Stormy seas

Increasing costs and uncertainty over timings have been on-going issues for all those shipping products to the UK over the past 18 months. Images talks to manufacturers and importers about the shipping problems they are facing and how they are striving to minimise the impact on decorators

Since Covid first took hold in China at the beginning of 2020, shipping routes, capacity and costs have been affected across the world – and the impact is still being felt more than 18 months later.

It’s a complex situation, as Michael Overy from heat transfer film distributor Dae Ha UK explains: “The first lockdown in China and subsequently the rest of the world caused an imbalance of where containers were located. The containers left China, but there were lower exports back to China due to lockdowns and hence ships were going back to Asia with fewer containers than usual. As Asia exports picked up again, there was a lack of containers in the region, as many were still in Europe, the US etc.

“Upon re-opening in summer 2020, container supply and demand issues were created and costs naturally started to rise.”

On top of this, he explains, social distancing at global ports has and continues to cause delays to loading/unloading, causing further backlogs and reducing the frequency of round trips for each ship, which in turn leads to increased costs. Add to that the Suez Canal blockage in March, a collapsed crane set in Kaohsiung in Taiwan, and a 70% reduction in terminal workforce at the port of Yantian in China, where 25-30% of all Chinese exports leave from, and it’s little wonder that shipping frequencies have continued to decline and costs have continued to rise.

“I am sure our industry and the wider business community are starting to feel the excuses of delays based on a lack of container space starting to wear a bit thin, but the reality is that the impact of Covid on the usual ebb and flow of world trade very much remains and will continue to affect the supply significantly well into 2022, if experts are to be believed,” warns Joel Chadwick, managing director of sportswear manufacturer Chadwick Textiles.

Donald Moore, chair of uniform manufacturer One+All, reports that ships that would typically do six return trips a year are now doing four. “The cut in container trips has forced shippers to increase their prices from a previous average of $2,000 for a 40-foot container to as much as $15,000. Some of this pricing has been extra profit opportunities for the shippers and the largest shipper made more profit in the first quarter of this year than the previous ten combined!”

Donald continues: “These extremely high costs mean that wholesalers importing from these countries have to pass on some of these additional costs. We can all expect to pay more for imported goods.”

Like Joel, Donald expects these delays and high prices to remain in force until after Chinese New Year 2022, and that it could take until 2024 before prices and timings return to anywhere near pre-Covid rates.

“We’ve prepared by doing all we can to order plentiful stocks for back-to-school 2021 as it’s critical for customers that we try to help them meet the demands – particularly this year, after they’ve had so many challenges,” he says.

Scramble for containers

While there are many issues facing those trying to ship goods from overseas at present, Ian McLaverty, merchandise director at schoolwear manufacturer David Luke, says “the biggest impact has been the inability to forward book container space and guarantee availability. There are lots of reasons why this is now not possible, but because of this single fact, it feels like a last minute scramble for each container we want to move. This in turn makes things very hard to communicate and explain down the chain to our end customers.”

He doesn’t expect costs to return to pre-Covid price levels, and notes that shipping costs have increased ten-fold, “which have been very hard to manage for us; in our industry it is very hard to pass on price increases mid-season”.

He adds: “Planning and awareness further down the chain is going to be even more important–knowing where your raw materials are will be imperative to forecasting the end delivery date – therefore we will require even more forward-planning and commitment as the world looks to recover.”

His message to garment decorators is simple: “Stock replenishment is not going to be easy to manage short-term, so try to give your suppliers confidence and visibility by forward-ordering where you can. Keep in touch with your suppliers and make sure they are aware of your intentions. Prices are looking like they will need to increase, but we are sure that every supplier is working hard to keep these to a minimum as everyone understands the impact.”

Manufacturer Result Clothing, which produces a wide range of blanks from workwear and sportswear to headwear and safetywear, has paid out more than £1 million in extra freight charges between November 2020 and July 2021, none of which was passed on to customers.

“Result’s policy has been to try to maintain good stockholding levels as a main priority and shield customers from these increased freight costs for as long as possible,” confirms managing director David Sanders-Smith.

“Result’s high levels of stock has helped achieve a 25% growth in workwear, polar fleece and softshell, which allowed us to limit the 1st July price increase to just a few China-made products.

Social distancing of workers at ports has led to delays in loading and unloading ships

Result’s new product range will, however, still arrive in time for the January 2022 launch, asserts David.

