Supply chain disruptions due to the Covid-19 pandemic are expected to cost the US textile and footwear industries between $9 billion and $17 billion in 2022 alone. It is said in “The Recent Trends in US Services Trade: 2023 Annual Report” from the International Trade Commission (ITC).
The report explored the impact of the Covid-19 pandemic on global supply chains.
According to the analysis, inventory distortion losses due to pandemic-related supply disruptions would cost global traders $580 billion by 2020. Costs to manufacturers and operators of global retail supply chains were estimated to reach US$ 1.2 trillion in 2020.
Figure: Supply chain disruptions due to the Covid-19 pandemic are expected to cost the US textile and footwear industries between $9 billion and $17 billion in 2022 alone.
The report also pointed out that the changes in demand, supply shortages and transport disruptions due to the Covid-19 outbreak were “the most dramatic stress test of the past 75 years” for global supply networks and exposed their fragility and their limitations. The report read that the pandemic had a negative impact on the revenues of 94 percent of US retail companies, according to a survey of international retail executives.
US companies that depend on global suppliers for inputs and finished goods were the hardest hit since US apparel retailers source nearly 90% of their products from overseas, the report read.
According to the report, analysis of supply chains since the start of the Covid-19 pandemic suggests that it is important for retailers to diversify supply. Retail analysts are pointing out the benefits of multi-sourcing and identifying alternative supply to wider supply bases, transportation and logistics providers to increase resilience.
“A 2021 survey of supply chain professionals indicated that 88% of US SME retailers are shifting or plan to shift at least a portion of their supply to the United States.”
The report also highlighted how sourcing is “relatively easy to move” for certain sectors, such as textiles, with “numerous” options to China, including other Asian countries such as India and Pakistan, and Latin American countries such as Mexico.
Pandemic-related barriers also revealed a lack of transparency among suppliers and traders, according to the report.
The report emphasized on the increased use of digital supply chain management technologies—including block chain, fifth generation (5G) and artificial intelligence (AI) which help retailers with end-to-end information flow and increasing collaboration and information sharing across the supply chain.
