The recent expansion of the 100-year-old Panama Canal is allowing for faster international shipping of apparel

Designers who complete a successful transition to providing see-now-buy-now fashion for their customers just might have the enhanced Panama Canal to thank for it.

This story first appeared in the October 12, 2016 issue of WWD. Subscribe Today.

The 100-year-old Canal’s expansion, which doubles its capacity and was completed at the end of June at a total cost of $5.25 billion, is the single biggest change to the route used for goods that arrive at U.S. ports and make their way in large batches to mass, department store and specialty retailers — and that account for the vast majority of apparel sold in the U.S.

For apparel and textile importers, the enhancements at the Panama Canal are expected to help ease congestion at West Coast ports that handle the bulk of Asia-Pacific cargo, allowing more direct travel by larger vessels directly to the East Coast of the United States, where many ports are also completing or have recently finished major dredging projects to allow for the new, larger mega-vessels that are more energy efficient and environmentally safer.

Vessels are now able to travel through the Canal with up to 13,000 to 14,000 TEUs, compared to 5,000 TEUs previously. A TEU represents a 20-foot equivalent shipping container.

“This is a trend which we expect to continue as the Panama Canal continues to invest in and solidify its position as the shipping and logistics hub of the Americas,” said Panama Canal Administrator and chief executive officer Jorge L. Quijano.

The average transit time by water from Asian to U.S. ports ranges from three to six weeks, depending on the ultimate destination and time of year. With the ability to bypass the western U.S. ports and use the upgraded Panama Canal for direct Eastern Seaboard access, importers can save about a week to 10 days of overall transit time, experts have noted.

And even though the back end of the apparel supply chain — from factory to distribution center — is too massive to customize delivery methods for the amount of apparel that will be shipped as a result of the instant fashion movement, these changes clearly will benefit the fashion industry.

For example, the Port Authority of New York and New Jersey and Global Container Terminals USA in Bayonne, N.J., welcomed the MOL Benefactor — the largest container ship ever to call on the Port of New York and New Jersey, on July 1.

The port, the nation’s third-busiest facility, exceeded its previous record for annual cargo volumes in 2015 by more than 10 percent. During the year, the port handled 6.37 million TEUs, an increase of 10.4 percent over 2014 when the previous annual record was established. The record volumes allowed the port to maintain its position as the busiest on the East Coast with nearly 30 percent of total market share.

ExpressRail, the Port Authority’s ship-to-rail system serving New York and New Jersey marine terminals, also set a new record, handling 522,244 containers, a 12.2 percent increase over 2014. The agency said its investment of more than $600 million in ExpressRail and its plans to build a new ExpressRail facility in Greenville Yard in Jersey City, N.J., have been critical to addressing the need for on-dock rail to improve port efficiency and competitiveness.

The twin ports of Los Angeles-Long Beach have also invested in improving their intermodal facilities to reduce the time it takes to unload goods and get them en route to their destinations.

Even the U.S. government is taking steps to ease the way for imports into the country.

On Sept. 15, U.S. Customs and Border Protection added Long Beach-Los Angeles; Newark, N.J.; Savannah, Ga.; Miami and Seattle-Tacoma, Wash., to the list of ports that will allow eligible sea carriers to apply for advance unlading facilitation benefits. That list already included the ports of New Orleans, Oakland, Baltimore and Port Everglades, Fla.

The Advanced Qualified Unlading Approval program allows C-TPAT qualified ocean carriers that are also compliant with importer security filing and certain agriculture requirements to apply for AQUA a minimum of 24 hours prior to arrival. CBP anticipates that AQUA will reverberate throughout the entire supply chain due to quicker unlading times.

On land, the U.S. Department of Transportation last month announced 18 infrastructure projects across the country that will receive federal grants as part of the new Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies program.

The grants, totaling nearly $800 million, will be combined with other funding from federal, state, local and private sources to support $3.6 billion in infrastructure investment in 15 states and the District of Columbia.

Ground transportation firms like UPS and Fedex are improving delivery service to fast-fashion customers.

“The FAST Act gave us a set of tools to begin addressing America’s infrastructure deficit, and we have been moving full speed ahead to get critical road, rail and port projects off the ground across the country,” said Transportation Secretary Anthony Foxx. “From eliminating traffic bottlenecks and enhancing port capacity to overhauling a major freight corridor, the 18 inaugural FASTLANE grants will enable people and goods to move more efficiently.”

Apparel firms are also looking to their own shipping and transportation infrastructures for improvements. For example, PVH Corp. said in a report that its North America logistics team, which operates a private fleet of trucks to transport its products to distribution centers and stores, undertook several initiatives in 2015 to reduce its carbon footprint.

