 kg per 1000 persons), Belgium (799 kg per 1000 persons) and Spain (748 kg per 1000 persons), while the world average per capita consumption of gingerbread was estimated at 544 kg per 1000 persons.

Market Forecast 2019-2025 in the EU

Driven by rising demand for gingerbread in the European Union, the market is expected to start an upward consumption trend over the next decade. The performance of the market is forecast to increase slightly, with an anticipated CAGR of +0.8% for the period from 2018 to 2030, which is projected to bring the market volume to 304K tonnes by the end of 2030.

Production in the EU

In 2018, approx. 294K tonnes of gingerbread were produced in the European Union; flattening at the previous year. In general, gingerbread production, however, continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2014, when gingerbread production reached its peak volume of 305K tonnes. From 2015 to 2018, gingerbread production growth remained at a somewhat lower figure.

Production By Country in the EU

The countries with the highest volumes of gingerbread production in 2018 were Germany (83K tonnes), the Netherlands (45K tonnes) and Spain (37K tonnes), with a combined 56% share of total production. These countries were followed by Italy, Poland, Ireland, Belgium and Sweden, which together accounted for a further 31%.

From 2007 to 2018, the most notable rate of growth in terms of gingerbread production, amongst the main producing countries, was attained by Ireland, while gingerbread production for the other leaders experienced more modest paces of growth.

Exports in the EU

In 2018, the exports of gingerbread in the European Union stood at 79K tonnes, surging by 11% against the previous year. The total export volume increased at an average annual rate of +3.1% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. Over the period under review, gingerbread exports attained their peak figure in 2018 and are expected to retain its growth in the near future. In value terms, gingerbread exports amounted to $250M (IndexBox estimates) in 2018.

Exports by Country

Germany (18K tonnes) and Ireland (17K tonnes) represented the major exporters of gingerbread in 2018, finishing at approx. 22% and 21% of total exports, respectively. Poland (8,694 tonnes) held an 11% share (based on tonnes) of total exports, which put it in second place, followed by the UK (9.4%), Belgium (7%), the Netherlands (6.4%) and France (6.1%).

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Ireland, while exports for the other leaders experienced more modest paces of growth.

In value terms, Germany ($73M), Ireland ($43M) and Poland ($27M) constituted the countries with the highest levels of exports in 2018, with a combined 57% share of total exports.

Export Prices by Country

The gingerbread export price in the European Union stood at $3,160 per tonne in 2018, shrinking by -2.1% against the previous year. Over the period under review, the gingerbread export price continues to indicate a relatively flat trend pattern. Over the period under review, the export prices for gingerbread attained their maximum at $3,530 per tonne in 2013; however, from 2014 to 2018, export prices failed to regain their momentum.

Prices varied noticeably by the country of origin; the country with the highest price was Germany ($4,095 per tonne), while France ($1,805 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Poland, while the other leaders experienced more modest paces of growth.

Imports in the EU

In 2018, approx. 63K tonnes of gingerbread were imported in the European Union; increasing by 14% against the previous year. The total import volume increased at an average annual rate of +1.0% over the period from 2007 to 2018. In value terms, gingerbread imports stood at $190M (IndexBox estimates) in 2018.

Imports by Country

France (10,983 tonnes), the UK (8,519 tonnes) and Germany (7,870 tonnes) represented roughly 43% of total imports of gingerbread in 2018. Belgium (4,999 tonnes) ranks next in terms of the total imports with a 7.9% share, followed by Austria (6.4%), the Czech Republic (6.2%) and Romania (5%). Portugal (2,738 tonnes), Ireland (2,359 tonnes), Slovakia (2,153 tonnes), Hungary (1,899 tonnes) and Italy (1,716 tonnes) held a little share of total imports.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Portugal, while imports for the other leaders experienced more modest paces of growth.

In value terms, France ($42M), Germany ($26M) and the UK ($24M) constituted the countries with the highest levels of imports in 2018, together accounting for 49% of total imports.

Import Prices by Country

The gingerbread import price in the European Union stood at $3,008 per tonne in 2018, shrinking by -2.2% against the previous year. Overall, the gingerbread import price continues to indicate a relatively flat trend pattern.

