News / Air freight out of fashion with apparel shippers as IT systems get smarter

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In the run-up to Copenhagen Fashion Week, the Danish capital’s airport hosted its own couture event with three of the country’s hottest fashion brands showing off their styles for spring and summer.

The fashion displays were flanked with pop-up dance shows and happenings all over the airport.

The extravaganza highlighted the close link between high fashion and airfreight. However, increasingly sophisticated IT solutions seem to have rendered slower modes of transport adequate for the movement of garments.

High-end fashion remains largely tied to the speed of air cargo, but many labels that blend trendy styles with affordable prices rely on more sophisticated supply chain planning and flexibility provided by better IT infrastructure and eschew supply chain solutions that involve air cargo.

Pacific Logistics, a mid-sized forwarder based in California, has carved out a niche for itself catering for fashion brands that target a teenage audience, such as Forever 21. Teen fashions are notoriously fickle, and they may vary from one region to the next, so supply chains have to be highly responsive and flexible to shift hot merchandise to markets where demand is strong.

Teenagers are not likely to spend large sums on fashion, which means that the items on display at a chain like Forever 21 have to be both cutting edge and affordable, with tops selling for about US$20.

“Teens want what is hot now, and it cannot cost much money,” said Paul Martins, Pacific Logistics’s vp of sales marketing, adding that the modest retail price all but shuts out airfreight.

“Very little of this moves by air. We have some customers who move certain products by air, but this is a small part of the business. Usually this cargo comes in via ocean. We do deconsolidation, then use expedited ground service.

“For us, it means we have to know where the product is all the time and be able to make changes quickly, especially shipping a product to an area where it is hot. We have to manage their dispatch flows,” he said.

The key to successfully managing such fashion supply chains with the necessary degree of flexibility – without having recourse to airfreight – is strong IT capabilities and a close alignment of the systems for forwarders and truckers.

The need for robust and flexible IT capabilities is reinforced by the growing trend in the retail sector to embrace a multichannel sales strategy that blends physical retail space with on-line shopping functionality and offers consumers a choice of options for delivery.

Some carriers regard online shopping for fashion as a catalyst for air cargo, but forwarders like Pacific Logistics emphasise supply chain planning and management capabilities, rather than the speed of transport, noting that retailers have become more sophisticated in monitoring sales patterns and demand shifts.

At the top end of the market, in the high-price, high-fashion segment, airfreight still rules supreme, but even here slower alternatives have made inroads.

Chris Matthews, vp of operations at forwarder Bellville Rodair International, reports that shipper interest in all-water solutions has been on the rise.

At the same time, he said, geographic sourcing patterns have shifted, albeit less at the top end. Luxury brands still produce their core items in locations associated with high-fashion, but accessories are made in lower-cost environments.

“In the past we picked up men’s shirts from Italy, now we get them from Vietnam,” Mr Matthews said.

China still commands the lion’s share of garment production, but rising costs there have prompted a shift to other countries, such as Bangladesh, Cambodia and Vietnam. And Central America has become more relevant for brands targeting the US market. Mr Matthews said he has witnessed some triangular arrangements, where factories in China that used to produce certain items now outsource their manufacture to suppliers in Vietnam.

These emerging economies lag behind China in infrastructure development, but this does not mean a greater reliance on airfreight.

“Ocean transits from the new Asian origins, like Vietnam or Cambodia, are about the same as from China,” said Mr Martins. “The issue is knowing when to release it.”