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Specialist airfreight: One retailer’s experience

Speed to Market has become so important that the cost to deliver has become a secondary consideration in supply chain logistics and specialist airfreight is now a critical component to delivering Fast Fashion.  However, if you don’t have a partner with super-sized red tape scissors to help you cut through the complexities of Air, then you could be putting you behind your competition.

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I Rent the Clothes on My Back: Fashion and the Sharing Economy

The new collaborative, sharing economy has given us everything from sharing rides, (Uber) to sharing houses, (AirBnB) and now according to Christine Hunsicker, it is time to look in our closets and share our wardrobe. Hunsicker is the CEO of five-year-old Gwinnie Bee clothing rental service. Hunsicker notes that the $2 trillion-dollar fashion industry is ripe for a technology disruption. The “sharing economy” as it has been labeled has disrupted every large business from taxi companies to hotels, and looks like sharing clothing is going to be next.

“A lot of people can’t afford the timeless brands new but they still appreciate the quality,” said Erin Wallace, director of marketing for Crossroads Trading and its sister store Fillmore & 5th, which has opened six boutiques since 2012.

Magellan Logistics Fashion Freight ForwarderOther brands making a success out of breaking the paradigm include Rent the Runway, Bag, Borrow or Steal and ThredUp.

Many of these new businesses are getting funding from traditional sources like individuals and private equity firms including Bain Capital Ventures but also from startup platforms such as Onevest.

Highland Capital Partners, which has more than $2 billion under management, has invested in a number of businesses including Rent the Runway and ThredUp, which focus on Millennials and the shared economy, said partner Dan Nova.   “Just about every major industry is likely to experience disruption (because of the sharing economy),” said Joe Atkinson of accounting and consulting firm PwC, whose April report that found that Millennials are among the most enthusiastic about sharing and account for almost 40 percent of those who have provided something.

Big Players Take Notice

Clothier Louis Vuitton, with revenue at €30 billion annually is not likely anytime soon to feel the effects of millennial consumers’ clothes sharing schemes. However, large retail outlets like Patagonia have taken notice. Recently the outerwear retailer has started the “Worn Wear Rack” program, enticing customers to trade in used clothing that is in good condition for later resale. More telling of what may come in the future is that venture capital financier Highland Capital Partners has invested millions in many of the new fashion sharing startups. One of their investments, Rent the Runway, rents high end designer clothing for a subscription fee. With Forbes magazine estimating that the sharing economy has surpassed $3.5 billion since 2013, the possibilities of a large slice of the haute couture pie could be missing from the big retailers’ bottom line soon.

Not Everybody is a Fan

With disruption of economic models comes backlash. Rioting Parisian cabbies last Summer were angry at the Uber invasion in France, and the government of Singapore confiscated flats that were shared with tourists because of regulatory conflicts. This is to be expected in industries who up till now have randomly set their own prices. Entrepreneurs know that their small piece of an extremely large pie can grow. Accountants Price Waterhouse and Coopers estimate total sharing economy revenues to grow to $ 335 billion by 2025, and PwC’s Joe Atkinson theorise that every major player in the retail industry today will be disrupted by the sharing economy.

Community Comes First

Though there is profit to be made, millennials in particular want to be a part of a bigger community. This is one of the reasons they look to connective technology more when purchasing personal items. Rachel Botsman, author of the book “What’s Mine Is Yours: The Rise of Collaborative Consumption believes that millennials look first at personal connection with any business or corporate entity. With the rise of technology that can cut out middle merchants like retailers and other gatekeepers, the empowerment of younger consumers comes with the feeling that they are part of a bigger peer group.

Environmentalism is also a major driver of this trend. “Instead of paying for something and getting rid of it with no value when you are done – swap and resale gives Millennials the ability to extend the value,” says Jamie Gutfreund, chief marketing officer for Deep Focus (youth trends market research firm. “It’s efficient and it’s green.”

