For suppliers, the ability to travel and out of China – go to their factories, visit customers – is game-changing. 

For brands, the opportunity to see suppliers in China is a relief.

However, in the short run as China grapples with new waves of Covid on the heels of it dropping its Zero Covid policy and lifting those dreaded lockdowns, the market will continue to face disruption – just of a different kind.  

The biggest impact on sourcing this month is the return of freight rates to near 2019 levels.  The margin busting costs and inventory chaos brought upon supply chains for the past nearly three years is looking like it’s finally normalized.   

With the global economic outlook quite uncertain, brands will once again be able to implement a quick response model and keep inventories as lean as possible.  For many, this will be crucial to survival.

Now that travel restrictions throughout Asia have been lifted, we’ll start to see more brands taking action on goals to diversify sourcing.  This was difficult to do when you couldn’t actually go and visit factories. 

While most of the media talk centers around moving out of China, in reality brands are looking to reduce their level of dependence on any single nation or supplier – regardless of the country.  And at the same time, there’s also an eye on any new trade agreements that could make it more favorable to source in a previously overlooked nation.

Finally, increasing regulations on sustainability and transparency are putting pressure on both sides of the supply chain to not only green up, but to provide documentation to back that up.