Prices varied noticeably by the country of destination; the country with the highest price was France ($3,852 per tonne), while Belgium ($1,877 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Slovakia, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

trade

Holiday Gift-Giving in the Trade Spirit

FOR THE ROMANTIC

Tea Sampler:

Whether you favor green, black, oolong or white tea, all originate from the plant Camellia sinensis. It’s the soil, atmosphere and method of processing that confer different tastes, colors and scents. Tea traded globally is grown on large plantations in more than 30 countries. The four biggest producers are China, India, Kenya and Sri Lanka. This sampler of dissolvable “tea drops” includes citrus ginger, blueberry acai, rose earl grey, sweet peppermint, and matcha green tea made from teas sourced around the world but hand assembled by in Los Angeles, California.

FOR THE GOURMAND

Artisinal Chocolate Bars:

Cacao grows close to the equator in places like Brazil, Ecuador, Peru and Madagascar. Askinosie, a family-owned chocolatier in Springfield, Missouri offers dark chocolate bars sourced from women farmers in Tanzania. Harper Macaw of Washington, DC blends Brazilian cacao and Brazilian coffee beans roasted in Annapolis, Maryland to produce its milk chocolate Coffee Bar. Madecasse was founded by former American Peace Corps volunteers. It makes 92 percent pure dark bars in Madagascar from local cacao. Marou is truly small artisanal chocolate maker that works with small farmers to help Vietnam become the newest producer of cacao in the world.

Cashmere Sweater:

Your sweater begins as the coat of a cashmere goat. Named for their origin in the Himalayan region of Kashmir, cashmere-producing breeds also thrive in Australia and throughout China. Among the most famous are the Zalaa Ginst white goat of Mongolia and the Tibetan Plateau goat. Some $1.4 billion in cashmere garments are traded globally each year. Top manufacturers hail from Scotland and Italy, but these days you can find “cashmere-blends” on discount racks in U.S. fast fashion stores.

Homemade Hot Sauce:

If you’re going to try your hand at it, you’ll need two key ingredients – chili peppers and spices. Chili peppers grow in the United States but Capsicum annuum was originally domesticated in Mesoamerica, a region that extends from Central Mexico to Central America. After Spanish colonists returned with it to Europe, hot peppers traveled the globe swiftly on Portuguese trade routes to spice-loving India through the Portuguese-controlled port of Goa, and from there, over the Himalayas to Sichuan, China.

FOR THE PRAGMATIST

A Pair of Necessities:

Some people like receiving the essentials – from underwear to appliances. Many of our undergarments come to the United States from Sri Lanka, an island nation off the southern coast of India. Home to some 22 million people, Sri Lanka produces for major global brands like Victoria’s Secret, Gap, Nike, Tommy Hilfiger, H&M and more. The (still) popular Instant Pot is manufactured in China but was invented by Robert Wang, a former software engineer from Canada who applied his knowledge of microprocessors and sensors to the science of not burning dinner.

FOR THE TRENDY

A Small-Batch, Globe-Trotting Bourbon:

Why not support American whiskey, which has been hard hit in overseas markets by retaliatory tariffs. Jefferson’s Ocean is the brainchild of Jefferson’s, a Kentucky artisan distillery. Barrels of bourbon hitch a boat ride on a shark-tagging research vessel, crossing the equator four times, visiting over 30 ports on five continents. The temperature fluctuations, salt water air exposure, and constant motion of the ship during the journey renders a thick, dark bourbon with caramel flavors and a briny scent.

FOR THE RE-USER

Silicone Lunch Boxes and Nylon Bags:

We’ve written before about the silicon in sand which can be made into the tiny individual semiconductor chips that get embedded into our globally trade devices. Silicone, on the other hand, is a rubberlike plastic increasingly used in food storage, transportation and reheating, due to its low toxicity and high heat resistance. Food52 makes a colorful container with a silicone sleeve that is, according to the manufacturer, “just right for layering miso salmon and spinach over black rice.” No bag lunch for the modern hipster.

Baggu is a re-usable shopping bag made from lightweight ripstop nylon that comes in a variety of bold colors and prints. The synthetic polymer known as nylon was first produced in United States, born of the need to find alternatives to silk and hemp for parachutes in World War II. Today, China is the largest exporter of nylon.

FOR THE “VSCO GIRL”

If you’re not familiar with the term, you probably don’t have a teenager in your home. VSCO is a popular photo editing app that many social sharers use before posting on Instagram or other platforms. The term “VSCO girl” has been adopted to describe some of the latest teen fashion trends and must-haves for the middle and high school hallways.

