Inditex stores in India.
RK Jain, representing the Chamber of Commerce and Industry of Mewar in India, stated that the region has around 450 textile manufacturers and 20 spinning mills, all facing contract terminations. Orders are stuck due to congestion at ports with raw materials. Shipping orders is also complicated by changing maritime regulations. If this situation persists, it will result in significant losses.
Meanwhile, Ashwin Chandran, president of the Indian Textile Industry Federation, said, “The current situation is unpredictable, as any increase in logistics costs has a significant impact on operating costs and meeting contractual obligations.” Financial analyst Mr. Kabir Hassan also shares this view: “Even minor cost fluctuations will have a major impact on contracts. The industry relies heavily on imports of raw materials: cotton, yarn, dyes, chemicals, and other supplies. Any disruption in raw material supply will have numerous consequences, directly affecting insurance costs and working capital needs. Lengthening delivery times, coupled with rising input costs, will expose manufacturers to significant risks.”
In reality, the main concern lies in the risk of disruption in the supply of raw materials. Companies in the Indian fashion and apparel sector are concerned about the instability in maritime transport. Not only the Strait of Hormuz, but also the Bab-el-Mandeb Strait – the gateway from the Red Sea maritime route to the Suez Canal – would be affected, forcing shipments to pass through South Africa. This would result in a significant increase in costs and an extension of delivery times by 15 to 20 days.
Air freight connections have also become difficult. Conflicts in the Middle East have led many airlines, like Emirates and Qatar Airways, to cancel or modify their routes. As a result, many clothing shipments are stuck and unable to reach Europe as contracted. Additionally, air freight costs are soaring.
Alexander Nathani, managing partner of Kira Leder, a fashion supplier for Inditex and other Austrian retailers, said, “The cost of air freight from Mumbai to Austria has doubled. Many orders are stuck.” Meanwhile, fashion brands Primark, H&M, and Marks & Spencer still prefer maritime transport due to the high cost of air freight and numerous flight cancellations.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, expressed his concerns: “The conflict in the Middle East is severely disrupting air transport. Furthermore, if the Strait of Hormuz remains blocked, maritime transport costs will also increase. We sincerely fear another major crisis may occur.”
BAO LAM
Source: https://baocantho.com.vn/nganh-cong-nghiep-thoi-trang-nam-a-gap-kho-a200932.html
