Less congestion is shortening transit times. But for some retailers, shipments arriving ahead of schedule are creating inventory build ups and making scarce warehouse capacity worse, per Freightos.
LOGISTICS
Demand for ocean freight has continued to fall, driving rates down on both trans pacific and Asia-Europe routes, said Freightos.
On Asia-US routes rates continue to fall for all gateways, nearing rate levels seen pre-pandemic, while carrier reliability is up year-on-year, said Flexport.
On Asia-Europe routes, there’s been no change in the sluggish demand throughout November with a similar outlook going into early December. However, port congestion remains a problem, said Flexport.
Falling demand – together with significant efforts by the ports themselves – has pushed port congestion levels nearly back to normal at LA/LB and led to significant improvement at NY/NJ, though there are still delays for rail containers, per Freightos.
Indian Subcontinent pricing and capacity continues to benefit shippers as rates drop and vessel space remains available.
Air cargo demand remains weak as ocean capacity becomes more available and rates drop.
MATERIALS SOURCING
Greater Customization for Smaller Orders
Everyone is looking for more customization, but often that requires either committing to larger orders or paying higher prices.
Yong Sanga Co., Ltd., a specialist in polos and t-shirts using a wide range of fabrics, is offering a better solution.
“The key is that our company has a creative and flexible mindset. We are open to manufacturing a wide variety of designs. We’re also very flexible about our MOQs. In fact, we are trying to have no minimum order size,” said Thunthospon Manathon. Read More
INDUSTRY INSIGHT
The Beginning of the End of Free Returns
Many people have become accustomed to free returns, free shipping and general convenience of online shopping that has become the norm during the pandemic.
Consumers are often unaware of the sheer scale of the problem, which damages our planet and hits their pockets.
Experts point out that returning unwanted online purchases is not, in fact, free. The monetary cost of shipping and returns is baked into the prices shoppers pay – and there is a big environmental cost to pay.
Nearly half of all returned stock gets discarded and returns add 2.3 million tonnes of waste to landfills annually. Still, fast fashion retailers continue to produce more despite knowing how many of the items you buy are likely to be returned – after all, as long as you keep shopping, a few unwanted items are of little concern. Read More
INSIDE SOURCING
Vietnam Still Optimistic, Even as Exports Slow Down
Vietnam’s export growth is slowing down, after an optimistic first half of the year. High inventories and declining consumption in importing countries will cut demand for Asia’s exports more generally, the World Bank said. It forecast regional economies will expand 3.2% this year, rather than the 5% projected in April.
Vietnam earned more than $31.8 billion from exporting textiles and garments in the first 10 months of this year, up 21.9 percent from the same period last year, according to the General Statistics Office.
In October alone, Vietnam’s textile and garment exports rose 5.7 percent year on year to around $2.8 billion.
Although the textile and garment market is forecasted to slow down until the end of the fourth quarter and through 2023, it is still possible to reach the export target of $43 to $44 billion this year, said Truong Van Cam, deputy chairman of the Vietnam Textile and Apparel Association.
A snapshot view of key developments in Asia sourcing – all in our INSIDE SOURCING November report. Read more
PODCAST
A Fully Automated Custom Sock Business that Combines Manufacturing and Marketing
Brands want to keep inventories at a minimum – and need faster production to make that possible.
They also need to maximize personalization in order to provide consumers with what they want – when they want it.
Figuring out how to pull all of these components together in one smooth running system has eluded most manufacturers.
In this podcast Samuel Moses, founder and CEO of Sockrates Custom Socks, which specializes in producing high quality custom socks with blazingly fast turnaround times, shares his formula for success.
You’ll Learn:
- How to find a niche customer base.
- How he continually improves efficiency in his organization.
- Using data and market research to identify and deliver the right products for your market.
ENERGY
WTI crude futures plunged almost 5% to below $77 per barrel, closing in on its lowest level since January, as investors mulled persistent demand concerns while following developments regarding G7’s price cap on Russian oil.
A deteriorating outlook for global demand has kept markets on edge.
MATERIALS
Demand concerns are putting downward pressure on materials prices. Weakening consumer spending in key global markets is prompting more caution throughout the supply chain.
MARKETS
U.S. discretionary consumer spending per household continued to increase in October, up 2.9% year-on-year but down from 3.2% in September, according to Bank of America internal data.
The UK economy will lag behind most of its closest competitors over the next few years, new forecasts from the OECD suggest.
- Output across much of the economy has plunged to its lowest level since May 2020 as inflation weighs on demand, according to an analysis by Lloyds Bank.
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