Its fleet, which is made up of four trucks and 24 trailers, has increased fuel efficiency by participating in SmartWay, a U.S. Environmental Protection Agency initiative that helps companies streamline their transport and logistics operations. Using data on fuel consumption and carbon emissions from SmartWay as a guide, the fleet has so far fitted anti-idling devices to tractors, introduced a maximum speed limit of 72 mph and specified fuel efficient engines for new tractors. It also made aerodynamic modifications to trailers that saved over 20,170 gallons of fuel and resulted in cost savings of about $55,000 last year.

But even though all of these changes will decrease the amount of time it takes for materials to arrive in the U.S. for distribution, for fashion consumers, the real test is how quickly an order actually arrives at their door. Carriers such as UPS and FedEx are also taking steps to reduce the time for just-shown fashion apparel and accessories to be delivered to someone’s front porch — which means that Louisville, Ky., where the majority of international shipments are sent, is emerging as one of the biggest transportation hubs for the fashion industry.

Bala Ganesh, senior director for corporate strategy at UPS, said one of the drivers of the see-now-buy-now phenomenon is consumers’ unwillingness to wait. Ganesh explained that consumers “lose interest” the more time stretches from the moment of a fashion show — either live and in person or streamed online — to when that must-have item finally reaches them.

So the “evolution of the supply chain — especially in regard to fast fashion — and overall shorter cycle time from design to production,” Ganesh emphasized, has enabled the acceleration of see-now-buy-now, with brands’ efforts to also grown their direct-to-consumer business as a contributing factor.

Ganesh and others note that real-time manufacturing and global e-commerce technologies have allowed for brands and companies to move products more quickly than was even possible five years ago. Ganesh said the fashion footwear market has been a pioneer in this area for the past few years, and that the process involves an order being placed and then personalized (or customized) with real-time manufacturing “within hours” before UPS ships it directly to the consumer, and all over the globe.

“The capabilities of the supply chain today has enable this,” Ganesh said, adding that products produced in Asia are flown all over the world, eventually making their way to UPS’ two primary hubs: Louisville in the U.S. and Cologne, Germany, for the European market. From there, items are directed to regional hubs for the ground transportation portion of the journey.

For its part, UPS offers solutions for suppliers and retailers that help foster a more frictionless process. UPS Internet Shipping is designed to automate the business fulfillment process via a single software interface. It also offers UPA Quantum View Manage software, which “provides manufacturers and retailers with shipment tracking, customs brokerage and inbound-outbound scheduling,” the company noted adding that there are solutions for consumers as well that are designed to improve the online shopping experience.

In the U.S., some companies and brands also use the U.S. Postal Service, which delivered 154 billion pieces of mail last year — including 4.5 billion packages. Priority Mail and Priority Mail Express has tracking capabilities, said spokesperson Sue Brennan.

At FedEx, each shipment has a tracking number, “and customers are encouraged to track their packages throughout their journeys,” said spokesperson Katie Wassmer. “With the FedEx mobile app, customers can choose to receive notifications throughout the journey of their package. Customers can even use the mobile FedEx Delivery Manager to request changes in the delivery of the package. If a customer won’t be home or would like a package delivered to a different address or even a FedEx Office location, they can share those instructions through the app.”

Wassmer added that this “physical movement of goods is really an essential value proposition of e-commerce. After all, goods purchased online must physically arrive in a shopper’s hands.” The FedEx network expands across over 220 countries and territories, globally and links “more than 99 percent of the world’s GDP,” the company noted.

“FedEx connects 92 percent of the world’s GDP in one to two days,” Wassmer said. “This physical network — and the more than 400,000 team members, 650 aircraft and 100,000 motorized vehicles that come with it — is really the essential backbone when talking about e-commerce.”

Wassmer added that the company has a close relationship with retailers and brands, which includes understanding “their anticipated volumes and promotions, in order to have plans in place to handle shipments throughout the year.”

Shipping and fulfillment costs have been rising, though, and carriers are using the money to meet the growing demand of the omnichannel approach as well as the demands of see-now-buy-now — which carriers and e-commerce firms expect only to gain more traction as designers across the market (from large houses and small) increase their consumer-facing efforts.

Rob Taylor is cofounder and chief executive officer of e-commerce firm Convey. He said that while “carriers are feeling the stress of rapid e-commerce sales growth…retailers need to become more effective at managing a larger network of carriers to save money, offer customers more options and deliver a better customer experience.”

Taylor said optimization is key. “This focus on optimization is especially important for sellers of large items and those items that can ship in various modes,” he explained. “Earlier this year, UPS and FedEx modified their additional handling accessorials, increasing the cost to ship any package with the longest side measuring greater than 48 inches — down from 60 inches.”

The Convey ceo added that the changes mean that more packages will have “increased shipping costs heading into the holiday season. If retailers are not prepared, these costs will either eat into their margins, or have a direct impact on conversion rates as these costs get passed on to customers.”

Retailers who offer broader delivery options, said Taylor, as well as being more “transparent about shipping costs will be able to continue to offer free shipping at margins that make sense, recoup the cost of shipping upgrades and deliver a better customer experience that drives conversion and loyalty.”