Bags / Shoes & Accessories

On the 28th local time, a large number of containers were piled up at a railroad yard in Chicago, Illinois, USA, causing further tension in the supply of local commodities.

The US media recently warned in reports that the epidemic has brought difficulties and impacts to American consumers: "The epidemic has caused factories in South and Southeast Asia to close, increasing the risk of disruption in the global supply chain. US consumers may soon find that they are on local shelves. Empty."

In another month, the major public schools in the United States will usher in offline school. Parents and children have begun to prepare a variety of stationery for the new semester. However, the sports shoes, plaid shirts and even some stationery that children need appear to varying degrees. Out of stock or price increases. Why does this happen? To what extent does the epidemic in Vietnam and other places affect the supply in the U.S. market? Will the orders return to China?

U.S

Parents of students have begun to "stock up"

Just halfway through the summer vacation, American parents have begun to "stock up" for the children's fall school in advance, because the epidemic has caused a tight supply of some items on the "shopping list" for the beginning of school. For example, the children's favorite "coconut shoes" have been out of stock for a long time.

A parent searched for "coconut shoes" in shoe stores in many shopping malls, but failed to find it. The clerk told the parents, "Now it is very difficult to purchase'coconut shoes', and the price is getting higher and higher. Adidas''coconut shoes' are all over four to five hundred dollars." In another relatively large professional shoe store, the cashier told the parents, “It’s going to be a while. We are buying from China now. We should replenish the goods faster. You will come back in mid-August.”

"Washington Post" reported that data from the U.S. Census Bureau showed that U.S. retailers only have enough inventory on hand to maintain sales for more than a month, which is close to the lowest level since 1992.

Vietnam, India, Bangladesh

Closed! No box! blockade!

The suspension of the Vietnamese factory is alleged to be the main reason for the suspension of the supply of "coconut shoes" in the United States. According to Vietnam Express, under the impact of the fourth round of the epidemic, Nike's foundry in Vietnam may face a "zero output" crisis.

Nike has about 200 contract manufacturers in Vietnam, and the two largest contract OEMs, Baocheng Group and Chang Shin, have all shut down. Baocheng Footwear, which has a factory in Ho Chi Minh City alone, employs about 62,000 Vietnamese workers. Nike shoes such as "coconut shoes" and sneakers, which are popular among young people, are produced in this factory.

In fiscal year 2020, Vietnamese producers contributed 50% of Nike's annual production capacity. In the second quarter of this year, only 49% of Nike products sold to the US market were produced in Vietnam. In addition, the report also wrote that in the financial report statistics released in June this year, in the past fiscal year, Nike shoes produced in Vietnam accounted for 82% of the US consumer market.

This year, although Vietnam’s textile industry’s export orders have been received in the third quarter, companies are currently struggling to achieve a balance in production activities, securing employment for employees, and profits. The demand for brand customers to delay payment by 2 to 3 months, or even 6 months, is also beyond the capacity of enterprises. Moreover, in the face of the huge risks brought by the increasingly complex epidemic, some brand customers have moved their orders out of Vietnam, and even have a tendency to return to the Chinese market.

More and more companies in Vietnam have already borne the huge cost burden and pressure of epidemic prevention with sludge.

As an emerging "world factory", India's recent situation is not optimistic. Because Indian exporters have no containers available, foreign buyers have begun to cancel shipments from India, causing the goods to be stacked in different ports for several weeks.

A clothing manufacturer in New Delhi said in an interview: “High freight can be absorbed, but the absence of containers directly changes the rules of the game. Several ships are bypassing India because there are no containers to carry goods. Sometimes our goods require goods. Stay at the port for three to four weeks. International buyers tell us to either cancel the order or ship by air. But air freight is also soaring."

According to Indian media reports, due to problems such as "transportation mismatch", export companies may have to wait at least two weeks before they can get an "expensive container quota." This has resulted in many sellers even having to re-discuss the price increase with buyers at the last minute of delivery. And many importers in European and American countries have also begun to consider from the perspective of cost, turning their attention to countries that are geographically closer to them as alternative import destinations.

The freight rate continues to soar, the port is congested, and the freight rate is already higher than the cost of the product. Indian small exporters are fighting for every penny.

Looking at another country where the shoe industry is most popular, the Bangladeshi government has decided to implement a nationwide blockade of the country’s textile and clothing industries on July 23 after the Muslim Eid al-Fitr (July 19-23).

According to observations, due to the coincidence of the 40% annual export time of Bangladeshi textiles during the blockade, things have become complicated. The orders for the autumn and winter series of 2021/22 have been delivered around May. Compared with the same period in 2020, Bangladesh’s export volume has increased by about 12%. %.

The blockade may cause some customers in the industry to transfer orders, but there is no other region where they can transfer orders except for China, where manufacturing costs are relatively high. Although the Cambodian and Thai governments have not implemented blockade policies on the industry, as far as is known, large exporting countries such as Vietnam and Indonesia have begun to implement safety restrictions on the epidemic.

China

Orders return, the regulator has an obvious effect

The counter-attack of the epidemic in manufacturing countries has brought positive stimulus to my country's domestic market. Orders from Southeast Asian countries such as India have also begun to return to my country, bringing a sharp increase in the number of orders for domestic textile, chemical, rubber and other industries.

Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce, said in an interview that the daily necessities, clothes, shoes, and mechanical and electrical products needed by the US market rely heavily on China and ASEAN. Pan Xiangdong, chief economist of New Era Securities, said that in Vietnam, for example, it relies on raw materials from various industries such as textiles, rubber and plastics provided by China for production.

The return of orders is mainly due to two factors. First, my country has done a great job in epidemic prevention and control and economic and social development. It has taken the lead in resuming work and production, which not only strongly guarantees the domestic market supply, but also supports the smooth operation of the international industrial chain supply chain. The second is that my country has a sound and complete work foundation, both raw materials and chemical raw materials, a complete supply chain, and a high degree of industrialization, so that orders can be completed in the shortest time and at a lower cost. This is also the main reason for the return of overseas orders.

The return of overseas textile orders proves from one aspect that in the face of the turbulent international industrial chain supply chain that is de-globalization and epidemic raging, Chinese manufacturing can play the role of voltage regulator and can have the strong supply capacity of its complete industrial system. , To make up for the temporary order gap and meet the needs of the global consumer market.