EV’s Unplugged
The race to electric vehicles has hit a speed bump (or perhaps a dirt road, depending on how you look at it).
- Raw material supplies, particularly lithium for batteries, will be insufficient to meet EV demand at current rates of investment, per Boston Consulting Group.
- Rising electricity prices have meant up to 50% hikes in EV charging rates this year, far out pacing gasoline prices per BCG.
- EV truck maker Rivian is still losing $33,000 on each $80,000 vehicle, despite a surge in sales, per the Wall Street Journal.
- Rivian has only one factory where target production is 52,000 vehicles this year – less than roughly one-third of the facility’s capacity, per the Daily Upside.
- Tesla is dictating the EV market with repeated price cuts in the past year, per Autoevolution.
LOGISTICS
Rates continue to drop on Asia-Europe routes, despite continued blank sailings. On Asia- N. Europe routes Ocean Alliance has announced 5 more void plans for November, the other alliances may still announce their own void plans or even full service take-out over the rest of year, per Flexport.
Asia to N. America East Coast prices are now 18% lower than in 2019 and their lowest level since mid-2018, per Freightos.
The top four US ports, which accounted for 68.2% of US imports from Asia through August, experienced greater than 20% declines in Asian imports in the first eight months of 2023, per the Journal of Commerce.
Despite lower demand, some carriers have announced November rate increases, per Flexport.
Asia to N. America West Coast is the only major shipping lane with prices still above 2019 levels, per Freightos.
Maersk and Hapag-Lloyd have announced upcoming surcharges to cover the European Union’s ETS (Emissions Trading System) decarbonization charges, which start to phase in as of January 2024.
Despite this week’s uptick in air cargo rates, the industry remains pessimistic that a significant air cargo peak season will materialize this year, per Freightos.
CURRENT SITUATION IN SOURCING
The (Very) Slow Migration Out of China
Almost every brand talks about moving out of China, but most are finding that what sounds good in theory is more difficult when it comes down to execution.
The attributes that drew brands to China (speed, agility, domestic supply chain) are critical given today’s market conditions.
And with the yuan trading at a 16-year low against the dollar (down 5.7% this year), prices are very competitive.
On average, brands have moved about 15% of orders out of China.
China’s overall decline in exports is in part also due to brands reducing order volumes (from all sourcing nations) as they focus on reducing inventories.
More on sourcing developments. Read More
PODCAST
A Practical Approach to Digitizing Manufacturing
AI is considered to be foundational in the move towards Industry 4.0.
The question for many manufacturers is how to go from theory to practical application – without downtime or a huge capital investment.
In this podcast Bryan DeBois, director of Industrial AI at RoviSys, one of the largest independent global system integrators for manufacturing, answers some of the questions manufacturers have about operationalising technologies such as AI, Data Infrastructure and Advanced Analytics.
You’ll Learn
- How smart factories are transforming the manufacturing industry with data and AI.
- How to start a digital transformation journey for medium-to-large manufacturing companies.
- How to integrate a new data pipeline into an existing infrastructure with minimal disruption to its operations?
- The role that key humans will play in new tech-driven operations.
SUSTAINABILITY
Renewcell (Sweden) CIRCULOSE Supplier Network has reached 116 members in 15 nations, making sustainable materials accessible to more manufacturers. Read more
MATERIALS
Materials prices for both fibers and yarns continued to retreat this week.
- Cotton prices fell mainly pressured by a stronger dollar and demand concerns.
- Oil prices fell sharply during the week as OPEC+ made no changes to its output policy and maintained previously announced production cuts.
You can find the current Month-on-Month and Year-on-Year prices here
Best Selling Fabric Directions for AW 2024-25
New fabric developments are giving brands an opportunity to elevate their collections – and create apparel that consumers want to buy!
MARKETS
French retail sales in volume terms fell by 2.8% in August, following a 0.3% fall in July, per Eurostat data.
CURRENCIES
The dollar weakened against the Euro and Pound Sterling, but gained against the Yen and Reminbi.
The euro continued to trade below the $1.05 mark, staying near its weakest level in nearly a year. The British pound stabilized around the $1.21 mark, remaining near its weakest level since mid-March.
The yuan weakened to 7.3 to the dollar, however the People’s Bank of China recently stated that it would “keep the yuan basically stable at reasonable and balanced levels.”
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