It has been two years since the first round of COVID-19 lockdowns, and just as things were starting to look better, the Russia-Ukraine war happened. The effect of this war is already being felt in other areas, especially trade. The question obviously is this: is the global apparel industry ready to handle a crisis when the earlier one is actually still raging on?
In all my years in the apparel industry I have learned that we are very experienced in dealing with crises. This is logical for such a globalised industry. It is naturally exposed to crisis situations because always somewhere in the supply chain there is a crisis. Of course, the pandemic and the Russia-Ukraine war are particularly harsh and extensive and certainly most of the industry is affected and some companies have suffered.
The first to feel the pinch in early 2020 was shipping. Though opinion is divided about whether the shipping sector in the wider logistics industry was able to sort out matters in these two years, the Shanghai port situation shows that there are still problems. In between, the Suez crisis had brought trade to a standstill. How do you see this? How will all the shipping crises re-shape the global apparel trade?
Perhaps shipping was simply too cheap, and we were acting like distances didn’t exist and transportation does not create environmental costs. So p,erhaps in a new normal, occuring when supply and demand are better balanced again, prices will be structurally higher. And perhaps some of the supply chains will be brought closer to the markets as a result, to save costs, but especially to avoid the high costs of delays. A structurally higher price level of ocean and air transport could also point to the oligopoly of just a few major global shipping companies.