Home>Distribution>3PLs>Fashion supply chains recovering from Covid-19 pandemic
Home>Industry Sector>Retail/E-tail>Fashion supply chains recovering from Covid-19 pandemic
Home>Distribution>Transport>Fashion supply chains recovering from Covid-19 pandemic

Fashion supply chains recovering from Covid-19 pandemic

08 June 2020

Many fashion brands have been suffering from the fact that their suppliers in Asia had to stop production during the Covid-19 crisis.

At the same time stores were closed for weeks. Their warehouses are still overflowing with old goods. The situation is improving in the transport market. 

“Customers are reporting improvements in all modes of transport, and data from our SCM software OSCA confirms this," reports Ralf Duester, CEO of the software company Setlog.

The company regularly analyses the data of around 100 fashion brands and their supply chain partners who use OSCA to manage their supply chains and purchasing processes.

Concerning the European trucking business, textile forwarding companies are benefiting from a decision by the Turkish government in mid-May. The general quarantine regulations for non-Turkish truck drivers have been overturned. 

“This means that mandatory driver changes at the Turkish border are fortunately no longer necessary," emphasises Leonhard Kiel, managing director of Barth + Co, a forwarding company specialising in fashion transport. 

Key Points

  • Turkey overturns quarantine regulations for foreign truck drivers.
  • Air freight rates for Chinese imports are falling, but are still three times higher than before Covid-19.
  • Rates for rail transport on the new Silk Road are relatively stable.

Air freight: After air freight deliveries of masks and protective clothing from China caused rates in the air cargo sector to rise in March and April, this business has been slowing down due to the fact that the need for protective gear has subsided. Freight rates have fallen slightly. Nevertheless, Setlog data shows that prices for air transports from China are still about three times higher than at the beginning of the year. For comparison: On 12 March, according to Setlog data, they were still more than five times higher.

Rail freight: The freight trains on the new Silk Road are well booked. Freight forwarders advise their customers to reserve capacities two weeks in advance. "The great advantage of this transport option compared to sea freight is, it’s much faster. Rail transport between China and Hamburg currently takes only 18 days instead of 32 or more compared to sea transport," reports Patrick Merkel, Managing Director of the 4PL company Prologue Solutions in Hamburg. Despite the slightly increasing demand, the rates per container are relatively stable. Compared to air freight, rates for rail transport on the new Silk Road are on average 50 percent cheaper.

Sea freight: After empty and full containers were stowed in China at the beginning of the Covid-19 pandemic, the situation in the ports has eased. "However, due to longer layovers in ports, slower vessels and pausing services, the average transport time for a container from Shanghai to Hamburg is currently 32 to 34 days," reports Merkel. Before the Corona crisis, 28 to 30 days were the rule. At the beginning of June, the booking situation has almost returned to the previous year's level. However, ship owners around the world have reduced capacities. According to a report by the German Shipowners' Association (VDR), 11.3 percent of the global container fleet is currently unused. This means that 524 ships with a capacity of 2.65 million 20-foot standard containers (TEU) are not in use and and are stowed mostly in Asia.