Afternoon Coffee: Fed’s New Stance Bolsters Market; U.S. Firms Squeezing Suppliers in China as Tariffs Set In

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In a speech Wednesday, Federal Reserve Chairman Jerome Powell changed his opinion on interest rates, saying the current level is “just below” neutral — a big change from his October statement that rates were “a long way” from neutral, CNBC reports. Markets reacted favorable to the speech Wednesday. The comments last month raised concerns that interest rates may go much higher and slow down economic growth.

U.S. Firms React in China

Get an update on how companies like Amazon, Walmart and Target are handling the difficult trade climate with China, where its manufacturers are feeling the strain and seeking new customers outside the U.S., The Wall Street Journal reports.

“Big American retailers are getting tough with Chinese suppliers as import tariffs bite, cutting orders, negotiating down prices and demanding faster turnarounds,” the Journal reports.

This KPI Could Help on Free Shipping

When companies try to compete against Amazon Prime’s free two-day shipping, they can lose profits by having to ship multiple orders, Supply Chain Dive says in a report that looks at an area where businesses aren’t often considering: the KPI called “shipment to order.”

One expert said many retailers “aren't sophisticated enough in their sales process to have thought the metric through. In the rush to offer and figure out e-commerce and omnichannel sales, most retailers don’t have a good understanding of how much stock is in particular stores compared to amounts sold online and through buy online pick up in store.”

Another expert said the KPI doesn’t seem to have a high profile.

"From my research, I haven’t found [shipment to order] to be an easy number to find. Retailers aren't talking loudly about it," Charles Dimov, vice president of marketing at OrderDynamics told Supply Chain Dive.

The story goes on to look at logistics solutions that can help businesses.

IKEA’s Profits Fall 26%

And finally, an update on business: IKEA’s yearly profits dropped by 26% as it retooled its business model by investing heavily in online sales, new delivery methods and a plan to open stores in big cities, not suburbs, Reuters reports. The size of the investment led to the decline, despite nearly 5% growth in retail sales, Reuters reports.

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