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Textile-Focused Shipping And Logistics

Leveraging advanced shipping and logistics networks can provide significant advantages in an ever more competitive textile supply chain.

By Jim Borneman, Editor In Chief

T he process of moving textile products, whether raw components or finished product, has undergone an evolution that reflects the pressures of globalization, the search for competitive advantages and compliance with customer demands to tightly control inventories throughout the supply chain. A short survey of providers reveals a range of firms, of different shapes and sizes, that not only are interested in textiles, but also are focused on assisting textile firms to capture the advantages offered by up-to-date shipping and logistics practices.

Eagle Global Logistics

Houston-based Eagle Global Logistics (EGL) is working to ensure “flexibility, visibility and IT solutions from cut to finish,” according to Fred Annunziata, vice president, sales, Latin America.

The company has approximately 11,000 employees and had total revenues of $3.2 billion in 2005, nearly $500 million of which was associated with the textile sector.

What are EGL’s strengths? “Global coverage with a strong expertise in fashion logistics and providing visibility throughout the whole supply chain,” Annunziata said. “We are now dealing with logistics folks who have a direct report to the CEO,” he said, pointing to the growing realization that shipping and logistics are an increasingly critical part of a company’s success. On the horizon, EGL sees purchase order management with a direct-to-store concept that bypasses the distribution centers.

When asked what stands out about EGL, Annunziata replied with a four-point answer:
• A single-source, industry-specific multimodal service package streamlines logistics management, reduces administrative burden.
• Reliable, time-definite service worldwide supports quality, product-deliverability goals.
• Cost-effective rates and flexible routing maximize service needs at the lowest cost.
• The total supply chain is visible.

Delivering on factors like these enables service providers to assist textile clients with the type of service demanded throughout the supply chain.

“EGL teams help customers realize the potential of today's global marketplace,” Annunziata said, “by improving and customizing the processes of their supply chain and maximizing its efficiency with cost-effective services.”


Customs And Trade Services

Shipping and logistics involve much more than moving freight. Take a look at Miami-based Customs and Trade Services Inc. (CTS), which has 100 employees focused on textiles and approximately 90 percent of its annual revenues coming from textile and apparel activities.

Norman Gelber, president, sees CTS’ people making the difference. “Our people know our customers, and our customers know our people. Most of our staff has been with us for 10 or more years,” Gelber said. “We handle the biggest and the best of the apparel producers. We have always kept our customers informed of all changes before they happen. We have the most knowledgeable, experienced people providing the highest level of service available in our industry. We know textiles and apparel. We know where it is made and how it needs to be moved.”

How can a company like CTS make a difference? “One company bought a factory in a Caribbean country and quickly realized that it did not know how to proceed. We educated the staff, advised on equipment purchases, and made sure they knew how to ship their goods,” Gelber said. “Today, they tell all who will listen, that they would not be in business were it not for CTS.”

When it comes to the industry’s effectiveness in leveraging logistics, Gelber said: “Too many companies still do not understand the need to have a trained staff and to work with a customs broker and freight forwarder who knows how to help train that staff and to partner with them to achieve the best logistics results. Some companies still think they pay their people to produce apparel and they do not need anyone on their staff who knows anything about shipping.”

What is next for CTS? “We will continue to provide our level of service to the apparel industry, but we will also continue to diversify,” Gelber explained. “We will grow our business with the Far East and with nonapparel companies. We continue to hope the apparel industry will survive and grow.”

Pre-Positioning With Crowley

With $200 million of its $1.1 billion total annual revenues associated with textiles, Oakland, Calif., and Jacksonville, Fla.-based Crowley Maritime Corp., Crowley Logistics Inc. and Crowley Liner Services are dedicated to the textile industry.

“Logistics and speed to market are where the action is today,” said Don Hire, director, business development, Crowley Logistics. “We have a strong presence in the Latin American market — more than 45 years of continuous service in Central America — and we really understand the competitive factor speed-to-market logistics brings to textiles and apparel.”


  ShipCrowley
Crowley Logistics operates four free zone warehousesand three bonded warehouses in Latin America.

Regarding addressing changing needs in the marketplace, Hire said: “We operate four free zone warehouse/DC [distribution center] facilities and three bonded warehouse facilities in Latin America. This allows vendors to pre-position inventory of raw materials and supplies close to the needle for manufacturing. Additionally, these facilities provide the opportunity for consolidation, direct shipments and DC bypass programs.“

With more than 3,000 employees and 114 years in business, Crowley is focused on the future. “ We look toward continued growth in regional transportation within Latin America,“ Hire added. “We expect increased movements of raw material from Asia to Latin America, greater need for warehouse and DC service within the region and continued growth in the direct shipment, DC bypass programs

Meeting Textiles Challenges With Seaboard Marine

There certainly has been a strong initiative among major shipping and logistics companies to capture the growing market of international textile shipping. United Parcel Service, DHL and FedEx all have made overtures to the industry to be primary suppliers of much more than delivery services. Firms like Crowley Logistics, Maersk Inc. and Seaboard Marine Ltd. all have made efforts to participate in the textile industry by offering value-added services that make a difference.