Here are some of the essentials you might give the VSCO girl in your life, beginning with a Fjullraven Swedish backpack to put it all in. Add to it some Glossier Lip Balms if you care about transparency in the global supply chain of your makeup, a Hydroflask made of pro-grade 18/8 stainless steel (are there tariffs on that stainless steel?), some Pura Vida jewelry from Costa Rica, and an Instax camera from Japanese maker Fujifilm. Where do VSCO girls hang out when they aren’t in school? On TikTok, of course. There are some 422.4 million videos on Chinese app TikTok tagged #vscogirl.

Whatever you buy for the holidays this year, chances are, there’s a global trade aspect to your gift-gifting. As we like to say at TradeVistas, “see the trade in everything.” Happy holidays.

Note: Neither the author nor TradeVistas’ sponsor endorses the above-mentioned products. We merely seek to illustrate the global trade dimension in popular gifts this season.

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Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.

spenders

‘Tis the Season for Big Spenders

Now that we are at the height of holiday festivities, shopping, and celebrations, we are seeing purchases begin to rack up for employees. Are any sneaking into their expenses?

We looked at millions of expenses from our aggregated, anonymized, direct customer data from December of last year to identify trends in unauthorized (as in, out-of-policy) spend being submitted for reimbursement during the holiday season. Below are our findings.

Gifts

According to the National Retail Federation, spending on gifts is expected to surpass $730B this year, an all-time high. So it’s no surprise that it was also the biggest area of unauthorized spend last year. In fact, our AI identified over $783,000 of out-of-policy gifts, which is nearly 9x the monthly average of out-of-policy gift spend we caught the rest of the year. In contrast, the approved gift spend in December was $134,000.

Meals

According to the Deloitte 2019 holiday retail survey, holiday shoppers are spending significantly more on experiences, including socializing with family and friends. This trend is consistent with our data on unauthorized business meals, which in December of last year spiked to $52M, which is 7x higher than the monthly average of the rest of the year.

Alcohol

Americans double their drinking during the holidays, according to BeverageDaily. Even more dramatically, we saw unauthorized alcohol spending in December of last year quintuple from the average for the rest of the months. These aren’t small expenses, either. The average incident of unauthorized alcohol spend was $573, which is 6x the monthly average of unauthorized alcohol spend during the rest of the year, and 12x the amount of authorized alcohol spend in December.

Gratuities

According to a Consumer Report survey, 60 percent of Americans tipped their service providers during the holidays last year, averaging $45 per person. While the holidays are certainly an appropriate time to show your appreciation, unauthorized gratuities in December of last year was a whopping 109x higher than the monthly average of unauthorized gratuity spend.

While we don’t recommend extinguishing the atmosphere of holiday cheer with a strict expense policy this season (there’s certainly a benefit to rewarding employees and adopting expense policies to recognize their hard work), there’s a limit to reasonable expenses on the company dime. AppZen gives you 100 percent visibility into your expenses and flags unauthorized, out-of-policy spend to your attention, so even your finance team can relax and enjoy the holiday season.

This does not represent all gift spend, just ones that are identified as out-of-policy

This article originally appeared here. Republished with permission.

shopping

American and Chinese Consumers are Shopping Like There’s No Trade War

What Trade War?

If shoppers are worried about the U.S.-China trade war, it’s not showing up yet in measures of their buying confidence or holiday retail sales.

We are more than a year into dueling tariffs between the United States and China, and we know that tariffs add costs to supply chains, but how much of those costs are passed on the consumer depends on decisions by manufacturers, buyers and retailers as well as the “import-intensity” of the products we buy.

So far, if prices have risen on consumer products, it’s not dampening American appetites to buy. And Chinese consumers don’t rely to a great degree on imports in general, so China’s retaliatory tariffs on U.S. imports don’t appear to be the biggest factor in their personal spending either.

Spending and the U.S. Economy

At the end of the third quarter, the Bureau of Economic Analysis reported that U.S. consumer spending was on track for $14.67 trillion this year, reaching an all-time high.

Personal expenditures make up 68 percent of the U.S. economy, and it’s consumer spending that’s keeping growth of our economy from slowing further. (By comparison, our “negative net exports” or total exports minus total imports, comprise five percent of U.S. GDP.)

