The 2008-09 economic recession was painful for the footwear industry, but the industry is putting lessons learned to good use now that the market has rebounded.
“We will take the 2009 lessons forward,” said Charles Kantz, vice president of logistics and warehousing at Bakers Footwear Group.
Bakers the past two years streamlined its supply chain by doing more labeling of product in source countries and, where possible, loading footwear into 53-foot marine containers.
The use of 53-footers isn’t widespread in the trans-Pacific yet because many shipping lines are sticking with the traditional 40- and 20-foot boxes and offer few 53-foot ocean containers. Bakers, however, has been working with carriers and is using 53-foot containers when they are available. The shipments bypass transloading warehouses on the West Coast and move right to Bakers’ regional distribution centers.
Bakers’ streamlined supply chain reduces the origin-to-destination transportation costs 10 percent and cuts down on the transit time, Kantz said.
Imports of footwear increased about 16 percent last year over 2009, according to the American Apparel and Footwear Association.
Imports from China, by far the largest producer of footwear sold in the U.S., also increased about 16 percent. China is the source of about 87 percent of U.S. footwear imports, according to the association.
Footwear importers always are looking to expand their sourcing to other countries so they don’t become overly dependent on China, but newer production sites such as Vietnam and the Indian subcontinent present infrastructure and distribution challenges.
Labor costs may be lower in those countries, but the added costs due to inadequate inland infrastructure and less-frequent ocean carrier services to the U.S. could offset any savings in manufacturing in those countries, Kantz said. “Right now, it’s better to stick with China,” he said.
Freight rates in high-volume trans-Pacific corridors likely won’t be a problem this year. Rates have declined noticeably since the 2010 peak season last fall. The average spot rate charged to cargo consolidators in early April was $1,693 per FEU, according to the Drewry Shipping Consultants container rate benchmark.
Footwear importers anticipate another year of solid growth in 2011. But even though the overall economy is improving and consumer spending is relatively strong, retailers the past two years learned the importance of matching import volumes with projected sales, so footwear importers will be managing their inventory levels aggressively, Kantz said.
Contact Bill Mongelluzzo at firstname.lastname@example.org