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Shoe Intelligence (26/03/2021)
Shoe Intelligence – Vol. 18 n°14,15 (25/07/2016)
Shoe Intelligence – Vol. 18 n°14,15 (25/07/2016)
Shoe Intelligence – Vol. 19 n°3,4 (11/02/2017)
Shoe Intelligence – Vol. 20 n°9,10 (15/05/2018)
Shoe Intelligence – Vol. 20 n°9,10 (15/05/2018)
Sporting Goods Intelligence Europe – Vol. 17 n°16 (11/05/2006)
Sporting Goods Intelligence Europe – Vol. 26 n°23,24 (22/07/2015)
Sporting Goods Intelligence Europe – Vol. 28 n°1,2 (26/01/2017)
Sporting Goods Intelligence Europe – Vol. 30 n°33,34 (04/10/2019)
Opinion: How to understand and reduce logistic disruption costs
Shoe Intelligence (26/03/2021)
Many factors have contributed significant increases in transportation costs over the last year, reaching highs far in excess of long-term sustainable levels. The shipping industry is experiencing tight capacities, leading to a shortage of containers because of the strong demand, especially in areas related to health and industrial electronics, including bicycles and fitness equipment in the sporting goods sector. The footwear and apparel industry has suffered, too, and many companies have had to resort to costly air freight to mitigate the disruption in their deliveries. A few are using transportation by rail from China, which is faster than transportation by boat for about the same cost.
After logging massive rate gains on the transpacific routes, spot rates for transportation to Europe are now leading the race for higher rates with an increase of about 230 percent as compared to one year ago! A U.K. forwarder has confirmed to us that the rate quotes have hit the level of $10,000 per 40 cubic feet in the footwear industry.
Bookings for containers were frozen during the weeks prior to the Christmas holiday period due to the strong demand for shipments from Asia, creating a huge backlog prior to usual Chinese New Year shutdowns. Unfortunately, this backlog and the shortage of containers still exists, as most major global ports have numerous ships waiting to get unloading time slots. Furthermore, the impact of the coronavirus pandemic has clogged activities in the ports because of skeleton staffs and health restrictions.
The current forecast is that the supply/demand balance will be back to pre-corona levels in the next six months, or even later depending on the products.
How can you navigate the current freight market?
- Compare quotes/modes and communicate regularly with freight forwarders
- Buffer freight budget and transit time
- Explore cross-docking to consolidate to full loads
- Book as far as one can confirm Estimated Time of Departure (ETD). Check out www.Freightos.com.
As the global vaccination campaigns begin to take hold during the next 6-8 months, some experts predict that container availability, port congestions and demand may begin to stabilize soon. However, the prospect of a strong economic recovery, especially in the second half of 2021, may again create supply chain issues.
Besides, the significant increase in e-commerce, which is here to stay, will undoubtedly continue to cause additional market instability during the next 2-3 years because DTC requires shorter factory lead times and quicker transportation with specific packaging. Some major players in the sports and casual footwear market are forecasting that 30 to 50 percent of their turnover will be DTC by 2025.
Reshoring closer to distribution is complicated and not as easy as one may think. Companies that already have set up production closer to the source did it primarily to have flexibility in their retail networks. However, if a company sells more than 5, 10 or 20 million pairs a year, a near-shoring initiative can only cover a small percentage of the total because of higher production costs and the lack of large production lines that can compete with those in Asia. Generally, only small startups and DTC-only brands are sourcing close to the consumer.
Anyhow, greater agility is required in logistics to deal with specific problems like those that many companies are now experiencing with suppliers in Myanmar, many of which have closed their factories because of the violence triggered by the new military regime. They are trying to shift production to Cambodia and other areas in Asia, but it is not an easy and simple task, especially in the middle of the production season for FW21. Worker unrest and hold-ups, traffic blocks, port strikes and a lack of truckers and other available forwarders willing to take risks are major problems right now.
[SUSTAINABILITY] REPRESENTATIVES OF ASICS, BASF, BROOKS, CARREFOUR, CROCS, BROWN SHOE COMPANY,...