Two-thirds of spending is on services such as housing and health care, which are largely impervious to the trade war. The remaining third is spent on non-durable goods such as clothing and groceries, and on durable goods such as cars and appliances.

Brimming with Confidence

The Conference Board’s Consumer Confidence Index is a monthly report on consumer attitudes and buying intentions. Despite analysts’ expectations that concerns related to trade disputes would cause U.S. consumers to become cautious, the index shows a trend of rising consumer confidence since 2009.

Breaking Records Online

Retail sales figures tell us whether that confidence is translating into spending. Indeed, American consumers are still filling their real and virtual shopping carts to the brim.

According to the National Retail Federation (NRF), more than 165 million people were expected to shop over the five-day Thanksgiving holiday weekend. Online sales for last holiday weekend are already being reported and appear to be breaking records.

Americans spent $7.4 billion online on Black Friday, up 19.6 percent from last year. We spent another $3.6 billion on Small Business Saturday, up 18 percent from last year. And while surfing from our desks at work, Americans spent $9.2 billon on Cyber Monday, up 16.9 percent from last year. More than half of Americans surveyed by NRF said they start their holiday shopping the first week of November. Online sales for November came in at a whopping $72.1 billion.

Chinese Consumers Outspent Us All

Cyber Monday is so successful in driving online sales in the United States that Canada, the UK and Germany have all adopted Cyber Monday to kick off their holiday shopping seasons. Australia launched “Click Frenzy” day. The Netherlands’ equivalent is linked to the December 5 Sinterklaas holiday.

But hands down, the world’s largest 24-hour online shopping day goes to China’s Singles Day held on November 11 annually. This year, Chinese online shoppers bought $38.3 billion on Singles Day alone. Think of it this way – that’s more than $1 billion every hour.

This is not a one-day phenomenon. If you were to overlay China’s consumer confidence index with that of the United States, they would look similar. Despite being slightly lower for China and with a dip in 2016 that we didn’t see in the United States, consumer confidence rose between 2014 and remained high in 2019, trade war notwithstanding. In mid-2019, retail spending in China surpassed retail spending in the United States for this first time.

Retail Spending in China Exceeds US

Beyond the Tariff Headlines

Financial analysts are watching China’s consumer spending carefully amidst the trade war. Many said this summer’s drop in car purchases was a harbinger that shoppers are growing wary, but the slowdown also coincided with the end of big discounts. Others say retail sales actually underestimate the strength of China’s overall consumer spending because those numbers offer just a partial picture of personal spending on goods and services, which include large expenditures on healthcare, education and leisure activities.

For this reason, some prominent Chinese investors are nonplussed by the Trump Administration’s tariffs. They look at a decline in certain manufacturing and exports as a structural shift in China’s economy – an “economic rebalancing” – that began long before the current trade war. In their view, household consumption will drive most of China’s future economic growth, and China’s consumer spending is not very dependent on imports.

According to World Bank data, consumer imports comprise just 13 percent of China’s overall imports. Most of the large multinational consumer goods companies now produce in China for the Chinese consumer. According to McKinsey analysis, across key consumer categories including personal digital devices and personal care products, Chinese brands have become credible competitors to foreign brands, acquiring greater market share – and shielding Chinese consumers from tariffs on U.S. imports.

Consumer Spending to Play Bigger Role in China’s Growth

Consumption is playing a much larger role in China’s economic growth than just a few years ago. In 2011, consumer spending accounted for less than 50 percent of China’s GDP growth. Last year, it accounted for 76 percent of GDP growth, outpacing both manufacturing investment and exports.

In fact, China’s total exports of goods and services as a percentage of GDP has dropped from a high of 36 percent in 2006 to 19.5 percent in 2018, with exports to the United States at just four percent.

That why China’s central bank is also monitoring consumer sentiment. In recently released results from its biennial survey of 18,600 residents in 31 provinces, nearly 80 percent of respondents expressed caution about spending and a preference for saving.

China’s politburo has directed the government to focus on turning up the tap of consumer spending by China’s growing urban middle class and to kick-start spending in rural areas. The government already cut personal income taxes and began offering subsidies for large ticket energy-saving home appliances and energy efficient vehicles. The government is expected to announce more measures in the coming months designed to goose household spending.

WB Chart Title China Exports as % of GDP

Business is Ill at Ease

Economists worry the trade war is causing a drag on economic growth, not just in the United States and China but globally. Businesses say the trade war with its escalating tariffs is a “wild card” in their planning. Uncertainty is causing them to hold back on capital expenditures.

