South African fashion retailers are collaborating with local producers to explore alternative sea ports and air freight options to counteract the disruptions by congestion at ports, resulting in significant delays in stock deliveries.
Transnet, the state-owned logistics company, attributed the backlogs at the Port of Durban and congestion at Richards Bay to various factors, including inadequate investment in equipment and maintenance. The procurement of new equipment was projected to take between 12 to 18 months, as stated by Transnet in November 2023.
While South African fashion retailers have been shifting production closer to home, they continue to heavily rely on imports, particularly from Asia, for certain products.
TFG, the parent company of the Foschini clothing brand, has outperformed competitors by expanding its local factories and acquiring new ones over the past seven years. Consequently, TFG was well-prepared with sufficient stock for the crucial December festive season.
TFG assured in an interview, that it anticipates no major disruptions in product ranges for the upcoming autumn and winter seasons in the southern hemisphere. The company is proactively taking measures such as placing orders earlier and adjusting destination ports to mitigate potential challenges.
Woolworths and Truworths are also scaling up local clothing production in Africa, by engaging with local suppliers and placing orders in advance. Woolworths, for instance, is adopting a strategy of smaller, more frequent orders to prevent large shipments from getting stuck at congested harbours. The company is redirecting ships to less congested ports like Walvis Bay in Namibia and then transporting products to Cape Town via trucks.
Both Woolworths and Truworths are exploring diversifying sourcing countries as part of their risk mitigation strategies. Woolworths mentioned considering air freight for specific products when necessary but emphasized the need to avoid excessive reliance on it due to the associated high costs and sustainability concerns.
While Woolworths is in a relatively good position regarding stock levels for the autumn and winter seasons, Truworths cautioned about potential stock shortages in autumn. Truworths highlighted sourcing from multiple countries as part of its risk mitigation plan.
Beyond fashion retailers, South African food services firm Bid Corporation recently disclosed its strategy of maintaining buffer stocks to offset operational disruptions.
