South African fashion retailers boost local production amid port delays

China Cultural Tourism and Agriculture

28/02/2024 10:13

By Nqobile Dludla
       JOHANNESBURG, Feb 28 (Reuters) - South African fashion
retailers are ramping up local production and using alternative
sea ports and air freight to mitigate the impact of congestion
at traditional ports that has caused massive delays in stock
deliveries, executives told Reuters.
    State-owned logistics company Transnet said in November the
backlogs at the Port of Durban and congestion at Richards Bay
were due to factors including under-investment in equipment and
maintenance, warning that procuring some of the new equipment
could take as long as 12 to 18 months.
    Although South African fashion retailers have been moving
production closer to home, they still rely heavily on imports,
especially from Asia, for some products.
    TFG  TFGJ.J , the owner of Foschini clothing brand, has
fared better than competitors after it expanded its local
factories and bought new ones over the last seven years. 
    As a result, TFG had enough stock for the key December
festive season, it told Reuters.
    The company added that it did not expect any major
disruptions to ranges for the upcoming southern hemisphere
autumn and winter months and that it was taking the necessary
action, such as ordering earlier and amending destination ports.
    South Africa's autumn season starts in March.
    Woolworths  WHLJ.J  and Truworths  TRUJ.J  are also ramping
up local clothes production, using local suppliers and placing
orders earlier, executives told Reuters.
    Woolworths is placing smaller orders, more frequently, to
avoid having big shipments stuck at the harbour, CEO Roy
Bagattini said.
    It is also directing ships to ports with fewer backlogs,
such as Walvis Bay in Namibia, and then trucking the products to
Cape Town, Bagattini added.
    "Sometimes we look to air freight depending on the product
and category. We fly stuff in, obviously it is costly and is not
sustainable," he said, adding Woolworths would not rely on this
heavily to avoid higher expenses.
    For the autumn and winter seasons, Woolworths is in a much
better shape in terms of stock but not at 100% levels yet,
Bagattini said, while Truworths cautioned there may be some
stock shortages in autumn.
    Truworths said its mitigation strategy also included
sourcing from different countries.
    It's not just fashion retailers grappling with the problem. 
South African food services firm Bid Corporation  BIDJ.J  said
last week it was holding buffer stocks to mitigate the impact. 

 (Reporting by Nqobile Dludla
Editing by Olivia Kumwenda-Mtambo and Mark Potter)
 ((nqobile.dludla@thomsonreuters.com; +27103461066;))