After four weeks from its beginning, the conflict between the US and Israel against Iran—adding up to two ongoing ones between Russia and Ukraine, and Israelis versus Palestinians—continues to spread insecurity globally.
Furthermore, it exacerbates challenges in an already critical industrial and commercial landscape, as well as for the global fashion and jeanswear sectors.
The blockade of the Strait of Hormuz has highlighted just how important waterways are for the transport of oil (about 20 million barrels daily) and goods. According to estimates by Shield (SDA Bocconi), 70% of global trade, when measured by value—which equals 80% when measured by volume—occurs by sea.
Recent naval blockades are causing delays of 10–15 days for goods traveling from Asia to other continents, throwing business models and delivery times based on the just-in-time concept into crisis.
The difficulty in sourcing fuel, along with rising fuel and gas prices—and consequently electricity prices—is becoming increasingly pronounced. Similarly, the costs of raw materials have also risen significantly, particularly for petrochemical derivatives, impacting production costs, especially for manufacturers of accessories and chemicals used in dyeing and finishing. Situations of uncertainty, instability, and volatility appear to be on the rise, adding new challenges to a market that is already struggling.
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For the Italian label manufacturer Vivolo, it is important to rely on a short supply chain that can react faster and more efficiently. “In response to this scenario, two particularly critical areas have emerged: market volatility and logistics. This requires brands to exercise extreme caution in their operational planning and to rely on the strength of the short supply chain,” said Luciana Vivolo, chief product officer, Vivolo.
“That is why we are investing heavily in improving the efficiency of our production processes. It is a necessary step to ensure that price increases are not passed on entirely to the end customer,” she added, pointing out that they are watching most closely the US market, where they see an ongoing transformation where the mass market is becoming more premium, but they also noticed that companies tend to make orders based on actual sales, making it impossible to obtain reliable forecasts.
Credits: Alive’N’Kiki