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About Julija A.

Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.

Blog posts

The COVID-19 pandemic has created severe congestion in the shipping industry, with dozens of cargo ships anchored just off the coast of California unable to offload their cargo. The pandemic disrupted the global supply chain at the start of 2020. As a result, factories were closed across China, meaning they weren’t able to deliver goods to the American market. At the same time, strict lockdowns changed shopping habits drastically. Demand for home fitness equipment, consumer electronics, and home improvement gear increased orders from US companies to Asian factories, creating congestion in ports and freight transport centers. More than 40 freighters were forced to wait their turn to dock into the LA and Long Beach ports in January. The problem has continued to this day and shows no signs of subsiding. Because of these delays, businesses have had to wait months to receive goods from China instead of weeks, as was the case before the pandemic. “With this type of backlog, it will take several weeks to work through that. It doesn’t go away. And new ships are sailing to the US even as we speak,” Shanton Wilcox from PA Consulting said. According to Kip Louttit, executive director of the Marine Exchange of Southern California, the problem extends to dry land. That’s because more than 8,000 trucks are required to unload a single freight ship. “When you have more cargo, you have a less efficient cargo moving system. The pandemic itself is also slowing down the flow of goods, sidelining workers in warehouses at the ports,” Louttit said. This supply distribution bottleneck is more disruptive for smaller businesses that can’t afford air freight. Larger companies that can move their production away from China have been less likely to feel the effects. Supply chain impediments also have an effect on exports, as unloaded containers are sent without being filled with US goods. Delays in container scheduling result in manufacturers having to wait between four and six weeks before loading their goods onto the ship.

By Julija A. March 26,2021

Fraudsters are exploiting the COVID-19 pandemic and have stolen billions in unemployment benefits, according to a computer security firm. ID.me is a company that verifies the identities of approximately 75% of the workforce in 19 states. It reports that $200 billion worth of federal assistance for unemployment benefits during the pandemic may have been fraudulent. Based on data relating to fraud rates before the pandemic, the official government estimate of $63 billion is three times smaller than ID.me’s estimate. Criminals commit fraud by stealing people’s personal data in 20% of cases. The other most common types of fraud are committed through social engineering (10%) and face matching (2.5%), where criminals attempt to use an image, video, or “mask” of their victim. ID.me says at least 30% of claims to the Pandemic Unemployment Assistance program, which the Federal Government unrolled to assist self-employed Americans, have been fraudulent. After the Paycheck Protection Program, unemployment benefits, and stimulus checks, fraud relating to unemployment benefits is the fourth “largest spending program,” according to the American Enterprise Institute. The federal government has spent $557 billion in total on unemployment benefits, and as much as 36% of that could be the result of fraudulent claims. Even the original government estimate of $63 billion and the 10% error rate surpasses the funds allocated to food stamps or vaccine and treatment development. The states with the highest unemployment benefits - California, Washington, and Massachusetts - are the primary targets for fraud. According to government officials, out of $11.4 billion in unemployment benefits paid in California during the pandemic, 10% has involved fraud, while another 17% is under investigation. Washington state has identified 122,000 suspected and fraudulent claims for unemployment benefits, amounting to $600 million, according to a report filed by the Office of the Washington State Auditor. The Massachusetts Department of Unemployment Assistance has reported that $687 million in claims have been fraudulent. The American Rescue Plan was recently passed by congress, allocating $209 billion to unemployment out of the total $1.8 trillion. A further $94.3 billion was allocated to expanding eligibility for COVID-19 support payments. Currently, 18.2 million Americans are collecting unemployment aid, while 770,000 applied for assistance the first time in March this year.

By Julija A. March 26,2021

After getting stuck in the Suez Canal on Tuesday and holding up approximately $9 billion in goods per day, the cargo ship Ever Given has finally been partially refloated. This will soon allow the 367 ships stranded by the blockage to continue on their journeys. The Ever Given, a 1,400-foot long ship, got jammed diagonally across the Suez Canal on Tuesday, reportedly due to a strong windstorm that caused low visibility. Efforts to move the gigantic ship began soon after, with a total of 14 tugboats working on getting it afloat. After these efforts appeared unsuccessful, the Egyptian government proposed offloading some of the ship’s 18,300 containers, which would have added a couple of weeks to the process. "If it goes more than five days, then we start to see our schedule back up. I'm sure other ships are on a much tighter schedule than we were... It's going to affect shipping schedules all around the world," Joe Reynolds, chief engineer at Maersk Ohio, told the BBC in an interview on Saturday. Luckily, even though efforts to move the ship had seemed futile for several days, Inchcape, a maritime service provider, has reported today that the ship has been successfully re-floated and is secured at the moment. The Suez Canal Authority said the efforts have successfully moved the ship 334 feet away from the shore and toward the middle of the waterway. The overall damage is yet to be definitively calculated. However, it’s estimated that each day is costing more than $9 billion due to goods being stuck in containers in the canal, which amounts to approximately $400 million an hour. An investigation into how the incident happened is also underway. Some preliminary results suggest that faulty equipment or human error could be to blame, instead of a windstorm, as was first thought. With about 12% of global trade heading through the Suez Canal, representing the shortest sea link between Asia and Europe, the stranded ship has caused a catastrophic blockage in maritime transport. With the canal blocked, the only alternative route for 367 ships currently waiting for the canal to open is going around the Cape of Good Hope, which would add an additional two weeks to the journey and increase the cost of both fuel and time for such a trip. However, the Ever Given’s sister ship, the Ever Greet, was one of the first ships to reroute. The jam may yet force ships to change their route to travel around Africa, which not only makes the journey significantly longer and costlier, but also increases ships’ exposure to potential pirate attacks. While many say that the pirate threat along the coast of Somalia has been blown out of proportion and is now under control, it’s still a route many would prefer not to take. Of course, while almost everyone will welcome the canal’s reopening, the stranded ship has already become an internet sensation, with games and memes exploding on social media networks. It’s safe to say that solving this blockage, especially with the disruption brought on by COVID-19 restrictions and the rise in shipping rates for oil product tankers, is of paramount importance for returning global supply chains to something approaching normal.

