Trends and News for SMBs (February 1-29)

Trends and News for SMBs (February 1-29)
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Keep your business up to speed with the latest news.

West Coast ports prepare for rising import volumes 

West Coast ports are seeing a surge in volumes, mainly due to rising import volumes from Asia to the U.S. rather than rerouting container vessels away from the Red Sea, gCaptain reported.

January saw U.S. container import volumes jump 9.9% year-on-year, according to data from Descartes.

In the same month, the ports of Los Angeles gained nearly 19% year-on-year, which the port largely ascribed to inventory restocking by retailers and the pre-Lunar New Year rush. Shippers typically hurry to import goods before the closure of Chinese factories for the week-long holiday starting on February 10. The port of Long Beach saw a 17.5% rise in volume in January.

So far, however, fears that West Coast ports would see a major surge in congestion due to the vessels being rerouted away from the Suez Canal around the Cape of Good Hope have proved unfounded. 

“It is not a deluge of freight,” Port of Los Angeles Executive Director Gene Seroka said, according to gCaptain

Some U.S. importers have been rerouting Asia cargo away from the East Coast ports towards the direct Pacific Ocean route and West Coast ports. However, Seroka has reassured shippers that Los Angeles has spare capacity to handle additional cargo.

Earlier in February, the U.S. Department of Transportation held a call with stakeholders to discuss the possibility of increased congestion at some U.S. container ports. Terminal operators said that experience in dealing with supply chain bottlenecks obtained during the pandemic had helped ports to prepare for any possible influx of containers.

Imports from China in January hit their highest level in two years, driven mainly by increased shipments of electrical components, furniture, and chemicals.

With the Houthi militia having stepped up attacks on container shipping recently, it is uncertain if a new wave of shippers will reroute imports away from East Coast ports to avoid potential delays. 

Container leasing rates on the U.S. West Coast have soared by more than 220% due to the crisis, according to online box leasing and trading company Container Xchange.

 

How Vietnam’s “bamboo diplomacy” is fast-tracking shift towards tech hub status

Vietnam’s bamboo diplomacy is proving to be a winning strategy when it comes to helping Vietnam bend and sway with geopolitical currents and is likely to aid the country’s transformation into a major tech hub, according to the Lowy Institute.  

Australia-based think tank the Lowy Institute said that the “bamboo diplomacy” approach whereby Vietnam bends to accommodate good relationships between both the United States and China has proved beneficial in negotiating the nuanced complexities of Southeast Asian geopolitics. “Amid the global rivalry for control of critical supply chains, Vietnam’s role becomes increasingly pivotal,” the institute wrote.

Maintaining good relationships with both the US and China means that Vietnam is able to count on advanced technologies from the former and infrastructure development from the latter. These factors put it on the path to attaining high-income status by 2045. 

In September 2023, President Joe Biden visited Vietnam, and relationships between the two countries were elevated to a “comprehensive strategic partnership.” 

However, Vietnam also strengthened ties with China in December 2023 as both countries pledged to enhance cooperation and rail connectivity.

Indications are that the US is seeking to increase strategic alignment with Vietnam, especially in high-tech sectors. While the most immediate beneficiaries are set to be large US corporations, increased US FDI in Vietnam, worth $500 million in 2022, is creating a substantial tech-supply chain. And the country’s increasingly vibrant tech manufacturing industry is likely to also provide opportunities for SMB buyers from regions such as North America.

Meanwhile, China has promised to upgrade undeveloped railway links between the two countries, enabling easier sourcing of supply chain components from Vietnam’s neighbor. This will help Vietnam’s factories to maintain capacity.

While Vietnam has been a key beneficiary of moves to diversify supply chains away from China, it has nevertheless remained highly dependent on its giant neighbor for upstream supply chain components and raw materials.

China’s FDI in Vietnam in 2022 amounted to $1.7 billion – spanning mostly ICT technology, green technology, and e-commerce logistics.

“Vietnam’s current position is predominantly as a complementary extension to China’s mega supply chains rather than a direct competitor or alternative,” said the institute.

“Vietnam is more likely to remain a complementary cog within the global supply chain networks bridging the gap between upstream suppliers and manufacturers in China and consumer markets in the West.”

This intermediary role underscores Vietnam’s challenges transitioning from a processing hub to a key player.

 

Apparel world prepares for major China trade show

Thousands of exhibitors from across the apparel, textiles, and fashion world will be in Shanghai in early March for one of the global apparel industry’s key events, the Knitting Industry reported. 

Intertextile Shanghai Apparel Fabrics will take place at the National Exhibition and Convention Center in Shanghai, where exhibitors representing everything from fibers and yarns to fabrics and fashion will showcase their products. The event will take place from March 6 to 8 and is expected to attract more than 3000 exhibitors from 25 countries and regions.

