Fashion Logistics for Challenges Major and Mundane

We talk quite a bit here on The Apparel Logistics Blog about how costly major disruptions such as natural disasters, labor stoppages, political unrest, security risks, economic swings, and so forth can be. Simply put, apparel companies must, must, must, must invest in the type of supply chain flexibiity and resilience in order to be able to bounce back from unexpected, hugely costly interruptions. Just think about the seemingly unprecedented frequency and scale of hurricanes and earthquakes that have occurred in recent years — New York and the broader northeastern U.S. aren't exactly a common target for violent tropical weather, yet the region has been hit by two major storms in the past two years. 

But it's not just rare, cataclysmic events that companies need to be worried about. Among the various ways external forces can affect the day-to-day operations of companies, companies are more likely to face more subtle or mundane challenges, such as taxes, economic shifts, rising gas prices, or the efficiency of certain government agencies.

A recent study
released by Capital Business Credit, a trade finance company that specializes in domestic and international factoring for the apparel sector, looked at the external factors that are worrying retailers these days, plus just how costly some such factors have been over the first few months of the year.

The survey found that 50 percent of importers of retail goods are experiencing an increase in orders this spring as compared to last year, while 50 percent are experiencing a decrease or no change from the previous year. Economic factors that are concerning retailers in 2013 include an increase in the payroll tax, gas prices, and delayed tax refunds.

In the northeast, the delay in disbursement of both insurance claims and FEMA grants and loans puts a strain on people in the states hardest hit by Superstorm Sandy. [...] However, once the FEMA money starts to flow, there should be a pickup in spending as a large number of people will need to replace possessions lost in the storm. Supplier and manufacturers are still playing catch-up from the storm, as many retailers did not accept all the orders that were intended for shipping at the end of the 2012.  

Rising gas prices also are a cause for concern. While it's typical to see gas prices slowly climb in the first half of the year, in 2013 they are rising faster than in the past. [...] When choosing between buying non-essential items and filling up the gas tank, it is a safe assumption that a majority of consumers will choose the indispensable fuel.

The study only encompasses three months, but it's a nice snapshot of the day-to-day challenges and concerns weighing on companies. Indeed, the anecdote about how retailers are affected by federal government delays in disbursing Hurricane Sandy relief aid is a good example of three of the most common external factors affecting companies — weather, government and economic downturns — all in one.

All of this highlights the importance of remaining agile and investing in apparel supply chain management expertise. The Apparel Logistics Group's 3PL fashion logistics services can help your company continue to thrive in the face of factors — whether major or mundane — that it simply cannot control.
Posted: 5/3/2013 2:41:00 PM by Global Administrator | with 0 comments

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