Seaboard Marine, a division of Shawnee Mission, Kan.-based Seaboard Corp., is an ocean transportation company that provides direct, regular service between the United States and Central and South America and the Caribbean Basin.

Wanda Velez-Fernandez, account executive, Seaboard Marine, sees it this way: “We are entering a new era in cargo management. We were very familiar in the past with a market characterized by the absence of regulation, a gradual improvement of services rendered, lower rates and overall availability of services provided. Nevertheless, in the past year, we have experienced the opposite: capacity constraints; increases in fuel costs and vessel chartering agreements; a rise in drivers’ costs; a decrease in availability of truckers due to shortages affecting the intermodal capacity to perform; and a dramatic increase of equipment demand.

“By 2020, US freight volume is estimated to increase by 70 percent, according to US Department of Transportation statistics,” Velez-Fernandez said. “Additionally, a rise in the demand for rail, air and ocean transport also is anticipated to outgrow the supply for at least the next two years. Due to these changes in the nation’s transportation infrastructure, the textile industry has been forced to quickly adapt to meet the supply/demand changes encountered.”

How does the industry cope? Velez-Fernandez offered this assessment: “Transportation leaders must now be completely well-rounded on numerous matters such as regulation of the railroads, motor carriers, airlines and ocean; intermediaries to include brokers, forwarders and 3PLs [third-party logistics providers]; multimodal shipping; principles of contract law for transportation; liability for loss and damage; cargo insurance; importing and exporting; international laws and treaties; and hazardous materials laws and regulations, in order to efficiently comply to the elaborate web that has been knitted around our industry.

Unfortunately, many transportation executives do not have all the tools to respond to the pressures of the market. However, partnering with companies such as Seaboard Marine will alleviate many of these unnecessary stresses of our current market environment.”

Seaboard has more than 5,000 domestic employees and more than 4,000 additional employees within its Latin American and African operations.

“At Seaboard, we have an entire division dedicated to oversee the apparel/textiles cargoes,” Velez-Fernandez said. “With an innovative system that centers around an extensive network of offices and facilities throughout the United States, Central America, South America and the Caribbean, we are ideally suited to expedite your shipments everywhere.

“The apparel/textile division within Seaboard Marine, known as the 807 Division, was created with the vision and the needs of the apparel industry in mind,” Velez-Fernandez said. “It’s a one-stop shop of boutique services, time sensitivity, proactive expertise, personalized service and seamless link in the supply chain. We believe in developing coalitions and strong cohesion between all parties involved in the supply chain.”

Serving clients such as Gildan Activewear Inc., Oxford Industries Inc., Jockey International and Gear for Sports Inc., Seaboard’s commitment is more than apparent. “Above all,” Velez-Fernandez added, “we are committed to the apparel industry as well as the countries we service, as it is our main interest to build trust and reliability among your supply chain partners.”

Maersk: Truly Global

With US headquarters in Madison, N.J., and global headquarters in Copenhagen, Denmark, Maersk is a leading firm in ocean transportation as well as a broad range of logistics services.

“We are truly global — as are our customers” said Brian Moore, sales. “Maersk has its own proprietary offices in virtually every apparel-producing nation in the world. We prefer to control our own operations as much as possible and, thereby, the merchandise our customers entrust us with. Apparel sourcing can shift dramatically, and our customers appreciate the fact that they do not have to get involved with a new service provider every time they source from a new country.”

When asked about the type of client Maersk serves, Moore said: ”In the apparel and textile arena, we provide services to a wide array of clients from the largest retailers to the smallest family-owned apparel wholesalers. Because there is no one-size-fits-all in the logistics business, we work closely with our clients to provide the level of service that they require, from the simple to the very sophisticated.” With US headquarters in Madison, N.J., and global headquarters in Copenhagen, Denmark, Maersk is a leading firm in ocean transportation as well as a broad range of logistics services.

“We are truly global — as are our customers” said Brian Moore, sales. “Maersk has its own proprietary offices in virtually every apparel-producing nation in the world. We prefer to control our own operations as much as possible and, thereby, the merchandise our customers entrust us with. Apparel sourcing can shift dramatically, and our customers appreciate the fact that they do not have to get involved with a new service provider every time they source from a new country.”

When asked about the type of client Maersk serves, Moore said: ”In the apparel and textile arena, we provide services to a wide array of clients from the largest retailers to the smallest family-owned apparel wholesalers. Because there is no one-size-fits-all in the logistics business, we work closely with our clients to provide the level of service that they require, from the simple to the very sophisticated.”


The smart companies that will be the eventual winners in the apparel industry are those who look beyond the transactional and into the strategic,” Moore said. “They link themselves together with their vendors and logistics suppliers to avoid costly duplication, and take costs out of the system while accelerating their merchandise through the chain. The winners have realized they needed to put emphasis on the logistics portion of their business.

“The full-package nature of the apparel business today may take some time out of the actual production cycle, but the trade-off is that production is further away from the end-user. In order to ensure there is a reduction in the time required from design to delivery, each portion of the chain must be analyzed carefully; and to prevent a silo mentality, there needs to be an officer who holds responsibility for all facets of the process,” he continued.

