U.S. Suppliers Dwindling

The number of apparel suppliers shipping goods to the U.S. dropped precipitously in the year ending Oct. 31, falling more than 85 percent in the 12-month period.

There were 6,262 apparel suppliers actively sending shipments to the U.S. at the end of October, down from 43,653 a year earlier, according to a report being released by Panjiva Inc., a New York-based firm that helps brands evaluate factories.

The report, drawn from U.S. Customs and Border Protection data and other sources, illustrates an accelerating drop in the number of apparel suppliers. The supplier count fell to 22,099 in July, 16,969 in August, 11,513 in September and 6,262 in October, a decline of more than 70 per cent.

Josh Green, chief executive of Panjiva, said the numbers “paint a frightening picture of the state of the world’s suppliers”. 40 per cent of the suppliers still listed as active had seen year-on-year drops of 75 per cent or more in the volumes they were shipping to the US.

The percentage of active suppliers based in China and Hong Kong has remained steady at about 60 per cent – suggesting that the effects of the slowdown are being felt equally across the global clothing supply chain.

China had already been seeing some consolidation in the number of its export factories due to rising domestic costs, even before the US economic crisis worsened.

In China, government statistics estimate that at least 67,000 factories across all sectors closed during the first half of the year.

The credit crisis could be pushing some big apparel buyers to direct their orders to suppliers that they know well, to reduce risks of problems with fulfilment. It may be that the retailers are focusing on those suppliers with whom they’ve had a longer and closer relationship.

Panjiva also tracks what types of products a supplier ships, which materials it has used, what types of customers it serves (premium, mass, discount or niche), whether it is sending shipments to the U.S. in excess of its own capacity or whether its shipments to the U.S. suggest available capacity.

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