Shipping challenges will continue to dominate supply chains throughout 2022
Representing more than 1,000 world famous name brands, the American Apparel & Footwear Association (AAFA) is the US national trade association representing apparel, footwear and other sewn products companies, and their suppliers, which compete in the global market. AAFA President & CEO Stephen E Lamar speaks to Fibre2Fashion about the association’s perspective for the industry in 2022.
What are your key takeaways from the textile and apparel industry developments in 2021?
In the past two years the industry has faced some of its greatest challenges in our history, from COVID-19 to the recent supply chain crisis. Many of these will continue well into 2022. At the same time, it has taught us that we can innovate on a dime and has highlighted numerous areas – such as better balance in the supplier/buyer relationships – where improvement is needed to bring the apparel and footwear industry sustainably and responsibly into the future.
Does 2022 seem to be as uncertain as 2021? Which factors would you rank as of topmost concern?
Yes, and perhaps more so. Continued COVID-19 and logistics and supply chain challenges will remain in the headlines for the foreseeable future. Diversification of supply chains, incorporating more traceability and transparency into those supply chains, attaining more balanced supplier/buyer partnerships, and achieving ESG (Environmental, Social, and Corporate Governance) targets will be top areas of focus and action for the industry.
By when do you expect the challenges of shipping industry to ease? Also, how pressing could be the labour issues for the textile and apparel industry?
Shipping challenges will continue to dominate supply chains throughout 2022. We still have a long way to go to unwind the bottlenecks we experienced during 2021, and we face new challenges – such as uncertain COVID-19 variants, worker shortages in the trucking industry, or the looming expiration of the West Coast port labour contracts. In the US, the Biden Administration needs to stay focused on easing this congestion, continuously bringing all players to the table and ensuring that all tools are deployed to provide relief to an industry struggling under epic freight costs and punitively high tariffs.
Do you expect any significant movement in textile and apparel supply chains in 2022 due to the geo-political scenario, particularly the US-China tension?
Yes, in a trend that has been underway for some time, and which has accelerated in recent years, we expect to see continued diversification of supply chains out of China and into other parts of the world. While China will remain an important partner and market for the industry, companies have been implementing diversification plans for a wide variety of reasons. As companies continue to pivot and evolve their supply chains, they will continue seeking partners and solutions to ensure that these supply chains are sustainable, agile, compliant, vertical, affordable, and close to consumers.
On the demand side, do you expect a significant pick-up beyond pent-up consumption in 2022, without government support?
The US consumer has been an engine of economic growth for the United States, and that will continue into 2022. A key point will be whether inflation is brought under control and how far consumers will be able to stretch their purchasing power. We’ve been advocating robust actions – such as tariff relief – to help reduce these inflationary pressures.
Following the recent COP26 meeting and given the textile industry’s influential role in climate change, what major developments do you expect in 2022?
The industry will continue to align around and push forward on science-based targets as part of a broader push on ESG. Sustainability needs to be an industry-wide initiative, not a competitive advantage. As we saw during COP26, much more needs to be done – NOW – to protect our planet. There are already many sustainability leaders in our industry. It is essential that we work together, pre-competitively, to ensure that the industry plays its part in meeting our climate change targets.
Related to this, would you say brands will increasingly start focusing on sourcing with sustainability/ethics as a factor?
Absolutely, and that will happen even more. Sustainability is now part of the industry’s DNA, and we must work with our stakeholders each day to show how this is true.
Will we see greater technology adoptions in 2022 to solve transparency and traceability issues in the supply chain?
Yes. The industry is pushing further back in its supply chain than ever before and asking for more information than ever before. Compliant supply chain partners are eager to demonstrate how they are part of these traceability solutions. Technology will play an increasingly important role in keeping the industry aligned around these traceability goals and ensuring they can be adequately communicated to our stakeholders.
Energy prices are currently a major concern across the world – how do you see them continuing and what business strategies can we expect to cope with them?
A key to achieving science-based targets, and to reducing and eventually eliminating the industry’s carbon footprint, will be the ability to deploy more sustainable and renewable energy operations. As more demand, and consequently more investment, is created for these solutions, these prices will begin to drop reinforcing the cost economics of a more sustainable approach.
Lastly, any changes in the textile and apparel business model that you expect?
Technology will continue to shape our future – not just in how supply chains interact but also how the industry connects with consumers and its employees. We will also see a more holistic approach to supply chains since they don’t function properly if they don’t function responsibly. Key to this will be the ongoing rebalance of buyer-supplier relationships and making sure our efforts continue to be worker-centric. Lastly, we will continue to see an evolution towards a more values-based focus. Not only do consumers want fashion that align with their own values, but employees want to work for companies that share these values as well. (RKS)
