Logistics help strengthen textile-garment supply chain

09:51 | 13/12/2016 Society

(VEN) - Apart from intensive investment, logistics can help the textile and garment sector to improve its supply chain towards sustainable development.  

Photo: Can Dung

Exports continue to experience difficulties

According to the Ministry of Industry and Trade, this year, importers shifted a large number of textile and garment orders to Bangladesh and Cambodia where labor costs are lower than Vietnam. Trung Quy Company General Director Tran Van Quy said that the company’s orders are 30 percent less than last year. The reason is explained to be an increase in input costs, leading to higher production costs. Simple outsourcing orders, therefore, are sent to other countries with lower labor costs.
Pham Xuan Hong - Chairman of the Ho Chi Minh City Association of Garment, Textile, Embroidery and Knitting said that textile enterprises in the southern country are in difficulties. The fourth quarter is usually the peak season, requiring a lot of overtime. However, this year, some members are still lack of orders. Businesses in the association, therefore, have to share orders with others to help them maintain production.

The problem would keep the sector’s 2016 growth under 10 percent - the lowest growth over the past decade. The Vietnam National Textile and Garment Group (VINATEX) alone is expected to maintain a 10-percent export growth - the same as in 2015 - and reach export revenue of US$3.5 billion this year. However, this growth is lower than expected. Worryingly, these difficulties of the textile and garment industry are forecast to continue up to the third quarter of 2017. VINATEX has had a plan for trade promotion, looking for additional markets.

Logistics improvement

The shortage of orders is the consequence of many problems, including higher costs, lack of self-controlled material supply, modest competitiveness and labor shortages. Vietnam Textile and Apparel Association (VITAS) Chairman Vu Duc Giang affirmed that the sector needs to improve its supply chain’s capability to solve their current problems, heading towards sustainable development.

Enterprises should gradually shift to high-value products, which not only adds value to the products but also helps businesses to gain the control of material supply. Furthermore, textile enterprises can choose their own logistics providers, which is more cost-effective, while still supporting local logistics companies. Nguyen Tuong - a representative from the Vietnam Logistics Association said that businesses can combine export and import activities to reduce costs, save time and simplify business procedures, and that they can even share shipments to reduce import costs.

According to Le Van Long, Deputy Director of the South Logistics Joint Stock Company (SOTRANS)’s Hanoi Branch, logistics comprises not only transport operations but also many other factors that can affect the textile and garment supply chain, such as warehouses, packaging and stevedoring. Therefore, improving equipment to increase cargo storage capacity, increasing stevedoring capacity, ensuring warehouse and holding yard safety, and improvement of packaging and loading capability will also help businesses reduce costs and save time.

Logistics service providers in the country need to improve competitiveness, reduce costs, and create maximum convenience for consignees, in order to help the textile and garment industry improve the supply chain capability.

Viet Nga