In terms of the future, Moore said: “We see opportunities to grow in all facets of our business. The core business of moving containers will grow according to the market, as will the amount of new vessel capacity and services that we start. Growth within the value-added services of logistics, warehousing, brokerage, air freight and trucking will expand at a greater rate, as those are areas where the customers have expressed strong interest in development, and they see the possibility to spend a few dollars to save a lot.”
 

ShipMaersk

 
Maersk, a leading company in the field of ocean transportation, provides tailored services to all its customers from large retailers to small, family-owned businesses.


FedEx Does More Than Deliver
The textiles and apparel industries face complexity like never before,” said John Wilkins, apparel, footwear and textiles consultant, Memphis, Tenn.-based FedEx. With more than 250,000 employees and contractors worldwide, and revenues of $29.4 billion in fiscal year 2005, FedEx offers a textile solution.

“FedEx has invested heavily in technologies that provide our customers access to the information they need with services like FedEx InSight and Global Trade Manager. The ongoing movement of goods around the globe creates challenges such as lab dips and sample rolls being held in customs, total landed costs that constantly change as companies modify their sourcing base and the risk of discovering that a new contractor might be on a denied parties list,” Wilkins said.

“FedEx also works with shippers to implement powerful enterprise-wide shipping management systems on dedicated servers. These systems can provide electronic data interchange capabilities, centralized shipping account management and control, electronic billing and accounting control; and can apply business rules to different kinds of shipments for different scenarios so that shippers within a company do not use services they do not need,” Wilkins said. “These systems can often be integrated with a company’s own product-data-management systems and other warehouse-management systems,” he continued.

“The apparel business is much more complex than ever before, but FedEx has the expertise and resources to help our customers navigate global commerce,” Wilkins added. “FedEx is the largest customs broker in North America and works with our customers to help them understand US customs and regulatory agencies.

"For example, through FedEx Trade Networks Trade & Customs Advisory Services, we help our customers take actions to avoid customs delays and improve their supply chains with programs that guide them through the C-TPAT [Customs Trade Partnership Against Terrorism] audit and certification process. Throughout the entire process, our visibility tools provide easy-to-access information for our customers to see where their inventory is at all times.”

In terms of creative solutions, Wilkins said: “We developed a system for a large vertical retailer that allows the retailer the ability to replenish goods direct-to-store from overseas without having to pass through a domestic distribution center. Goods that are shelf-ready are tendered to FedEx overseas, are electronically consolidated, and are then electronically entered into the United States as a single entry — prior to the goods actually arriving. When the goods have entered, they are then moved into the domestic Express network and delivered to stores all around the country.

“This system was developed to allow the retailer to postpone allocations until the last possible minute in order to distribute goods to the stores where color sell-throughs or weather are having an impact on specific SKUs,” Wilkins said. “The retailer can keep inventories in check — consider four days from factory to store in this scenario versus three to four weeks on the water, maximize margins through better allocations and decrease stock-outs.”

When asked if the textile industry is leveraging the logistics successfully to be faster, better, cheaper, Wilkins replied: “‘Faster, better, cheaper’ are crucial concepts to the textile industry, but it is equally crucial to think about those concepts in a very comprehensive way. ‘ Cheaper’ can mean smaller checks to the transportation provider, reduced inventory-carrying costs or reduced markdowns based on a faster replenishment system.

"At FedEx, we would like to see more companies in the industry approach transportation from the standpoint of how it can help grow a business and how it can help impact other lines on the profit and loss [P&L] statement like markdowns, interest charges and the top sales line. For example, an appropriate transportation strategy can help a company enter a new geographic market without having to invest in additional DCs. A number of best-in-class companies have taken this approach, but more should follow. A key to this approach lies in spending time understanding how transportation and speed fit into a company’s unique supply chain, P&L and balance sheet.”

ShipFedEx

FedEx Trade Networks helps customers of all sizes solve the intricacies of shipping goods globally through customs brokerage, international freight forwarding and trade facilitation solutions.  

Future Challenges
Listening to the responses from some of the key players in textiles-related shipping and logistics clarifies the need for partnering and collaboration. The scope of services, ability to coordinate movement and visibility provided by today’s solutions are making a difference for textile firms, both large and small. With increased efficiencies, there are increased expectations throughout the textile supply chain to know, understand and utilize the services available.

As Wilkins at FedEx said: “The industry still has a lot of upside potential in leveraging transportation. Too often, some companies still appear to approach transportation tactically or as a commodity purchase.”

The consensus is that if shipping and logistics solutions have not been leveraged, the affected company is inadvertently falling behind, for no other reason than not understanding and prioritizing shipping solutions. “Creative strategies,” said Seaboard Marine’s Velez-Fernandez, “ are now becoming a day-to-day experience when it comes to making transportation decisions affecting the supply chain management and logistics.”

That is another area where the textile industry must innovate and collaborate in order to stay relevant in a global marketplace.

March/April 2006




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