It’s looking less likely the United States and China will agree to a “Phase 1” trade deal by the end of the year, but even if they do, the partial deal may not be enough to restore business confidence. If businesses continue to hold back on investments and reduce inventories, it could start to negatively impact jobs and incomes. This may be particularly true in China where a larger portion of the population is dependent on manufacturing jobs.

Consumers Keep Calm and Shop On

Meanwhile, holiday shopping is in full swing. Some holiday merchandise is already subject to tariffs on Chinese imports, but the tariffs the United States plans to impose on December 15 will affect many more consumer products. If imposed, buyers and retailers will have to decide how much cost to pass on to their suppliers and consumers in the coming year.

For now, shoppers are keeping calm and shopping on with resilience. But as a last line of defense against slowing growth, their confidence can be fragile. Where the trade war is concerned, buyer beware.

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Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.

menswear

U.S. Menswear Market – Rising Work Clothes Consumption Buoys Current Market Growth

IndexBox has just published a new report: ‘U.S. Men’s And Boys’ Cut And Sew Apparel Market. Analysis And Forecast to 2025′. Here is a summary of the report’s key findings.

The revenue of the menswear market in the U.S. amounted to $2.9B in 2018, jumping by 5.6% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +1.5% over the period from 2013 to 2018; the trend pattern remained consistent, with only minor fluctuations being recorded over the period under review. The pace of growth was the most pronounced in 2018, when the market value increased by 5.6% against the previous year. In that year, the menswear market reached its peak level, and is likely to continue its growth in the immediate term.

Menswear Production in the U.S.

In value terms, menswear production totaled $1.7B in 2018. The total output value increased at an average annual rate of +1.7% from 2013 to 2018; the trend pattern remained consistent, with only minor fluctuations being observed in certain years. The pace of growth was the most pronounced in 2015, with an increase of 5.3% y-o-y.

Exports from the U.S.

In 2018, menswear exports from the U.S. totaled 39 tonnes, waning by -25.9% against the previous year. Overall, menswear exports continue to indicate a deep contraction. The growth pace was the most rapid in 2016, with an increase of 83% year-to-year. In that year, menswear exports reached their peak of 82 tonnes. From 2017 to 2018, the growth of menswear exports remained at a lower figure. In value terms, menswear exports totaled $416K (IndexBox estimates) in 2018. Over the period under review, menswear exports continue to indicate an abrupt drop. The pace of growth was the most pronounced in 2016, when exports increased by 110% y-o-y. In that year, menswear exports attained their peak of $1.1M. From 2017 to 2018, the growth of menswear exports failed to regain its momentum.

Exports by Country

Belgium (10 tonnes), New Zealand (5.8 tonnes) and Jamaica (4.3 tonnes) were the main destinations of menswear exports from the U.S., with a combined 52% share of total exports.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Belgium (+1,931.7% per year), while the other leaders experienced more modest paces of growth.

In value terms, Jamaica ($122K) emerged as the key foreign market for menswear exports from the U.S., comprising 29% of total menswear exports. The second position in the ranking was occupied by New Zealand ($44K), with a 11% share of total exports. It was followed by the UK, with a 9.1% share.

Export Prices by Country

The average menswear export price stood at $11 per kg in 2018, declining by -16.1% against the previous year. In general, the menswear export price continues to indicate a drastic deduction. Export prices varied noticeably by the country of destination; the country with the highest export price was Jamaica ($28 per kg), while the average price for exports to Belgium ($1 per kg) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of export prices was recorded for supplies to New Zealand, while the export prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

Menswear imports into the U.S. totaled 70K tonnes in 2018, surging by 9.6% against the previous year. In value terms, menswear imports amounted to $785M (IndexBox estimates) in 2018.

Imports by Country

In 2018, China (30K tonnes) constituted the largest supplier of menswear to the U.S., accounting for a 42% share of total imports. Moreover, menswear imports from China exceeded the figures recorded by the second largest supplier, Honduras (9.4K tonnes), threefold. Viet Nam (9.1K tonnes) ranked third in terms of total imports with a 13% share.

From 2013 to 2018, the average annual rate of growth in terms of volume from China totaled -2.2%. The remaining supplying countries recorded the following average annual rates of imports growth: Honduras (+6.2% per year) and Viet Nam (+9.8% per year).