Indeed, 59 percent of Crossroads shoppers said “being an environmentally friendly way to shop” was one of their favourite things about the store.

Investment Precedes Profits

With Uber and AirBnB now valued at over $10 billion one can only imagine what the next few years will bring into the sharing economy. Tens of millions of dollars in capital is being now raised for the sharing of clothing, housing and other staples, with firms lining up to get into the fledgling industry. With the right kind of management, sharing pre-worn clothing can be the next big boom in this new, collaborative environment.

And, as we have seen time and time again, trends that take hold off-shore are soon replicated in Australia – what will it mean for our much loved traditional fashion retail brands?

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Magellan Logistics is a locally owned, Melbourne based freight forwarding and logistics company with offices in Sydney and Auckland and a specialization in freight forwarding and 3rd party logistics for the textiles and fashion sector.  Contact 1300 651 888 or visit www.magellanlogistics.com.au for more information on how we can assist you.

 

Resources:
https://en.wikipedia.org/wiki/Louis_Vuitton
http://www.cbsnews.com/news/sharing-economy-gwynnie-bee-everyday-plus-size-clothing-rental/
http://www.forbes.com/sites/yunitaong/2014/06/23/southeast-asias-sharing-economy-start-ups-may-produce-the-next-airbnb-or-uber/#313a89cd30aa
http://www.collaborativefinance.org/sharing-economy/
http://www.businessinsider.com/r-millennial-nowners-follow-uber-with-new-fashion-trading-model–2015-5
http://www.harpersbazaar.com/fashion/trends/news/a11040/sharing-economy-fashion-apps/
http://www.businessoffashion.com/articles/news-analysis/millennials-follow-uber-with-new-fashion-trading-model

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G20 Shanghai – why is China’s presidency so significant?

In 2016 the Group of Twenty (G20)*, finance leaders and government heads from the twenty major economic countries of the world, will meet in the ancient Chinese city of Hangzhou in the Eastern region of the People’s Republic of China (PRC). With world leaders like U.S. President Barack Obama and other Western dignitaries in attendance the eyes of the world will fall on this vast region of high tech and textile manufacturing near the Eastern coast. While the G20 is principally an economic forum the relationship between economics and climate change will be on show.

Textile Industry Closure

The Chinese government is considering temporarily closing the nearby Province of Zhejiang’s textile manufacturing to reduce air contamination during the G20 summit. This action could possibly idle over half of the textile dyeing industry in China.

While it is too early to say for sure whether the Government will order the shutdown, it has been rumoured that the closure could be three months in length, just before the beginning of the summit. Local government sources quickly stated that it would be impossible for a closure of that length to be achievable given the massive amount of goods that the region produces. Yet experts note that the situation would be quite an opportunity to show how much air pollution could be reduced within the province. This may prove a game changer for the entire region as Beijing had also made agreements during international climate talks in December 2015’s Paris Climate discussions.

China is still somewhat of a closed society for gauging public and international reaction, particularly when large scale events like closing down entire manufacturing regions are concerned. But, one can imagine that complete closure, even for a short period of time, will cause market and industrial disturbances on a significant scale. And it isn’t difficult to imaging the flow-on impact of these on the Australian TCF and retail industries.

China’s G20 Presidency

China’s G-20 presidency in 2016 is themed to help lay the groundwork for a world economy that is more “innovative, invigorated, interconnected, and inclusive.” and that office, China is set to become even more of a major player on the world’s financial and environmental stage.

China’s recent willingness to pursue trade agreements and the imminent inclusion of the reminbi in the group of currencies that determine the value of the IMF’s reserve asset, Special Drawing Rights, China’s capacity to help the world (especially emerging-market economies) cope with market volatility will be greatly enhanced.

This bodes well for China’s capacity to help counter the global slowdown in growth, trade, and investment. And not a moment too soon: The ongoing slowdown is among the greatest risks the world currently faces, because it could compound instability in already-fragile countries, while compelling more robust economies to turn inward, rather than address growing crises.

