Adieu Asia?

A substantial proportion of the clothes purchased in Germany are “Made in China”. That is what most people would guess, and rightly so. China is the most important country of manufacturing for our textile and clothing imports, ahead of Bangladesh and Turkey. The complexity of the logistics behind this is not quite as well-known. This is evident in the modal split, which is subject to many different influences.

Despite the longer wait times encountered with the handling and port closures – as in Shanghai a few months ago – container ships still account for the lion’s share of textiles transported. However, it became clear in 2022 how quickly this parameter can change. “Last year, for example, freight train traffic between China and Europe almost came to a standstill due to the war in Ukraine,” reported Hubert Borghoff, Vice President and Head of Logistics at Group 7. “That’s why we have been offering more sea-air routes ever since.”

Stephan Wittenbrink, Managing Director of the Fashion & Lifestyle division at Fiege, also noted that the majority of goods still come from Asia, for which sea freight is usually the cheapest and most conventional route. “Time-sensitive deliveries, in particular, are sometimes transported by airfreight, even if this only accounts for a small amount.” From the port onwards, the majority of goods have historically been transported by lorry to their destination.

“However, we are seeing a shift in trend towards rail transport,” said the managing director. In light of this, Fiege already offers various solutions for transportation via rail. This is mainly intermodal freight transportation, which the logistics service provider intends to further expand in the future. According to Wittenbrink, the modal split generally depends heavily on the respective product groups and the countries where the items are produced.

Heavy work for fashion logistics companies like Fiege and Group 7: approximately 47 items of clothing are purchased per capita, per year in Germany, of which around two-thirds are currently sourced from China.

Nearshoring is gaining prominence

Managers at both Fiege and Group 7 are seeing a clear shift in trend towards nearby countries. “Due to the COVID-19 and energy crises, nearshoring is playing an increasingly important role,” argued Wittenbrink. However, in Europe as a whole, there is still a lack of corresponding capacity and – depending on the product groups – also of procurement structures. Production is currently in demand and being expanded, particularly in Turkey and Portugal. North Africa will also gain prominence as a location in the future. “However, we are also seeing the trend of orders from Asia sometimes being placed earlier to compensate for long transportation routes and possible delivery delays,” reported the Fiege manager.

“Production sites in Eastern Europe, Turkey or North Africa, and the countries of Egypt, Tunisia and Morocco in particular are in high demand,” added Borghoff. The logistics service provider finds himself advising more and more on customs clearance and is seeing a rise in demand for lorry traffic from Eastern Europe and Turkey. The Group 7 logistics manager also notes that nearshoring is only part of clients’ strategy and that they are continuing to work with production sites in Asia. At the same time, clients increasingly requested storage capacities in order to achieve stable supply capability.

At Fiege, it is also expected that demand for warehousing capacity will rise in close alignment with the sales market. “In addition, there is an increasing focus on a balanced mix of sales channels, the key words being omnichannel and marketplaces,” explained Wittenbrink. This is why the company primarily offers solutions for warehouse logistics and transportation from a single supplier across all sales channels.