Shoe Intelligence – Vol. 18 n°14,15 (25/07/2016)
Representatives of Asics, BASF, Brooks, Carrefour, Crocs, Brown Shoe Company, Deichmann, Deckers, New Balance, Pentland Group, Marks & Spencer, Stella International and VF Corporation were among the 143 delegates attending the second Global Footwear Sustainability Summit conference last Aug. 28-29 in Shanghai, 20 percent more than one year ago. Speakers included Luigi Grosso, an industry consultant who previously worked for Timberland, Galahad Clark from Vivo Barefoot/United Nude, Charlie Gillman from Brown Shoe Company, Nicolas Smith from Bayer, and Peter Mangione from Global Footwear Partnership.
IN-HOUSE SHOE PRODUCTION HAS BENEFITS
Shoe Intelligence – Vol. 18 n°14,15 (25/07/2016)
Keen Footwear, which remains very committed to sustainability, is focused on boosting its in-house shoe manufacturing and assembly capacity from around 5 percent to 40 percent of its annual volume, which currently stands above seven million pairs per year. The balance will continue to be made by subcontractors in the Far East, except for the small production currently outsourced to Garsport in Romania for the company’s new “made in Europe” range of shoes.
Keen is starting up new company-owned factories in Mexico and Thailand to assemble different types of footwear, supplementing its recently established direct-injection plant in Portland, Oregon. The Mexican facility specializes in the manufacture of sandals, while the Thai factory makes mostly cemented shoes.
Several Italian brands are still making many of their outdoor shoes at their own factories in Italy. That includes highly specialized brands like La Sportiva, Scarpa and, recently, Montura, the leading Italian brand of climbing apparel.
Two other Italian firms that make their products in-house – Aku and Lizard – joined Keen and two other companies that outsource their production – Amer Sports and Berghaus – in a panel discussion on sustainability in footwear sourcing and manufacturing at the OutDoor show in Friedrichshafen a few days ago. Moderated by Luigi Grosso, it was attended by more than 90 people including Andreas Tepest, the top shoe buyer of Deichmann.
The panelists agreed that the demand for sustainably produced footwear is growing, especially among younger people, and that customers generally don’t want to pay a higher price for these “green shoes.” To ensure the respect of their environmental standards, Berghaus has brought the leather supply back home and Amer has taken steps to better control the whole supply chain, working with fewer suppliers.
For Lizard, keeping the production in-house and close to the market is another way to reduce the carbon footprint because of the shorter distances for shipments and the use of more sophisticated manufacturing techniques. Aku mentioned the elimination of chrome and other metals, in close cooperation with its suppliers. Lizard mentioned the way in which it processes polyurethane for its sports sandals.
According to these companies and Keen, making shoes in-house brings some additional benefits such as the development of internal skills, intellectual property protection, lean inventories of components and finished products, and greater flexibility in responding to sudden peaks in orders from their clients. The managers of these companies indicated that these benefits and other efficiencies can help neutralize the higher cost of labor compared with manufacturers in China or Vietnam, leading to competitive prices for “green shoes.”
RISING ASIAN PAPER PRICES AFFECT PACKAGING
Shoe Intelligence – Vol. 19 n°3,4 (11/02/2017)
Paper is the major component in the packaging of products made in Asia, accounting for an estimated five percent of the ex-factory price. During the last few years, Asian recycled containerboard prices have been enjoying modest price fluctuations. Suddenly, last November, there was a significant spike in prices all across the board. Much of the initial increase came from the two largest producers, but the smaller producers joined the trend and this added to the upward pressure.
Paper producers have named several factors behind the higher prices, including the rising cost of paper imported from the U.S. (OCC), coal and transportation/logistics costs. First, coal prices had a dramatic upturn over the last year because the Chinese government reduced production to address environmental issues and because of the start of the winter season. Second, prices for OCC rose due to the escalating freight costs brought on by Hanjin’s bankruptcy. Third, demand from the local market increased more than anticipated and inventories were quite low due to lack of forward purchasing. Fourth, the timing of these circumstances was likely important as it occurred when many converters were beginning to negotiate their future contracts with the brands and their contract manufacturers, providing them with more opportunities to pass along the increases.
Another important factor is that in mid-December heavy fog engulfed the north of China and many cities and municapalities were at red alert pollution warning, requiring paper mills to halt production or reduce emmissions by 30 percent.
According to Luigi Grosso of Euro Brand Management in Munich, who is a global sustainability expert in footwear supply chain logistics and management. the increased costs for coal, OCC, logistics and shipping should persists, negatively affecting the industry as a whole. Some other experts are claiming that prices may stabilize depending upon demand levels in the Asian packaging industry.
