Fashion retailers boost local production amid port delays

Fashion retailers are ramping up local production and using other ports and air freight to mitigate congestion at traditional ports that has caused long delays in stock deliveries, according to company executives.

State-owned port and rail operator Transnet said in November backlogs at the port of Durban and congestion at Richards Bay were due to factors including underinvestment in equipment and maintenance, and warned that procuring some of the new equipment could take as long as 12 to 18 months.

Though fashion retailers have been moving production closer to home, they continue to rely heavily on imports, specially from Asia, for some products.

TFG, the owner of Foschini clothing brand, has fared better than competitors after it expanded its local factories and bought new ones over the past seven years. As a result, TFG had enough stock for the December festive season, it said.

The company said it didn’t expect major disruptions to ranges for the autumn and winter months, and it was taking the necessary action, such as ordering earlier and amending destination ports.

The autumn season starts in March.

Woolworths and Truworths are also increasing local production of clothing, using local suppliers and placing orders earlier, company executives said.

Woolworths is placing smaller orders more frequently to avoid having big shipments stuck at the harbour, CEO Roy Bagattini said. The company is also directing ships to ports with fewer backlogs, such as Walvis Bay in Namibia, and then trucking the products to Cape Town, he added.

“Sometimes we look to air freight depending on the product and category. We fly stuff in. Obviously it is costly and not sustainable,” he said, adding Woolworths wouldn’t rely on this heavily to avoid higher expenses.

For the autumn and winter seasons, Woolworths is in a much better shape in terms of stock but not at 100% levels yet, Bagattini said. Truworths has cautioned there may be some stock shortages in autumn.

Truworths said its mitigation strategy included sourcing from different countries.

It’s not only fashion retailers grappling with the problem. Food services group Bidcorp said last week it was holding buffer stocks to mitigate the impact.

Reuters