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COVID-19 compels brands to diversify their sourcing

Latest research by Panjiva, the supply chain intelligence unit of the impact of Voronavirus has led to brand’s diversifying their supply chain to newer countries. Levi Strauss and Adidas have increased their imports from Cambodia while Uniqlo parent Fast Retailing has moved sourcing to Vietnam. Ralph Lauren’s import mix has also changed over the past two years, with its seaborne imports declining to 25.4 percent of the total in 2019 versus 34.6 percent in 2018.

The same was also true in consumer staples, where membership warehouse club Costco Wholesale Corp. outperformed the sector by 16.5 percent with 0.29 TEU per million COGS and 0.09 percent reported Asian exposure. Data also showed imports from Asia fell 10.7 percent year-over-year in the three months ended Feb. 29, 2020. Pricesmart Inc had zero per cent reported Asian exposure, but it underperformed the sector by a negative 13.3 percent. That’s because its Asian supply chain exposure was much higher, at 1.43 TEU per million COGS.

Panjiva believes that using containerised freight imports, as measured by TEUs, from Asia against a neutral measure of a company’s supply chain is a more nuanced measure across an apparel company’s business.

 
 
 
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