PAPER PACKAGING COSTS ARE RISING
Shoe Intelligence – Vol. 20 n°9,10 (15/05/2018)
Paper is the major component in the packaging of products made in Asia, accounting for an estimated five percent of the ex-factory price. During the last few years, Asian recycled containerboard prices have been enjoying modest price fluctuations. Suddenly, last November, there was a significant spike in prices all across the board. Much of the initial increase came from the two largest producers, but the smaller producers joined the trend and this added to the upward pressure.
Paper producers have named several factors behind the higher prices, including the rising cost of paper imported from the U.S. (OCC), coal and transportation/logistics costs. First, coal prices had a dramatic upturn over the last year because the Chinese government reduced production to address environmental issues and because of the start of the winter season. Second, prices for OCC rose due to the escalating freight costs brought on by Hanjin’s bankruptcy. Third, demand from the local market increased more than anticipated and inventories were quite low due to lack of forward purchasing. Fourth, the timing of these circumstances was likely important as it occurred when many converters were beginning to negotiate their future contracts with the brands and their contract manufacturers, providing them with more opportunities to pass along the increases.
Another important factor is that in mid-December heavy fog engulfed the north of China and many cities and municapalities were at red alert pollution warning, requiring paper mills to halt production or reduce emmissions by 30 percent.
According to Luigi Grosso of Euro Brand Management in Munich, who is a global sustainability expert in footwear supply chain logistics and management. the increased costs for coal, OCC, logistics and shipping should persists, negatively affecting the industry as a whole. Some other experts are claiming that prices may stabilize depending upon demand levels in the Asian packaging industry.
[CSR & SUSTAINABILITY] EURO BRAND MANAGEMENT (EBM) HAS ESTABLISHED A PARTNERSHIP WITH CLIMATE...
Shoe Intelligence – Vol. 21 n°19,20 (22/10/2019)
Paper is the major component in the packaging of products made in Asia, accounting for an estimated five percent of the ex-factory price. During the last few years, Asian recycled containerboard prices have been enjoying modest price fluctuations. Suddenly, last November, there was a significant spike in prices all across the board. Much of the initial increase came from the two largest producers, but the smaller producers joined the trend and this added to the upward pressure.
Paper producers have named several factors behind the higher prices, including the rising cost of paper imported from the U.S. (OCC), coal and transportation/logistics costs. First, coal prices had a dramatic upturn over the last year because the Chinese government reduced production to address environmental issues and because of the start of the winter season. Second, prices for OCC rose due to the escalating freight costs brought on by Hanjin’s bankruptcy. Third, demand from the local market increased more than anticipated and inventories were quite low due to lack of forward purchasing. Fourth, the timing of these circumstances was likely important as it occurred when many converters were beginning to negotiate their future contracts with the brands and their contract manufacturers, providing them with more opportunities to pass along the increases.
Another important factor is that in mid-December heavy fog engulfed the north of China and many cities and municapalities were at red alert pollution warning, requiring paper mills to halt production or reduce emmissions by 30 percent.
According to Luigi Grosso of Euro Brand Management in Munich, who is a global sustainability expert in footwear supply chain logistics and management. the increased costs for coal, OCC, logistics and shipping should persists, negatively affecting the industry as a whole. Some other experts are claiming that prices may stabilize depending upon demand levels in the Asian packaging industry.
PENTLAND GROUP HAS A 49 PERCENT STAKE IN A CONSORTIUM...
Sporting Goods Intelligence Europe – Vol. 17 n°16 (11/05/2006)
Paper is the major component in the packaging of products made in Asia, accounting for an estimated five percent of the ex-factory price. During the last few years, Asian recycled containerboard prices have been enjoying modest price fluctuations. Suddenly, last November, there was a significant spike in prices all across the board. Much of the initial increase came from the two largest producers, but the smaller producers joined the trend and this added to the upward pressure.
Paper producers have named several factors behind the higher prices, including the rising cost of paper imported from the U.S. (OCC), coal and transportation/logistics costs. First, coal prices had a dramatic upturn over the last year because the Chinese government reduced production to address environmental issues and because of the start of the winter season. Second, prices for OCC rose due to the escalating freight costs brought on by Hanjin’s bankruptcy. Third, demand from the local market increased more than anticipated and inventories were quite low due to lack of forward purchasing. Fourth, the timing of these circumstances was likely important as it occurred when many converters were beginning to negotiate their future contracts with the brands and their contract manufacturers, providing them with more opportunities to pass along the increases.
