American President Lines is boosting its capacity on China routes.

NEW YORK — As the apparel industry ramps up for the end of quotas in 2005, U.S. imports of Chinese-made products are growing at explosive rates that are expected to continue to accelerate.<br><br>Low-cost Chinese manufacturers are proving...

NEW YORK — As the apparel industry ramps up for the end of quotas in 2005, U.S. imports of Chinese-made products are growing at explosive rates that are expected to continue to accelerate.

This story first appeared in the November 18, 2003 issue of WWD. Subscribe Today.

Low-cost Chinese manufacturers are proving themselves to be formidable competitors in most categories of apparel. But it’s 7,233 miles from Hong Kong — home of one of the major deep-water ports from which Chinese goods depart — to Los Angeles — where many of the imported garments destined for U.S. retailers land.

China also has to import most of the raw materials that it needs to make garments, from petroleum for synthetic fibers to wool and cotton. China’s cotton imports since January 2002 have risen from almost zero to a projection of more than 4 million bales this year, according to a study recently released by Cotton Incorporated.

Likewise, for the first nine months of this year, Chinese exports of textiles and apparel to the U.S. rose 71.5 percent on a volume basis, to 5.97 billion square meters equivalent of products valued at $8.73 billion, according to the most current data available from the Commerce Department.

That leaves the ocean carriers that ply the trans-Pacific routes working to boost their capacity in the China trade. An organization composed of those carriers recently said its members intend to try to raise their rates again next year, a move the Transpacific Stabilization Agreement said was justified by rising demand.

The Oakland, Calif.-based carrier, American President Lines, over the next 12 months plans to significantly boost its capacity on China routes.

“For the second half of this year, we are boosting hull capacity by 10 percent on our main lines, both the Asia-Europe and trans-Pacific trades,” said an APL spokesman. “We’re going to increase it 12 percent more next year.”

Currently, the carrier has the capacity to move 37,500 cargo containers in a given week. Each 20-foot container, known as a TEU in the trade, is large enough to hold 1,865 boxes of sneakers.

APL currently includes China stops in 10 of its 12 routes from Asia to North America. The spokesman said the carrier also is working to boost the number of ports of call in China it hits.

Brian Moore, director of apparel sales at Madison, N.J.-based Maersk-Sealand Inc., said boosting service from inland China is another priority for carriers. In recent decades, Chinese manufacturers had concentrated in the Pearl River Delta near Hong Kong and Yangtze River Delta near Shanghai.

“The push is on by the [Chinese] government to move people away from the ports to try to get industries inland,” Moore said.

That push is seen as an effort by Beijing to generate more employment in rural areas of inland farming, particularly as the country continues to privatize the state-owned operations that once employed millions.

Because of the lack of ready employment in inland cities and rural areas in China’s northern and western regions, importers report that wages in those areas also can be lower —?a key concern of many in this cost-cutting environment.

“We have offices in places that I’ve never been to and that most people have never heard of,” said Moore, adding the company now has 37 offices in China. It opened its first China office in 1994.

Moore said the key hurdle that manufacturers face in trying to move their factories inland is the lack of infrastructure, such as quality highways connecting inland points to ports.

“There’s been improvement, dramatic improvement, in the last five or six years, but it still has a way to go,” Moore said. “That’s what will send the people away from the water, away from the ports and major cities, once that’s improved.”

load comments
blog comments powered by Disqus