Late delivery of a container of chairs is an annoyance. Late delivery of a container of seasonal clothing is a non-starter. In fashion logistics, short selling seasons demand adherence to ship-time commitments from Asia, where most garments are made. The clock starts ticking the moment the purchase order (P.O) is agreed.
That’s the reality of fashion logistics. The 3-week-late chair retains its value. The 3-week-late bathing suit could be practically worthless after its prime selling season.
That’s why the penalties for late deliveries are so stiff from fashion retailers. Delays often trigger a chargeback, which is basically a negotiated reduction on a retailer’s invoice payment for the P.O that experienced a delay.
Costly chargebacks aren’t the worst result for a garment manufacturer. On a bad day, news of a significant delay may lead a retailer to cancel the order completely. Either way – chargeback or cancellation – manufacturers eat the cost.
If a retailer has two months to sell an item, a two-week transportation-related delay cuts into this selling season.
But what if the delay is caused by issues the manufacturer cannot control, like a port labor slowdown or weather?
“Not my problem” is the retailers’ typical response. That’s the cold reality for garment manufacturers and their freight forwarding and carrier partners.
Another “not-my-problem” cost that manufacturers must eat is carrier rate hikes that occur between when the P.O. is agreed and the time the container actually ships. Carriers’ General Rate Increases (GRIs) don’t consider their customers’ signed P.O.s when issuing the increase.
In fashion logistics, buyers have the power. It’s part of the reason that the average tenure of a garment manufacturer is just seven years.
Freight capacity is key in apparel logistics
The ability to source adequate freight capacity is critical for any company with a global supply chain. But it’s even more critical in time-sensitive apparel supply chains. When containers are scarce, you need the power of a strong freight forwarder to get the space you require to ship containers on time.
That’s one of the values of forging a long-term partnership with a fashion logistics freight forwarder rather than taking a shipment-by-shipment approach using spot market rates. Dimerco Express Group, for instance, is a top freight forwarder by volume with all major Asia-based carriers, which translates into business leverage when carriers must decide where to parse out high-demand cargo space.
The value of a resourceful apparel 3PL goes far beyond securing freight capacity, according Dimerco’s Alexander King, who runs the company’s New York office which services fashion industry customers.
“Occasional disruptions are a reality for complex supply chains that may run from China for piece goods like buttons and zippers to Southeast Asian factories to produce the finished goods and then on to the USA or other end market for final sale,” he says. “A forwarder must be agile and adjust on the fly to minimize delays.”
King cites a recent example of a five-container shipment where two of the containers were rolled at China’s Ningbo Port. ”Dimerco teams in Vietnam, Hong Kong, and the USA coordinated directly with our local steamship line contacts so our containers could be loaded first on the next available sailing.”
Agile solutions are particularly important to garment manufacturers because lost time is lost revenue. Just recently, disruptions linked to production delays and Panama Canal and Red Sea issues have resulted in the following alternative Dimerco solutions:
- shifting from ocean to air freight
- re-routing containers to the U.S. West Coast and sending them east via rail
- transloading containers in LA and trucking them inland with direct, team-driver service
Apparel industry logistics services require real-time monitoring of the ship schedule, genuine international shipping expertise to develop the right alternate solutions, and the ability to act fast to execute changes.
A word on fast fashion logistics
Fast fashion is a subset of the apparel industry that has even steeper delivery requirements. From a ship-time perspective, it’s basically apparel logistics on steroids.
Sometimes called “fashion on demand,” fast fashion collections are added weekly or monthly to stores in response to trends set by designers or celebrity culture. This compares to a traditional apparel supply chain with a three-season cycle per calendar year.
Obviously, that puts even more pressure to design, produce, and ship items fast while the trend is hot.
A fast fashion supply chain emphasizes speed over clothing quality. Items are made faster and cheaper for fashion-forward consumers on a budget who may want to mimic Taylor Swift’s latest fashion preference – but at one-tenth of the price.
From a logistics perspective, use of air freight services is much more prevalent in fast fashion. Also, fashion logistics freight forwarders must be even more nimble in making needed adjustments to shipping strategies to adhere to precise replenishment schedules. Buyers at H&M, Zara, Forever 21 and other such retailers won’t stand for anything less.
Need fashion logistics services?
You wouldn’t pay full price for two-day-old bread at a bakery. Likewise, apparel retailers won’t pay full price for delayed shipments that shrink their selling season.
It doesn’t matter that the bread is made in the bakery’s own kitchen while the apparel is produced 8,000 miles away in Southeast Asia. The necessity of on-time delivery to meet a short selling window rules the day in both instances.
Look for fashion logistics forwarders that understand the unique requirements of apparel supply chains and whose operating models are flexible and agile enough to meet these unique demands.
Do you need fashion logistics services? Dimerco Express Group specializes in serving companies, including apparel manufacturers, whose supply chains run through Asia-Pac. Contact us today to start a conversation.
