Goddess of logistics

 

While Aphrodite is the Greek goddess of love, beauty and sexuality, if you tack Fashion Solutions on to the end of her name you’ve got one of the biggest garment contract distribution warehouses in NSW.

Ten years ago Con Christodoulou and his father stood in their Wollongong garage looking at the remains of a busy making-up factory. An old boiler and some tired sewing machines were all that remained after every one of their customers switched from Australian production to imports.

“It happened so suddenly,” Con recalls. “Two weeks before Christmas the work stopped coming in. We had 40 machinists and nothing for them to do. We were told that it was over. I looked at Dad and said, ‘so what do we do now?’”

What they did was to capitalise on the lessons that pressing and making-up had taught them about the fashion industry: that many volume importers didn’t want to waste their time unpacking containers, picking orders, moving stock around and dispatching it if somebody else could do it more efficiently. Father and son decided to take a hair of the dog that had bitten them and re-enter the trade from a different angle.

Today Aphrodite Fashion Solutions operates from two locations in Alexandria (NSW) covering 10,000 square metres.

It handles up to 50 containers a week, or about 20 million garments a year, for Specialty Fashion Group (Millers and Katies) , Apparel Group (Sportscraft and Saba), Farah Menswear and many others. A mobile conveyor belt has cut unloading a 40-foot container from four hours down to one hour.

Also in the name of efficiency, the biggest steam tunnel in the southern hemisphere, has just gone into production at Aphrodite’s Bourke Road warehouse. It will dramatically speed up steaming, which costs about 10 cents a garment as opposed to 40 cents for hand pressing and is responsible for about 95 per cent of garment preparation to go into store.

According to Con, the most cost-effective way to handle garments in containers is to have them packed in cardboard boxes. Container hanging was tried but, although it saved on steaming or pressing, it was defeated by space wastage.

Aphrodite does more than open containers and dispatch goods to retailers ready for sale: it offers stock replenishment services, electronic data interface (EDI) and direct links to transporters like Toll and TNT. For its major customers it will hold stock for up to six months – a very handy offer in the current snail’s pace winter season.

Con’s next milestone is to add freight forwarding to his business so that it becomes a one-stop logistics shop.
In terms of exporters, he says that China is head and shoulders above other Asian garment suppliers, especially Bangladesh where most deals are price based.

The cartel is alive and well

Some months ago I took international shippers to task over colluding on freight prices. To my astonishment, they took no notice of me. In fact, they’ve come along with a fresh raft of charges that make the last lot look timid.

To recap, AADA stands for the Asia Australia Discussion Agreement, a collection of 12 ocean carriers serving the trade from north and east Asia to destinations in Australia. Its members are ANL Singapore, CSCL, Cosco, Hamburg Sud, Hanjin, Hyundai Merchant Marine, “K” Line, MSC, MOL, NYK, OOCL and Gold Star Line. Most of the apparel coming from China to Australia would be carried by AADA members.

For shipments from Japan, Korea, China, Taiwan and Hong Kong, the container rate increase went up in July by $250 for a 20 footer and $500 for a 40 footer, plus a peak season surcharge of $300 and $600 respectively.

There’s more to come. From 15 September  and again from 15 October another $250 and $500 will loaded on to the price of sea freight containers.

Importers know, of course, that better rates can be negotiated on the spot when shippers run into seasonal under-capacity, but the fact that they, as a group, can dictate rates is nothing short of outrageous. What happened to competition or market forces? What happened to our self-righteous Australian government? If this keeps going consumers in Australia will be purchasing freight as the main component of their imported garments.

These rate hikes are not all bad news. If you’re an Australian contract maker you become a little more competitive every time container rates rise, to say nothing of all the fee gouging between wharf and warehouse in Australia. But how would it be received if there was a body called the ‘Makers Discussion Agreement’ in which all signatories agreed on a set price per stitch for machining, or the charge per hour for pressing? Every watchdog organisation in Australia would be turned loose on you.