Friday 28th Oct 2016 - Logistics Manager

Millions of pounds worth of clothes stuck in warehouses

As Logistics Manager went to press the crisis caused by the strict new clothing quotas imposed by the EC was worsening with about £550M worth of Chinese clothing stuck in warehouses and ports around the EU unable to be moved.

The British Retail Consortium (BRC) believes that every fashion retailer will be hit by the current crisis caused by the clothing quotas, imposed in June, and predicts that shortages in stores will be sooner, rather than later.

Alisdair Gray, director of the BRC in Brussels, says: “We have a series of members across the board who have ordered a significant amount of product which is held up in transit. This will affect everybody.”

And Gray does not believe the situation will be resolved “for at least a month”. “This is a period of uncertainty,” adds Gray. “There is no stability in the trading situation with China.”

Gray says that large retailers will probably be able to deal with the situation although face making financial losses while small firms could be forced out of business as a result.

On the supply chain front, Gray confirms that just-in-time (JIT) deliveries meant that many companies would be waiting for further stocks for their autumn ranges.

The BRS wants European Trade Commissioner Peter Mandelson to intervene as a matter of urgency in a bid to resolve the situation.

Frenetic lobbying from clothing manufacturers in France, Spain and Italy led to the EU setting new quotas on a wide range of garments. On July 20 the quota for jumpers and pullovers was reached but millions more were stuck en route from China to Europe. These are now effectively blocked from entering the EU market along with hundreds of thousands of trousers, blouses, bras and sweaters as well as millions of T-shirts stranded.