For all the talk about near-sourcing to Central America or the shift in production to Vietnam, China remains the dominant supplier of U.S. apparel imports. In fact, China’s share of the U.S. apparel import market is growing far faster than overall U.S. apparel imports.
Containerized U.S. apparel imports increased a minimal 0.8 percent in 2012, according to data provided by PIERS, a sister company of The Journal of Commerce. But the dollar value of U.S. imports of apparel made in China increased 4.3 percent in the year ended March 31, more than twice the 1.9 percent growth rate in the value of all U.S. apparel imports, according to data provided by the U.S. Association of Importers of Textiles and Apparel.
“China is still the 500-pound gorilla in the room,” said Hubert Wiesenmaier, executive director of the American Import Shippers Association, which negotiates freight contracts for U.S. textile, garment and footwear importers. “As far as sourcing is concerned, nothing has changed. China is still where our members, who are wholesalers, are buying and where the carriers are focusing their resources.”
China accounts for 42.9 percent of all U.S. apparel imports by dollar value. The reason, of course, is that China’s transportation and port infrastructure is far more developed than that of any other source country.
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“China has it all,” said Julie Hughes, executive director of the USA-ITA. “They have modern deep-water ports. They have the roads that go directly from the factory to the deep-water port. They can handle everything terrifically for the transportation guys. They offer responsiveness, quality, the ability to deliver on time, meeting the demand of buyers and still at a price that is competitive.”
AISA’s members are committing to more apparel imports in their ocean service contracts this year than last. “We have seen a strengthening, not huge increases, but some increases,” Wiesenmaier said.
The dollar value of apparel imports from Vietnam, the second-largest single-country supplier with 9.5 percent of the U.S. market, is increasing at the fastest rate among the top 10 suppliers. But this growth is measured on top of a much lower base than China.
“Vietnam is important, but it is nowhere near the scale that we see in China,” Hughes said. Although growing, Vietnam faces limited potential because of concerns about the infrastructure, water issues, and other factors that can’t be resolved easily. “Is Vietnam going to challenge China? I don’t think there is any country right now that would appear to challenge China for the top spot,” Hughes said.
Bangladesh, the No. 4 single-country source by value, with 5.8 percent of U.S. apparel imports, is losing its appeal as a low-cost production source because of numerous workplace disasters, including the April collapse of the Tarzeen garment factory building that killed 1,127 people in Dhaka.
Wiesenmaier, however, isn’t hearing any reports about shifting production out of the country from members, who are largely wholesalers selling to the retail trade. “Our members had already become leery of sourcing in places like Pakistan and Bangladesh even before the collapse of the building,” he said.
In the case of Pakistan, the 10th-largest source country by value, importers are wary because of “anything that would put them at risk of more container inspections,” he said.
Indonesia, the third-largest country supplier, provides 5.3 percent of total U.S. apparel imports by value. It is a growing factor in apparel importers’ supply-chain strategies because it is a reliable supplier, Hughes said. “It’s a sleeper because most people don’t pay attention to it.”
Honduras, the seventh-largest source of U.S. apparel imports by value, provides 4.6 percent of U.S. apparel imports. Honduras is a key source for such importers as Hanesbrands and Fruit of the Loom, which also source in Vietnam as part of their supply chain global strategies.