Delays Expected for Apparel and Textiles From Southeast Asia

U.S. apparel and textile manufacturers said they expect many goods made in Southeast Asia will arrive days to weeks late after a tsunami generated by an undersea earthquake wreaked havoc in the region. Three countries affected by the disaster—Indonesia, India and Sri Lanka—are major apparel producers for U.S. companies.

While most apparel and textile factories in the region were not severely damaged, railway lines, roads and ports were flooded when tsunami waves on Dec. 26 swallowed up coastlines and killed more than 117,000 people in a dozen countries.

“The initial reports from colleagues in Asia show that our sourcing facilities and staff are safe in the region,” said Jeff Beckman, a spokesman for Levi Strauss & Co. in San Francisco, which sources in 50 to 60 countries. “We do business with manufacturing contractors in three of the impacted countries: Indonesia, India and Sri Lanka. We are hearing from these countries that we should expect shipping delays from Sri Lanka and India. So far, shipments and products out of Indonesia won’t be impacted.”

E-mails sent to Levi Strauss indicated that shipping delays would range from three to seven days, depending on the country and the product. Orders of Dockers pants are among the items expected to arrive late, Beckman said.

Assessing the damage

While Indonesia sustained a heavy toll of more than 80,000 dead, most of the tsunami damage was confined to Sumatra, an island that does not have a large apparel industry presence. Indonesia is the ninth-largest apparel supplier to the United States, shipping $2.3 billion in goods to the country in the year ended Oct. 31, according to International Development Systems, a Washington, D.C.–based company that tracks apparel and textile quotas.

India, the 12th-largest apparel supplier to the United States, sustained major damages along its eastern edge.

While most Indian factories are not located near the coastline, the Port of Chennai (formerly called the Port of Madras) sustained some damage. Chennai is a major port on the east coast and the second principal port in India for handling container cargo. It receives many feeder lines from Sri Lanka and other Asian countries. About five empty containers were swept away, and tons of sediment were washed into the port, making it difficult for heavy vessels to dock.

“The depth of the [ocean] floor has been changed and will have to be dredged before deep vessels can go in there,” said Ernie Stein, vice president of operations at Norman Krieger Inc., an international freight forwarder and customs broker in Los Angeles. Stein has been receiving periodic e-mail updates from his agents in Asia.

“It is going to be a difficult situation out of that area right now,” he said. “We’ll have to play it out day by day.”

Raghu Kamar of Apparel Search India, a buying agent in Chennai, said in an e-mail that most of the apparel factories in the region have not been affected. The port situation, however, was difficult. Ten to 12 cargo vessels were damaged there.

“Details of damages at the ports of Chennai and Tuticorin will be available only after inspections by the port authorities,” he wrote. “Regular operations have, however, resumed. A vessel has berthed, and work is in progress.”

On Dec. 27, T.R. Baalu—India’s minister for shipping, road transportation and highways— toured the Port of Chennai and noted that the damage to equipment and ships was severe. Baalu ordered port officials to work around the clock to return to normal operations, according to a report in The Hindu, an Indian newspaper.

Because of the port problem and other infrastructure disruptions, Rick Darling, president of Li & Fung USA in New York, one of the world’s largest sourcing companies, said he is expecting there will be some delays in goods coming from Southeast Asia.

“In talking to our offices overseas, they are not aware of any factories that have been damaged or that have any problems with production,” he said. “The only thing we are seeing is that the southern Indian port of Chennai was closed. There is also some disruption coming out of Colombo, Sri Lanka, because Chennai is a transshipment area for Colombo.”

Infrastructure issues were the main problems for the apparel industry in Sri Lanka. With 859 apparel factories employing 250,000 people, Colombo is the manufacturing capital of the small island country, located at the southern tip of India. Most of the country’s apparel factories are located near Colombo, where major U.S. companies such as Levi Strauss and Limited Brands Inc. produce their goods.

“There is no major damage to the apparel factories. But the highway between Colombo and Matara [in the south] has been closed and is pretty badly damaged,” said Anura Bandaranaike, Sri Lanka’s minister of industry, tourism and investment promotion. He talked about the disaster with reporters and Sri Lankans at the Sri Lanka Consulate in Los Angeles.

The minister said he did not think importing fabric and textiles from China and India, Sri Lanka’s major suppliers, would be a problem. “China and India will make every effort to see that we get our fabric and there is no reduction in deliveries,” he noted.

While many U.S. companies were relieved to hear that most apparel factories in the region were undamaged, many said they were waiting to see what kind of health problems might erupt.

“The following weeks will see if there are health problems or communicable diseases,” said Darling of Li & Fung. “In that case, the situation could change dramatically.”