An unusual rainy start didn’t stop the lively discussions and informative sessions on trade issues, compliance challenges, and customs solutions at FDRA’s Footwear Trade and Distribution Conference (FTDC) last week in Huntington Beach. Nearly 200 of the industry’s top footwear executives, traffic and distribution specialists, customs experts, and service providers joined the longest running U.S. footwear conference on October 16-19. Companies on stage and in the audience included Caleres, Deer Stags, Amer Sports, KEEN, NIKE, Kohl’s, and others.
This was Amber Road’s eighth year participating in this premier event for U.S. footwear companies. The underlying theme of the presentations at this year’s event helped importers and manufacturers better understand how to navigate logistics, trade compliance, product testing, and supply chain management in the uneven import and export environment experienced in 2016. Here are some key takeaways:
Don’t go it alone
Tread the industry and supply chain turmoil with the right partners and alliances. When you don’t know something, seek professional help; this could mean reaching out to your service providers and trade associations who are armed with the expertise to help you achieve a successful outcome. Likewise, you should explore ways to plan for alliance-related supply chain disruptions with the right partnership that fits your business needs before entering into a relationship. The Hanjin situation, shipping industry concerns, and other transportation issues have had an extraordinary impact on logistics reliability, cost, capacity and speed.
Be ready for the next best thing
Christmas is still 60 days away, but reports show the majority of U.S. consumers have already finished their holiday shopping and most have done it online. Ecommerce sales have soared above analyst projections and retailers need to be keyed-into international sales too. Nearly 40% of consumers have purchased goods online from another country, with the U.S., U.K., and Germany topping the list of most desirable cross-border e-destinations.* With more than half of the world’s buying power residing outside of the U.S., and a growing middle class in highly populated countries like China, India and Brazil, companies should consider partnering with solution providers experienced in global trade regulations and practices to help.
Give your supply chain a stress test
Manufacturers, distributors, and retailers should regularly assess the health of their supply chain and trade activities to ensure products are cost-effectively sourced, produced, and delivered on time to meet customer expectations. Critical business operations may appear to be operating just fine but supply chain practitioners should examine any changes that occur within their global operations from a holistic viewpoint.
There are many examples where small changes in one area of the supply chain can have significant and unintended consequences in another. A healthy awareness and understanding of current supply chain technology is imperative to assuring the ongoing fitness of your global supply chain — you can take the test here to see if you are prepared. A holistic, end-to-end solution combined with sourcing, logistics and content will keep companies ahead of the risk through proactive collaboration.
Turn to insider knowledge
Risk in the supply chain is daunting and costly, with predictable versus unpredictable events hitting the industry weekly like the Hanjin bankruptcy, theft and security problems, weather, and labor strikes. According to BSI, the weakest risk link occurs during the movement of cargo, when your goods are most exposed to hijacking, cargo theft, and supply chain terrorism.
To better manage risk, a panel of industry experts suggested the following:
- Be on top of your suppliers by connecting with the right partners and working closely with them to ensure open communication, compliance, and awareness.
- Be flexible and ready to make changes easily and quickly if a business continuity or risk issue pops up.
- Rely on your local offices to know the regulations in-country, and be willing to make changes if necessary.
- Work with a team to keep an eye on the factory floors and ensure rock-solid trademark registrations to fight counterfeiting.
Crack the classification code
Footwear is a difficult product to classify and the right HS code could save an importer hundreds of thousands of dollars. U.S. Customer and Border Protection (CBP) experts were joined by Customs attorneys and experts to talk about the agency’s current enforcement activities, the renewed efforts to prevent forced labor imports, and a deeper dive into the CBP’s 2016 rulings specific to the footwear industry.
Overall, the trade industry needs to examine classification techniques and align them to one standard that works across products. Advanced product innovation and materials is leading to greater issues – Velcro closures, sneakers with flashing lights or embedded electronics are raising red flags! A lively panel spoke about cracking these classification codes and how to seek a tariff simplification plan of action review. CBP’s National Import Specialist for Footwear, Stacy Kalkines, was on-hand for specific clarifications and discussed the nuances of the codes.
Though the apparel and footwear industry faces many challenges in the coming years, last week’s conference is a reminder that knowledge-sharing, more visibility, and open discussion among all players in the supply chain are important to overcoming these challenges for success. We’re glad to support such a long-standing, important forum for brand leaders to share the ways they plan to innovate!
Click here to view the presentations from the event.
Interested in learning more about a solution that can reduce risk and complexity in your supply chain? Download our Supply Chain Collaboration for Footwear Manufacturers brochure.
*2014 Pitney Bowes Global Online Shopping Study