Olympic spirit lost on logistics

NATIONAL: Fashion retailers are expected to keep a nervous vigil on domestic ports tonight as the Beijing Olympic Games kick into full gear.

International supply chain and logistic providers have reported delays in cargo transportation as Beijing's traffic system goes into lockdown. Chinese Government efforts to reduce emissions during the event have resulted in limitations on transport in and around the Beijing district and major northern ports Tianjin/Xingang and Qingdao.

Current restrictions in Beijing include a limit on the number of trucks weighing in excess of three tonnes and a limit on trucks registered in other provinces. Australian logistics company Dean World Cargo said warning bells had been issued to retailers about the potential impact this could have on their supply chain.

"Based on our sources, Shanghai is still up in the air but currently not expected to be impacted significantly," an internal newsletter stated. "Beijing's local Tianjin/Xingang port will be affected due to traffic control issues and now already implemented special cargo handling and restrictions to hazardous materials."

However, sea freight is not the only mode of transportation believed to be affected by traffic restrictions. According to Dean World Cargo managing director Bruce Haines, security measures at Shanghai airport could also see a delay in air export shipments. Under the new measures, all export cargoes must be scanned by X-Ray or subject to a further holding period of 24 hours within the PACTL terminal.

"This new measure will last at least up to the end of the Olympic Games and it will cause a slight delay for our air export shipments during this period," Haines said.

It is believed the delays have caused a quiet panic among many freight forwarders, with many ignoring - including TNT and DHL - ignoring calls for comment when approached by Ragtrader. Colin Griffin, Toll director of business development and supply chain solutions in Asia, said he could not comment at the time of press but would happily contribute to future stories "depending upon the subject matter."

Dean World Cargo said retailers which had responded to earlier warnings about transport restrictions would remain relatively unscathed. Youth retailer Sportsgirl, which reportedly receives two to three product drops in each store each week, has recorded minimal disruptions in imports from China. Apparel buying manager Gavin Gage said a broad product offering across apparel, footwear, accessories and cosmetics meant the retailer planned its supply chain well in advance. 

"As a business we expected delays in supply chain so we strategically planned deliveries to be freighted ahead of the games and ready in our distribution centre prior to the Olympics commencing," he said. "This has ensured a consistent flow of stock to our stores for our girl who consistently craves point of difference and newness. We have had little to no effect."

According to IBISWorld figures, Chinese imports currently represent about 62 per cent of all clothing imports into Australia. Industry analyst Raghu Rajakumar said it represented the largest trade segment in Australia's fashion industry, no doubt reflecting the extent of the latest supply chain lockdown.   

"Low wages and input costs give Chinese firms a competitive advantage over other countries that produce clothing," he said. "Improvements in the quality of many Chinese imports in recent years have resulted in large volume increases - they are expected to stay at this level [over the next few years]."

By Assia Benmedjdoub