With a binding greenhouse gas agreement in the works at the United Nations, it behoves China to work within the framework of its own country to solve the issues that industrialisation has brought to the country. If closure of Zhejiang’s textile industry can demonstrate measurable environmental results and throw a spotlight on the problem, then it is possible, with help from other G-20 partners and technological advancement, that the PRC as a whole can work towards improving its air quality, as well as find new ways to grow their industrial might.

With the right mix of realism and power sharing, China’s G-20 presidency has the potential to catalyse important progress to strengthen the foundation of a new global economic structure for the twenty-first century … and to further underscore the importance of environmental commitments in the attainment of this.

*Collectively, the G-20 economies account for approximately 80% of the gross world product (GWP), 80 percent of world trade (including EU intra-trade), and two-thirds of the world population. They furthermore accounted for 84% of the world’s economic growth by nominal GDP from the years 2010 to 2016, according to the International Monetary Fund (IMF).

Sources and more information:
http://schema-root.org/region/international/government/g20/
http://news.xinhuanet.com/english/2015-11/16/c_134822759.htm
http://www.thechinamoneyreport.com/2016/01/02/china-in-2016-fewer-jobs-lower-consumer-confidence/
http://www.weforum.org/agenda/2015/12/how-will-china-use-its-g20-presidency/
http://www.chinatexnet.com/textile-news/2016-02-03/554832.html

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Supply & Demand – Influences that shape your supply chain solution

Supply & Demand:  In the Supply 101 section of the latest issue of RagTrader Jeff Kershaw and Joe Carbone advise on the importance of understanding both the drivers and impacters of supply chain decision making in the pursuit of a bespoke and efficient solution that achieves both business and brand goals while at the same time meeting customer needs.

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India Celebrates Diwali Festival of Lights on 21st October 2014

Importers of Indian goods encouraged to plan ahead

Diwali, the happiest and grandest celebration in India, signifies the start of the Hindu New Year. It celebrates the victory of good over evil, brightness over darkness.

Literally the festival of lights, Diwali is celebrated by illuminating the whole country with small clay lamps (diyas) and candles, with fireworks being set off everywhere.

diwali-festival-india-freight-forwarding-magellan

Diwali is derived from the Sanskrit words dipa (“light” or “lamp”) and avali (“series, line, row”). Dipavali or Deepavalli thus means a series of lights. A variation of spelling and pronunciation depends on the diverse languages of India, where the popular variation is Diwali.

Diwali is a five day festival that usually falls in October or November, depending on the cycle of the moon. This year Diwali begins on October 21st 2014.

The main festivities take place on the third day and the fourth day is celebrated as New Year’s Day. The fifth and last day is celebrated by family getting together, sharing food, and honouring the bond between them.

Diwali is an important celebration for Hindus and is celebrated all over India, with exception to the state of Kerala where the festival is not widely celebrated. According to IMRB, market research firm in India, 91% of Indians celebrate Diwali, making it the biggest celebration in the country.

The grand celebration creates an opportunity for retailers and consumer goods producers to increase sales domestically. Factories and manufacturers typically double their output in the weeks and months prior to Diwali, as both local and export spending increases prior to the festival.

Planning for surge in demand

Within India, logistics service providers usually see an increase in volumes prior to the Diwali season, with a surge in movement of apparel, consumer goods and automobiles.

The textile and clothing industry for instance, where India is a significant player, boost output in the weeks leading up to Diwali, as export demands increase dramatically. To allow for this surge in demand and possible backlog, importers of Indian manufactured goods are encouraged to plan ahead to minimise possible delays.

Talk to Magellan Logistics today to plan your Indian imported goods shipments in advance.

Call 1300 351 888, email info@maglog.com.au or speak with your account manager directly.

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Magellan Logistics featured in Ragtrader Magazine, September 2014

Read the latest power brokers article where our sales director, Joe Carbone, shares his knowledge and experience on the supply chain.