Strong stock levels

Like many in the industry, says Joel, Chadwick has seen strong demand in schoolwear, with the demand for teamwear now catching up too. The company is working hard to ensure it secures the shipping space needed to get goods out of China “whatever the costs”, and says while it’s not easy, its success “boils down to relationships, contacts and the strength of our supply chain, something we have worked hard on over the last few years”, plus having staff and an office in China, which “has been invaluable in getting things done when it seemed the world was crumbling around us!” reports Joel.

Chadwick has maintained strong stock levels throughout the pandemic, he explains. “We took the decision early on in spring 2020 to keep producing as normal; we felt the school market would still operate to a greater extent even if there was disruption. We have seen demand surge for PE and gameswear as items such as skinny pants, mid-layers and leggings have been made compulsory in some schools, enabling kids to wear them to school instead of more formal uniform through the week.

“We feel very strongly that good stock levels is singularly starting to become the key factor for our customers, assuming quality and price are a given. Asking our suppliers to hold both fabric and finished garment stocks for call off is also something we continue to do wherever possible for running styles to reduce lead times and react to surges in demand.”

New styles have also been developed, he confirms, despite the difficulties the team had to overcome in not being able to see suppliers and factories in person to discuss new developments.

Don’t panic

Dae Ha UK, which distributes Dae Ha films as well as Lotus heat presses, has always worked three to four months in advance of shipments arriving, but it’s the unpredictability of the current shipping times which is most challenging, says Michael – door-to-door shipping times have increased from 40-42 days pre-Covid to 52-92 days since the pandemic started.

Since mid-2020, the company has increased its stock in Korea (where film manufacturer Dae Ha is based) and the UK, and has spread its container shipments out more regularly rather than grouping them together in order to minimise the impact of any delays en route from Korea. “Working with a large international logistics company, we are also able to secure container space in advance, to shorten the lead-time from the product leaving the factory to physically leaving Korea.”

Dae Ha UK’s costs have increased four-fold, with the possibility of going five-fold or more in the run up to the peak shipping season of August through October, he adds.

“With costs increasing at every turn, we’re acutely aware of the pressures that are building for our customers,” says Michael. “We’re proud that increased sales, plus changes we have made since February 2020 both in Korea and the UK to increase productivity and to how we ship our rolls, have allowed us to maintain our current competitive pricing.

“To date, Korea has not been in lockdown, but to mitigate the possibility, Dae Ha has increased stockholding of all raw materials to ensure continuity of supply to its global customers, and as such, there have been no major issues. Silicone Ultra HTV has been our only casualty, due to a global shortage of silica, particularly for the premium grade we require for our products.” To offset this, Dae Ha has created 45D Plus, a PU-based high-build film for which the company controls all aspects of manufacturing, and Silicone Ultra will be back in 2022.

“Don’t panic!” is Michael’s straightforward advice to UK garment decorators. “Dae Ha customers have nothing to fear regarding our stock holdings.” The company prides itself on managing stock levels “to ensure the highest level of trust with our customers” and Michael says Dae Ha UK is “very confident we’ll maintain our current prices through 2021. While raw material costs and shipping may increase for 2022, we remain committed to offering an unrivalled quality to price ratio for all our HTV.”

Is nearshoring the answer?

The long-term answer to the shipping issues exposed by Covid may be to shift manufacturing either to the UK or nearer home. David Luke was already exploring nearshoring before 2020, explains Ian.

“We manufacture mainly in the Indian Sub-Continent and China; the main reasons for consideration [for nearshoring more production] prior to Covid was based on extending shipping times impacting on stock availability and service levels, combined with our overall company approach to the impact we all have on our planet. Since then, both Covid and Brexit have impacted further on every aspect of importing, and it’s become more complicated, service levels have dropped further, and costs have spiralled. We just need to assess if this is a short-, medium- or long-term issue for us. We are always looking at better ways for us to trade sustainably and ethically around the world and we pride ourselves on the longstanding relationships we have with the majority of our supply chain.”

The message coming loudly from all UK suppliers is to keep communicating and understand that while some price increases are inevitable, they are working hard to keep them as low as possible. With Christmas and Chinese New Year round the corner, and the Delta variant of the virus causing more lockdowns and mandates for social distancing across the globe, expect more delays and more freight charge increases – but be confident that these seasoned professionals are doing all they can to navigate their way through these choppy waters and bring their goods to UK garment decorators on time and on budget.