Another important factor is that in mid-December heavy fog engulfed the north of China and many cities and municapalities were at red alert pollution warning, requiring paper mills to halt production or reduce emmissions by 30 percent.
According to Luigi Grosso of Euro Brand Management in Munich, who is a global sustainability expert in footwear supply chain logistics and management. the increased costs for coal, OCC, logistics and shipping should persists, negatively affecting the industry as a whole. Some other experts are claiming that prices may stabilize depending upon demand levels in the Asian packaging industry.
[SUSTAINABILITY] EURO BRAND MANAGEMENT HAS QUALIFIED TO BECOME A CERTIFIED...
Sporting Goods Intelligence Europe – Vol. 26 n°23,24 (22/07/2015)
Euro Brand Management has qualified to become a Certified B Corporation. The label is said to have been recognized as the highest standard for social corporate responsibility, applying to companies that use the power of business to solve social and environmental problems. This relatively new certification has been granted to over 1,000 businesses in 30 different countries around the world that encourage organizations to compete, not just to be the best in the world, but also “to be the best for the world.” Operating in the Munich area and led by Luigi Grosso, a former top manager for Timberland and other companies, Euro Brand Management helps global brands and companies to understand and implement sustainable packaging design innovations, mimicking the holistic behavior of the natural environment. Besides Timberland, its past and current clients include Damco, Geox, Inditex, the Mas Group, The Natural Step and the Ziylan Group.
AND SO ARE ASIAN PAPER PRICES
Sporting Goods Intelligence Europe – Vol. 28 n°1,2 (26/01/2017)
Euro Brand Management has qualified to become a Certified B Corporation. The label is said to have been recognized as the highest standard for social corporate responsibility, applying to companies that use the power of business to solve social and environmental problems. This relatively new certification has been granted to over 1,000 businesses in 30 different countries around the world that encourage organizations to compete, not just to be the best in the world, but also “to be the best for the world.” Operating in the Munich area and led by Luigi Grosso, a former top manager for Timberland and other companies, Euro Brand Management helps global brands and companies to understand and implement sustainable packaging design innovations, mimicking the holistic behavior of the natural environment. Besides Timberland, its past and current clients include Damco, Geox, Inditex, the Mas Group, The Natural Step and the Ziylan Group.
[CSR & SUSTAINABILITY] EURO BRAND MANAGEMENT (EBM) HAS ESTABLISHED A PARTNERSHIP WITH CLIMATE...
Sporting Goods Intelligence Europe – Vol. 30 n°33,34 (04/10/2019)
Paper is the major component in the packaging of products made in Asia, accounting for an estimated five percent of the ex-factory price. During the last few years, Asian recycled containerboard prices have been enjoying modest price fluctuations. Suddenly, last November, there was a significant spike in prices all across the board. Much of the initial increase came from the two largest producers, but the smaller producers joined the trend and this added to the upward pressure.
Paper producers have named several factors behind the higher prices, including the rising cost of paper imported from the U.S. (OCC), coal and transportation/logistics costs. First, coal prices had a dramatic upturn over the last year because the Chinese government reduced production to address environmental issues and because of the start of the winter season. Second, prices for OCC rose due to the escalating freight costs brought on by Hanjin’s bankruptcy. Third, demand from the local market increased more than anticipated and inventories were quite low due to lack of forward purchasing. Fourth, the timing of these circumstances was likely important as it occurred when many converters were beginning to negotiate their future contracts with the brands and their contract manufacturers, providing them with more opportunities to pass along the increases.
Another important factor is that in mid-December heavy fog engulfed the north of China and many cities and municapalities were at red alert pollution warning, requiring paper mills to halt production or reduce emmissions by 30 percent.
According to Luigi Grosso of Euro Brand Management in Munich, who is a global sustainability expert in footwear supply chain logistics and management. the increased costs for coal, OCC, logistics and shipping should persists, negatively affecting the industry as a whole. Some other experts are claiming that prices may stabilize depending upon demand levels in the Asian packaging industry.