The Japanese pavilion will showcase a variety of fashion-forward fabrics, primarily working in cotton.

The Korea pavilion will feature various members of the Korea Fashion Textile Association showcasing eco-friendly fabrics as well as polyester linen, silk, rayon and knitwear. Taiwan is also set to boast its own pavilion with products ranging from functional fibers and yarns to high-end lace embroidery, bridal fabrics, and accessories.

Intertextile Apparel will be held concurrently with Intertextile Shanghai Home Textiles Spring edition, showcasing the entire Textile Supply Chain under one roof, and providing extensive business networking opportunities.

Organizers expect growing environmental awareness to be a key theme of the event, with textiles ranging from organic cotton fibers to recycled polyester zippers.

Exhibitors are expected to be spread across seven halls.

Domestic suppliers from China will be grouped by product end use, with categories ranging from ladies’ wear, suiting, and shirting to casual wear, synthetic leather, fur, and functional and sportswear.

The theme for the overall event will be “turbulence,” embodied in four trends: Grace, Immersive, Switch, and Voices.

“Fashion is becoming driven by ecological consciousness and everyday influencers, and certain elements of the theme’s four trends reflect this,” the organizers told the publication. “Although each is bound by shared disorder, they are distinguished by multiple unique aspects, from Grace’s quiet luxury to Immersive’s expressive style, Switch’s surrealistic experimentation, and Voices’ instinctive fashion.”

 

US job figures boost Philippines garment exporters

Philippine garments and textile goods exporters are feeling increasingly optimistic as US employment figures show unexpected growth throughout 2024, according to reports from the Philippines Daily Inquirer

News that the US economy added 353,000 jobs in January – more than twice as many as forecast – has proved to be music to the ears of apparel exporters in the Philippines and many of the neighboring textile powerhouses. 

US economist at Jefferies Tom Simons told the Financial Times that he was left “near speechless” by the “stunning numbers.”

Chief US economist at Santander Stephen Stanley has told the Financial Times that he recognized that although January’s jobs figure was “exaggerated by seasonality,” the data was “strong across the board.”

Foreign Buyers Association of the Philippines (Fobap) President Robert M. Young said apparel exporters in the Philippines were anticipating a 2% growth by mid-2024.

“In the US, the main cause of the decrease in our garment sales is joblessness. Now it is easing,” Young said, according to the Philippines Daily Inquirer

Young told the publication that exports declined around 5% between July and September but had seen a Q4 improvement. 

The Confederation of Wearable Exporters of the Philippines (CONWEP) has called for improved access to markets like the US to help the Philippines’ garment industry rebound from a recent slump in consumer demand.

“Key to the industry’s survival is market access to the US. Philippine (wearables exports) to the US without preferential tariff treatment remain uncompetitive at a duty of 17%- 32%,” CONWEP Executive Director Maritess Jocson-Agoncillo said, according to reports from the Business World

“Orders were simply not coming in in the second or third quarter of 2023. The stores were cutting down on inventory. Even at the height of the Christmas season, a major brand pulled out and moved production to Vietnam,” Jocson-Agoncillo told the publication. 

The Philippine apparel industry relies principally on orders placed in spring and summer, which start shipping between September and November.

 

MIFF hopes for annual event to top record-breaking 2023 

Malaysia’s Furniture industry is preparing for its cornerstone annual event with hopes that 2024 will more than match a record-breaking 2023, DesignWanted reported.

MIFF (Malaysian International Furniture Fair) will once again be held at the Malaysia International Trade & Exhibition Centre (MITEC) and the World Trade Centre Kuala Lumpur (WTCKL) from March 1 to 4. In 2023, the fair notched up a record-breaking 19% increase in orders. Organized by Informa Markets Malaysia, the latter estimated it to be worth $1.21 billion. 

This year, MIFF expects 20,000 visitors from as many as 140 countries and regions.

Buyers attending the event can also download the new MIFF Furniverse App, which aims to help them source products and meet suppliers at the two venues.

“The all-in-one app provides detailed information on exhibitors’ product offerings, booth locations, special events, and many more,” the organizers told DesignWanted. 

“It adds to the business momentum and networking, which begin long before the opening via the MIFF website to preview new products and pre-arrange appointments.”

Overseas buyers attending the event also have the chance to register for access to a special business event lane to help pass through integration checkpoints at Kuala Lumpur International more quickly. They can also receive limousine vouchers at the MIFF Courtesy Counters.

“This year, we have expanded to 17 halls,” Kelie Lim, General Manager of MIFF, told DesignWanted.

In 2022, Malaysia’s Plantation Industries and Commodities Ministry said the country was the world’s 10th most significant exporter of furniture and furniture components, exporting more than 80% of production, according to a Malaysian Investment Development Authority report. It is regularly ranked among the world’s top 5 wooden furniture exporters. The US is the Malaysian furniture industry’s largest export market. 

 

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