Suppliers are concerned that brands will face more difficulties in Q1 and Q2 2023 – not just in terms of order size, but also making payments.
LOGISTICS
Across the six main trade routes out of the Far East, the spot rate has fallen an average of 75% since the start of the year. In contrast, the long-term rate has fallen only by 13% across these six routes, per Xeneta.
Last week’s Asia – US West Coast average rate of about $1,400/FEU is 4% lower than in 2019. East Coast prices have now decreased 80% since April, though some lingering congestion is one factor keeping rates 22% higher than in 2019, per Freightos.
Asia – Europe routes have seen an increase in demand and booking intake from week 48. This could slow the decline in rates, per Flexport.
Globally 13% of all capacity will be canceled in the coming weeks, as carriers continue to blank sailings. Though these steps do not seem to have slowed the rate decline much so far, there are reports of already fully-booked vessels in January, said Freightos.
Carriers plan more blank sailings for Q1 2023, most notably out of Vietnam, as they try to curb excess capacity while continuing to improve schedule reliability, said Flexport.
INSIDE SOURCING
Since July, Vietnam’s garment and textile firms have seen orders from foreign partners decline. Vietnam’s garment industry is expected to face a decline in orders from its key markets over the next two quarters, the country’s textile and apparel association said, amid high inflation that is dampening global demand.
- Vietnam’s apparel exports are expected to bring in $42 billion by the end of 2022, below the year’s target of $43-44 billion, according to Vu Duc Giang,chairman of the Vietnam Garment and Textile Association.
More developments in Bangladesh, Vietnam, Cambodia, India and China. Read more
MATERIALS SOURCING
An Overlooked Sourcing Country with a Sustainable, Vertical Supply Chain
After over a decade of prioritizing price, the textile industry now has a basket of criteria that it uses to identify the optimal places to source yarn, fabric and apparel.While price is still important, reliability, flexibility, and resilience are also critical considerations.
The past two years have taught us that we need to rethink our supply chains in order to be able to cope with all kinds of unexpected circumstances.
This shift in mindset has prompted brands to take a second look at countries that they might have overlooked a few years ago. Read More
PODCAST
Why Retention is the Newest Tactic in Customer Acquisition
Most companies are spending more and more budget to acquire customers who quickly hop to the next brand or chase the newest offer.
With customer acquisition costs across all channels at record highs, investing in retaining those customers you already have could be the smartest growth tactic a company could employ.
In this podcast Rajiv Lamba, CEO of SurveySensum, talks about how leading brands are building stronger customer relationships.
You’ll Learn:
- The newest initiatives that market leaders are implementing to get better customer feedback.
- The advantage leading e-commerce platforms are gaining by moving their market research in-house.
- How companies are using real time customer survey data to help reduce churn rates and influence customer retention.
MARKETS
U.S. core inflation (excluding food and energy) increased 6.0% in November, according to the latest data from the US Department of Labor. Economists were expecting a 7.3% rise in headline inflation.
UK inflation dipped to 10.7% in November as lower petrol prices helped to ease the rate of price increases from a 41-year high last month.
A net 90% of fund managers believe that inflation will fall over the next year but nevertheless remain pessimistic about the prospects for the global economy, according to a poll by Bank of America.
MATERIALS
- Continued weak demand is putting downward pressure on materials prices.
- Synthetic fiber prices retreated on the back of both lower demand and lower oil prices.
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