Top US Shippers: Apparel retailers ordering early to avoid trans-Pac delays

Clothing retailers and wholesalers in the US increased their imports sharply last year and expect demand to remain robust this year, but persistent port congestion and fears of further disruption during West Coast longshore labor negotiations are forcing shippers to carry more inventory and pull orders from Asian suppliers forward.

Importers worried about stockouts due to cargo stuck on the water, at marine terminals, or at inland rail ramps are building inventories of back-to-school — and even holiday — apparel and footwear well in advance of the typical trans-Pacific peak season. That’s making it tougher for retailers to forecast how much of a given product they should order and putting additional pressure on their supply chains, according to the senior vice president of policy with the American Apparel & Footwear Association (AAFA).

“The holiday season accounts for over 50 percent of sales, so trying to deal with the shipping crisis while making sure that we have the product in for the holidays has created difficult situations,” AAFA told “Companies are trying to bring in many products early, but also trying to guess what that hot product will be. It’s also created a whole litany of inventory issues trying to store these products, and there are warehouse capacity issues all around the US.”

Skyrocketing shipping costs — with spot trans-Pacific Ocean freight pricing up nearly 150 percent year over year in early May, according to benchmarking firm Xeneta — are also a major concern for apparel and footwear companies, many of which were already operating on razor-thin margins, AAFA said. Some companies have raised prices on products to offset the sharp rise in freight rates, but fierce competition among the vast array of brick-and-mortar and online retailers doesn’t allow much room to recoup transportation costs.

“There’s a very low barrier to entry into the industry, and e-commerce has made that barrier practically non-existent over the last 10 years. There are so many players, and so many options to buy clothes and shoes,” AAFA explained.

Total US clothing imports jumped 18 percent to 1.87 million TEU in 2021, according to PIERS, a sister product of within IHS Markit, now part of S&P Global. Last year’s growth came on the back of an 11.4 percent decline in 2020, leaving 2021 volumes 4.6 percent ahead of 2019, the last full year prior to the COVID-19 pandemic.

Multimodal delays
An apparel and footwear importer who asked not to be named said the company placed orders with Asian manufacturers for holiday season merchandise in January and February, rather than in the spring, to compensate for widespread disruption throughout the trans-Pacific supply chain. Vessels are lining up outside major US cargo ports, and transit times for containers headed inland are being further stretched by inconsistent international intermodal rail service.

As a result, shippers are faced with a choice between potentially lengthy delays for boxes moving by rail — whether transloaded or intact inland point intermodal (IPI) — and the extra costs of transporting cargo by truck.

“It was used to be able to run their containers from Los Angeles to Chicago in four to five days, but now it’s double that,” the apparel shipper said. “But I’ve seen ocean containers on IPI take 20 or 21 days to get to Chicago. I’ve seen some IPI trains sit in Southern California for two or three weeks, just on their own, and they’re just not moving.”

Those choices are made based on the product, the shipper said. For seasonal products that need to arrive within a given time frame, the company hires team trucks able to move cargo from the Port of Los Angeles to Chicago in two days, while other products are transloaded into domestic intermodal containers or moved intact based on how quickly they need to arrive.

Source: The Journal of Commerce

Closer to home?
Some clothing importers are looking to diversify their sourcing to reduce risk and reliance on manufacturing in Asia and a highly disrupted trans-Pacific trade.

A second apparel and footwear shipper who asked not to be identified said purchasing more products from Central America has drastically reduced the company’s port-to-port transit times and overall transportation costs.

“It’s like four days on the water from Honduras versus two weeks on the water from Asia, so it’s a lot quicker,” the shipper explained. “The cost of trans-Pacific vessels is not going back to where we were pre-pandemic. The new normal on rates will be higher, so it’s a lot cheaper for transportation to use Central America.”

Shifting sourcing from Asia to Central America has its own risks, however, due primarily to geopolitical instability and a higher incidence of severe weather events such as earthquakes and hurricanes, the shipper said.

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