By Julija A. March 29,2021

On Thursday, NASA announced it would be investing more than $45 million into 365 US-based small businesses through its Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research (STTR) programs. NASA’s SBIR program encourages small businesses to engage in R&D for new technology that can be commercialized. Small businesses that meet the R&D requirements will be developing products in the fields of cybersecurity, computing, satellite communication networks, and so on. The Space Technology Mission Directorate’s associate administrator, Jim Reuter, said: “At NASA, we recognize that small businesses are facing unprecedented challenges due to the pandemic.” NASA awarded the initial round of funding in 2021 to 289 companies and 47 research centers. Phase I of SBIR is reserved for small businesses and lasts for six months, while Phase I of STTR will go on for thirteen months, and it’s aimed at small companies partnering with a research institution. After the first phase, businesses can reapply with their proposals for additional funding opportunities at NASA. The companies selected based on their technical and commercial potential all operate in the field of human and spacefaring innovation. Many of these organizations are minority- or veteran-owned businesses, minority-serving institutions, and other types of underrepresented research establishments. Some of the awardees, such as Syrnatec Inc., focus on “enabling the next generation of efficient high-power green technology in space and on Earth.” Another one, Innoveering, is working on “developing a wind sensor to enable a flight path control system for high-altitude scientific balloon operations.” The companies are a welcome addition to NASA’s R&D program, and some of them are bound to make a long-lasting impact on our future. “We are excited to have a large cohort of new small businesses join the NASA family via the SBIR/STTR program,” Reuters concluded.

By Julija A. March 30,2021

Israeli-Singaporian company Trax secured a $640 million Series E funding round. The primary investors during this round were led by SoftBank Vision Fund 2, along with tech-oriented funds under BlackRock. More prominent investors included OMERS, one of Canada’s largest defined benefit pension plans, and Sony Innovation Fund. The company focuses on helping retailers improve the shopping experience by applying digital technologies, accelerating thus these businesses’ digital transformation. Trax is a pioneer in AI-driven, autonomous shelf-monitoring solutions that provide merchandising services at an enterprise level. The tech is used to help retailers keep products stocked by using an on-demand crowd marketplace. Trex technology effectively digitalizes department stores by using AI and collected data to automate inventory management. In the words of the company’s CEO, Justin Behar, “Trax has been building its sophisticated, AI-powered, retail cloud platform for more than a decade. We began our journey by creating novel computer vision solutions for retail and have since broadened our capabilities to serve the evolving needs of the modern retail ecosystem.” Despite the potential IPO (initial public offering) and substantial funding, the company fired dozens of employees in 2020 and is supposedly planning more layoffs this year. According to local sources, the company already fired about 120 of its workers in Israel shortly after the onset of the COVID-19 pandemic. Trax currently employs around 1,000 workers, operates in more than 50 countries, and has about 175 clients. “We are witnessing the retail industry adopt digital technologies at an unprecedented pace and scale. Despite the turbulence of 2020, we made tremendous strides in our business because of the hard work, dedication, and team spirit at Trax,” stated Joel Bar-El, Trax co-founder and executive chairman. In preparation for the IPO at the New York Stock Exchange (NYSE), the company hopes for a $2 billion valuation and going public in the first half of 2021.

