DHL, with an aim to capitalize on the opportunities existing in apparel logistics in India established an exclusive Fashion and Apparel Centre in Tirupur about a year ago since then the effort has been duplicated in Bangladesh, Hong Kong, Pakistan, Sri Lanka and Vietnam. With nominations from many big international buyers to handle their freight out of India, the logistics provider handles over 120 customers in Tirupur. In a recent exclusive interaction with Team AO, Christoph Remund, DHL’s Global Forwarding CEO, shares the strategy behind the centre of excellence and the success it has found… Excerpts from the interview:
AO: What is the major reason behind opening up of an exclusive service centre for the Apparel Industry?
Christoph: As the global leader in air and ocean freight, DHL Global Forwarding is capitalizing on the opportunity in the Fashion and Apparel Logistics Industry estimated to be worth US $ 3.9 billion per annum in South Asia. India, Pakistan, Bangladesh and Sri Lanka alone are estimated to account for well over US $ 2.4 billion in this fast-growing industry. Approx. 2-5% is factored in as logistics costs locally. However, it may differ based on the mode and terms of payment.
In South Asia, finished apparel is the fastest growing segment and is expected to continue to grow rapidly. As manufacturing moves to lower cost countries, supply chains in the fashion industry have become extended and more complex. There are various quotas and trade restrictions on garment imports into Europe and Americas. Our challenge is dealing with these industry issues from South Asia and that is why a need was felt for a service centre that caters exclusively to the Apparel Industry.
AO: Why was Tirupur chosen as the base for such an initiative?
Christoph: Tirupur is not only strategically located but is also catering to some of the world’s best-known brands and retailers, with foreign exchange earnings close to US$ 3 billion. In the last decade, there were many initiatives from the exporting community to cope with increasing and ever changing global demand. Although they did manage to handle this expanding demand with augmented production and stringent quality norms, logistics still remained a major challenge, as exporters were growing very fast and the demands of international trade were constantly changing. Though there are many service providers offering solutions, there was no dedicated structure. We are looking to fill that gap with the service centre.
AO: How have you streamlined the supply chain solutions through the centre?
Christoph: With in-depth understanding of the Fashion and Apparel logistics requirements in Europe and North America, the centre develops customized solutions at origin and enable customers to better manage the product flow further upstream in their supply chain. Significant resources are being dedicated to introducing a range of IT tools to enhance visibility, reporting and exception management. DHL’s services cover the entire logistics value chain of the fashion industry – from material purchasing to the sampling business, to quality control of production and direct delivery to the boutiques of international fashion companies. We also offer transit warehousing facilities
AO: What new is in the offering for the centre?
Christoph: Exporters have appreciated that the center is like an extended logistics arm of customers in Europe and North America – managing the flow of their merchandise and delivering them to the consumers at the right quantity, right place and at the right time. Encouraged by the demand for logistics solutions we are planning to extend the amenities that we are providing by setting up various value-added facilities such as garments on hanger bay. We are also developing fashion specific W/H solutions which will offer quality inspection platforms, kitting, packing and labelling in future.