Let us know your feedback in the comments.

(Hit CTRL + to zoom in)

ragtrader-sept-2014-magellan-logistics-joe-carbone ragtrader-sept-2014-magellan-logistics-joe-carbone ragtrader-sept-2014-magellan-logistics-joe-carbone ragtrader-sept-2014-magellan-logistics-joe-carbone

 

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Duty Rate Reduction to 5% for Australian Garment Imports from Jan 1st 2015.

5-percentPositive news for Australian garment importers as legislation passes to reduce duty rate for goods shipments into Australia from January 1, 2015.

The result is a reduction in the general rate of customs duty applicable to a range of garments, homewares and other madeup textile articles, to 5% from January 1, 2015.

For local fashion importers, the news presents a tangible, practical way to reduce expenses and increase profits – a shot in the arm for the fashion retail industry.

 Plan end-of-year shipments & capitalise – ask Magellan Logistics

A little forward planning can be a profitable thing.

If your garment shipment arrives towards the end of December, 2014, you’ll slide in ahead of the potential savings. But ask our experienced team at Magellan Logistics to help and you can arrange to have your fashion freight shipment held for a few extra days so your business can benefit from the duty reduction on (and after) January 1, 2015. You will need, of course, to factor in demurrage and storage fees…BUT, with our Magellan Logistics’ staff on hand to help you crunch the numbers, together we’ll find the most cost-effective way to handle your garment imports.

It’s important to understand that, in your quest to reduce duty costs, you will not be alone. To ensure your business stays ahead of your competition, it will pay to plan for the potential backlog caused by other fashion importers who want to take advantage of post-January 1 deliveries.

Talk to Magellan Logistics today.

We’re here to help you find the garment freight solution that will help your business ship cost effectively.

Call 1300 351 888 or email info@maglog.com.au to further discuss the upcoming duty rate reduction.

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Labelling your imported goods and clothing

When importing your goods into Australia, you must include commerce markings (import labeling) on your goods, or risk substantial penalties and/or your goods seized and forfeited to the Crown for incorrectly labelled products.  In Australia, the Commerce (Imports) Regulations 1940 and the Commerce (Trade Descriptions) Act 1905, outline all the requirements for imported goods.  The Australian Customs and Border Protection Service (ACBPS) oversee this legislation.   Together with these regulations, Standards Australia also set out labelling requirements which must be adhered to including AS/NZS 2392:1999 Textiles – Labelling of clothing, household textiles and furnishings.

What are commerce markings?

labelling your imported goods

Commerce markings are any descriptions, indications, statements or suggestions, direct or indirect with regard to the nature, quantity, quality, purity, grade, gauge, measure, size, and weight, country of origin, the manufacturer or ingredients of goods, among other specifications, which are applied directly on the items or on their packaging.  More detail available here.

The above acts prohibit imports that have false commerce descriptions or those likely to mislead. Commerce markings are meant to give a factual description of the goods in question, to inform the customer about the nature of products. All trade descriptions must:

    • be in English
    • be in prominent and legible characters
    • be on a principle label or the brand, attached in an obvious and permanent position.
    • Include the name of the country where the product is produced

 

Commerce markings for clothing

All textile products and articles of apparel are required to bear true descriptions and their country of origin. Trousers, shorts and skirts should bear their description in their waistband, whilst shirt labels should be affixed in the collar and facing outwards. These labels should be obvious and not masked by other labels.  An example of a correct description is ‘100% cotton’ on a shirt, providing this description is correct. If affixture to the goods is impracticable, the description must be added to the coverings containing the goods. Whilst customs may permit re-labelling of contravening goods where it is considered that the breach was neither intentional nor reckless, you may be asked to provide evidence that you have instructed your suppliers to correctly label goods in future. Click here for more information on labeling requirements for clothing.

For more information on commerce markings specific for your products, contact our customs brokerage team on 1300 651 888.

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