By Julija A. April 16,2021

Retail sales surged 9.8% in March as a fresh batch of stimulus checks fuels consumer spending. Other factors contributing to the economic recovery include the re-opening of businesses, better jobless claims, vaccination efforts, and warmer weather. According to the Commerce Department’s report, the latest gains are being led by sporting goods, clothing, bars, and restaurants. The 9.8% spike even exceeded estimates by Dow Jones of a 6.1% gain. The $1,400 stimulus checks started making their way to American households in mid-March. As part of the Covid-19 recovery program, the federal government passed the $1.9 trillion American Rescue Plan Act, with $1,400 stimulus checks driving the rise in spending following extensive closures and lockdowns. People are once again thinking about getting order checks. The software firm Cortera reported that spending was up 14.5% in March compared to last year.Mark Zandi, a chief economist from Moody Analytics, had previously said that spending increased across most retail segments, with May expected to be another record-high month. Bank of America also showed a credit card spending spike in March with a 67% increase over a seven-day period that ended on April 3. Economic tides have improved with the consumer confidence index increasing to 109.7 in March, the most substantial monthly gain since April 2003. Consumers managed to increase spending and savings, with rates expected to be at least 20% in March. Some might already be thinking about opening a small business as retail sales soar by partnering with the best banks. Meanwhile, the Labor Department reported the lowest level of new jobless claims since the start of the Covid-19 pandemic, with 576,000 people filing for unemployment insurance. This appears to have reassured consumers, who in turn boosted sales. The brighter outlook may boost other sectors and drive up the number of people getting a business checking account. 

By Julija A. April 16,2021

Coinbase made its debut on Nasdaq on Wednesday, closing the day with a market cap of around $62 billion. That makes it the seventh-largest new US listing, right behind Uber’s market cap of $69.9 billion. The success of Coinbase signals a bright future for the crypto market. It’s also worth noting that companies and individuals that rely on crypto mining are increasingly looking to remote desktop software. Coinbase is a start-up based in San Francisco that allows people to buy and sell cryptocurrencies. It’s the first crypto start-up to go public on the US stock market, with proponents of digital currencies describing this moment as proof of the industry’s strength. Coinbase started the day at $381 a share, which is significantly higher than the $250 reference price set by Nasdaq. It then shot up to $429 before dropping to a low of $310 and finally closing at $328.28. The listing offers a great avenue to invest in crypto for both young, tech-savvy investors who use tools like task management software as well as more traditional investors who had reservations about buying risky digital currencies. The success of this crypto exchange eclipsed giants like DoorDash, Kraft Foods, Palm, General Motors, and Visa. It even surpassed Goldman Sachs’ $31 billion listings in 1999. If Coinbase’s listing remained at $465, it would have surpassed Airbnb’s $86.5 billion listings. It goes without saying that such companies must have a foolproof online legal service. If Coinbase’s price of $328 per share endures, its market cap might increase to $83 billion. The company, which has 1700 employees and 56 million registered users, reported a net profit between $730 million and $800 million for the first three months of the year, bringing in $1.8 billion in revenue.

By Julija A. April 16,2021

As the total US student debt has exceeded $1.8 trillion, more than a million people have signed an online petition, relying on President Biden’s statement during his campaign trail to forgive some of the student debt piling up. The numbers disclosed in the petition are more than worrisome: Of almost 45.4 million people who took a student loan, approximately 80% were unable to pay it back, even before the pandemic. Due to outstanding student debt taken in 2004, default rates stand at 40%, even though students in 2004 took much less money than students these days have to take to cover their studying expenses. By the same metric, the current borrowers’ rate is expected to exceed 75%, which is approximately four times the default rate of subprime home mortgages. As more and more people visit job posting sites since the COVID-19 struck, the need for a permanent solution to ever-growing student debt is becoming evident. There were several attempts to remedy the effect the pandemic had on student loan borrowers. The CARES Act, which granted people a break from their payments until September 2020, was helpful, but not nearly enough, as shown by the call from House Democrats, which, under the HEROES Act, asks to prolong the pause in payments for another year. Biden relied on forgiving student loans in his election campaign. The last month’s news of him asking his Education Secretary to see whether he can legally cancel up to either $10,000 or $50,000 of student debt stirred new hopes, but the main question remains: Is the president able to take action independently and cancel student debt without legislation? It is safe to say that Democrats still hold a fragile majority in Congress, and many wonder whether it would agree to forgive the loans even if it came to it. A. Wayne Johnson, former COO of the Office of Federal Student Aid under Trump’s government, asked for student loan forgiveness of $50,000 per borrower. However, the creators of the petition say there is no political background to it and that most borrowers identify as politically independent. While some argue that canceling student debt would be unfair to those who budgeted and paid off their debt or never took loans in the first place, it is painfully apparent that $1.8 trillion in outstanding debt is a problem that demands some solution. The other side to the argument is the claim that forgiving student debt would be stimulating for the economy. It would increase the borrowing capacity of a vast number of people, who are likely to use the money for buying homes instead of paying off student debt. This money would also benefit up-and-coming entrepreneurs who are currently either getting into more debt or having to rely on alternative funding methods, such as crowdfunding, to kick-start their businesses. This petition seems to be only the beginning of a movement toward forgiving student loans. It is unlikely to subside, as other supporters, borrowers, and politicians are starting to support this movement and advocate for the president to follow through on his promises to cancel student debt.

By Julija A. May 11,2021