On May 16, 7.0349 million trucks passed through the country’s highways, a month-on-month increase of 16.35%; the country’s key ports completed a cargo throughput of 36.652 million tons, a month-on-month increase of 9.6%; postal express delivery collected approximately 314 million pieces, a month-on-month increase of 9.0%. Deliveries were approximately 329 million pieces, an increase of 1.2% month-on-month. As of 24:00 on May 16, there were no toll stations or service areas temporarily closed on highways across the country.
Since the Spring Festival, domestic freight logistics has been blocked due to the epidemic, which has troubled all companies. Both raw materials and finished products are difficult to circulate, leading to delays, reductions, and cancellations of orders… In short, the difficulty in transporting goods has caused a reduction in demand in the entire domestic market. At present, my country’s transportation arteries have been basically opened, which means that the transportation of goods will gradually begin to return to normal.
The package was finally received but the order was cancelled.
Logistics was smooth and express delivery was delivered normally, but everything seemed to come too late. Recently, a textile boss said that the express delivery in March was finally delivered, but after receiving it, the customer told him that there was no need to analyze and find samples anymore, and he instantly felt that a large number of orders had been lost. A courier delivery comes after two months. Especially for time-consuming goods like clothing, the day lilies have already become cold. Either the supplier would have been found to produce this order long ago, or it would have been aborted.
As textile workers, everyone is very familiar with the order-taking process. Without the customer’s initial sample, it is impossible to receive an order. However, due to logistics control, we can’t even get samples from customers, so how can we talk about orders? Therefore, since the Spring Festival, the order-taking atmosphere in the entire textile market has been sluggish and transactions have been rare.
Order completed but not shipped
It’s not just domestic logistics that affects companies’ orders, but also foreign logistics, which has been plaguing companies for three years. Since the outbreak of the global epidemic, international logistics has been overcrowded and freight rates have soared, which has not only led to increased corporate costs but also the loss of many orders.
A textile friend of the editor revealed that he finally received several orders this year. When the production was completed, the customer requested that the goods not be shipped temporarily due to the high sea freight and the paralysis of the receiving port. But it has been on hold for 2 months, and until now, I have not received a delivery notice. The occupancy cost of 110,000 meters of Oxford cloth is more than 1 million, resulting in difficulty in capital turnover. Not only that, I was even worried about whether the customer still needed this batch of goods, because he was an old customer, and he didn’t even receive a deposit. This is really worrying my friends. The risk of taking orders this year is really too great.
Raw material prices will rise after the end of this year, and the weaving market is still not very enthusiastic about stocking up. The main reason is that the price increase of raw materials this time is too large and the time is too urgent. The most intuitive manifestation on the fabric side is that the price of gray fabrics has basically remained unchanged before and after the year, and is even sometimes lower, while the price of raw materials has increased by a thousand yuan per ton. We must know that the current profits of downstream fabric products are mostly only about 10%, and a sharp increase in costs will eat up all profits. Many textile companies said that most of the products produced in the first half of the year were orders from the previous year, and if they maintained the original price, they would inevitably suffer losses. Today’s orders are rare. If the price is raised, customers will naturally not accept it, and the only loser will be the factory. Even so, customers may hesitate to place orders. In the end, traders and customers are often in a stalemate, and orders are delayed and canceled from time to time.
According to an outdoor fabric trader, this year they have also raised fabric prices due to the increase in raw material prices. However, end customers simply do not accept it and all orders have been cancelled. Now they only have some proofs on hand and no decent orders. This year The market situation even feels worse than last year.
Now that the weather has finally cleared up in China, the recovery of logistics will naturally bring a wave of orders, but the quantity is ultimately limited. June is coming, which also means the traditional off-season is coming. The production season for summer clothes has long passed, and now there are only some small batches of replenishment and reordering. Coupled with poor demand in previous years, the supply of clothing exceeded demand, and previous inventory continued to be sold in stores, so there was less demand for new orders.
The dissipation of the epidemic and the smooth flow of logistics will be good for the entire industry, and a recovery in the market may be just around the corner. However, the future is still full of challenges and difficulties. Especially when receiving foreign orders, we must find ways to minimize risks as much as possible. Once a crisis does arise, the other party will not be lenient when canceling the order. If you can collect a deposit, try to collect a deposit, which will increase the sunk cost of the other party canceling the order. The risk of accepting foreign trade orders is no longer the same as before.
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