In value terms, China ($285M) constituted the largest supplier of menswear to the U.S., comprising 36% of total menswear imports. The second position in the ranking was occupied by Viet Nam ($136M), with a 17% share of total imports. It was followed by Honduras, with a 9.5% share.

Import Prices by Country

The average menswear import price stood at $11 per kg in 2018, remaining stable against the previous year. Over the period under review, the menswear import price, however, continues to indicate a mild curtailment. The growth pace was the most rapid in 2016, when the average import price increased by 0.4% y-o-y. Over the period under review, the average import prices for men’s and boys’ cut and sew apparel attained their peak figure at $12 per kg in 2013; however, from 2014 to 2018, import prices stood at a somewhat lower figure.

There were significant differences in the average import prices amongst the major supplying countries. In 2018, the country with the highest import price was Jordan ($23 per kg), while the price for Pakistan ($5.9 per kg) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of import prices was attained by Cambodia, while the import prices for the other major suppliers experienced a decline.

Source: IndexBox AI Platform

generation

What Buying Habits Tell Marketers About Each Generation

Each generation has unique experiences, lifestyles, and demographics that influence their buying behaviors, financial experts say. And studies show these distinguishing factors often lead to different spending habits between generations.
As a result, many companies are reaching out to consumers and trying to understand — and gain the attention of — these diverse buyers, says Gui Costin (www.guicostin.com), an entrepreneur, consultant and author of Millennials Are Not Aliens.
“This type of multi-generational marketing is the practice of appealing to the unique needs and behaviors of individuals within different generational groups,” says Costin. “In terms of finding and retaining buyers, companies cannot underestimate those generational differences.”
Costin discusses how the buying habits of different generations are influenced by environmental factors and how businesses must focus their marketing efforts accordingly:
Millennials. Now comprising the highest percentage of the workforce, this generation (born roughly from 1981 to 1995) receives considerable marketing attention. Many millennials grew up immersed in the digital world — a big difference from previous generations — and they think globally. “Attract this group early and earn its loyalty by appealing to their belief that they can make the future better,” Costin says. “Traditional mass marketing approaches do not work well with younger consumers. Be sure they know that your organization’s mission speaks to a purpose greater than the bottom line, e.g., globalization and climate change. Give them systematic feedback because they value positive reinforcement at accelerated rates and want more input.” 
Generation X. Following the baby boomers and preceding the millennials, their tastes are different from previous generations. “Because they have greater financial restraints, they often shop at value-oriented retailers,” Costin says. “On the other hand, they have a reputation of being incredibly disloyal to brands and companies. Generation Xers like initiatives that will make things more useful and practical. They demand trust to the extent that if your organization does not follow through once, then you are likely to lose them.”
Baby Boomers. This demographic group, with many now in retirement or nearing it, includes those born from 1946 to 1964. Health is a major concern, and change is not something they embrace. “They appreciate options and want quick fixes that require little change and instant improvement,” Costin says. “They do not like bureaucracy — but give them a cause to fight for and they will give their all. Focus on building value and they will be less price-sensitive. While this group may be aging, they’re focused on breaking the mold of what 60 and beyond looks like.” 
The Silent Generation. Born between 1925 and 1945, this group represents the oldest Americans and, Costin says, typically is labeled with traditional values such as discipline, self-denial, hard work, conformity, and financial conservatism. “It’s important to earn their trust,” says Costin, “as they believe that a person’s word is his or her bond. Patriotism, team-building, and sacrifice for the common good are appealing to this generation. As a group, they aren’t particularly interested in the information age; however, the younger members of this generation are one of the fastest-growing groups of internet users.”
“Communicating with customers in different generations can be challenging,” Costin says. “However, all generations appreciate honesty and authenticity. As environmental factors change, transparency and genuine interactions remain important to everyone.”

Gui Costin (www.guicostin.com), author of the No. 1 Bestseller Millennials Are Not Aliens, is an entrepreneur, and founder of Dakota, a company that sells and markets institutional investment strategies. Dakota is also the creator of two software products: Draft, a database that contains a highly curated group of qualified institutional investors; and Stage, a content platform built for institutional due diligence analysts where they can learn an in-depth amount about a variety of investment strategies without having to initially talk to someone. Dakota’s mission is to level the playing field for boutique investment managers so they can compete with bigger, more well-resourced investment firms.