Toll knows shoes - FDRAfdra.org/.../06/...Market-Intelligence-updates-8.pdf · Toll Global Forwarding Toll knows shoes 7 Footwear market trend 2012 to 2014 Source: Seabury 500 600

Toll knows shoes

Teresa Lo, Global Head of Supply Chain Solution Design and Implementation Eric Pilling, Global Head of Marketing and Sales June 2015

2 Toll Global Forwarding Toll knows shoes

Agenda

•  FDRA and Toll partnership in 2014

•  Market

•  Challenges

•  Toll approach


FDRA and Toll partnership

•  Toll and FDRA launched global partnership in July 2014 •  Toll is participating in FDRA 25 events worldwide •  FDRA is one of the largest Trade Organizations representing 80% of

brands and distributors of footwear •  Toll’s value proposition: true end-to-end solution covering a broad scope

of transportation and supply chain products – Air freight, Sea freight, Warehousing, Value Added Services

•  Toll is already working with the largest factory groups in Asia

Common objective – to support the footwear industry in addressing specific industry challenges


Toll knows shoes

Genuinely interested in supporting the footwear industry, our dedicated employees have had in-depth discussions with customers to identify challenges within the footwear market

• How to maximise full price sell throughs in a constantly changing retail environment • Ensuring the right products arrive at the right place, the right time and at the right cost per pair • Managing distribution channels


Footwear market size 2012 to 2014

• Footwear represents nearly a quarter of global fashion trade • Rubber/plastic shoes are the largest product categories within global trade of footwear, with modest growth in past few years • Specialized shoes have seen the strongest growth • Demand for sport and reinforced shoes is especially growing in the US and Europe


Footwear market size 2012 to 2014

Source: Seabury

Fashion global ocean trade, 2012-2014 Thousand tonnes

Other Fashion

2014

Footwear

28,053

24.1%

2013

26,823

24.2%

2012

25,873

25.0%

Other

Textiles

Steel toe-cap

97

599 Sport & Training

184

1,223

3,163 Rubber or plastic

1,481 Leather

Types of footwear, 2014 Thousand tonnes

+1%

-1%

+5%

+8%

+7%

-30%

Yearly growth (2010-2014)

Mainly driven by US imports

Growth driven by US & EU

imports


Footwear market trend 2012 to 2014

Source: Seabury

500

600

200

100

700

0

400

300

J M J N S J F A D O N S J M F O O M J A F J A D M S A M D J M N J A F J A J

Global Trade

2012

Thousand tonnes (air and ocean)

2013 2014 ‘15

•  The footwear industry is a steady market with strong seasonality peaks in January and July; majority of all footwear trade is shipped by sea

•  2.6% of total weight is transported by air, versus 9.4% of total value (2014)

•  89% of all footwear trade originates from Asia-Pacific

•  Seasonality peaks in January and July might be related to new collections


Footwear market – ocean freight focus

Source: Seabury

•  Asia-Pacific is the largest export region of footwear, with North America, Europe and Intra-Asia being the main destinations

Footwear ocean trade growth (2013-2014)

Global footwear trade growth 2013-2014: 4.0%

0

-3

6

29

-2

2

Note: Growth in terms of weight 2013-2014; Size of arrow represent amount of ocean trade in 2014; Combined data for Middle East & South Asia

-12

%

22

11 5

%

1

1

1

2 1

1

89

6

YoY Growth, % (2013-2014)

Export market share, %


Footwear top export markets

•  China is the leading exporting country of footwear with shippers scattered around the South East coastal area

•  Strongest growth rates are seen in South East Asia and Turkey Exporting countries of footwear, 2014 Thousand tonnes (air and ocean)

China Shipper Database, 2014 Location and size2 of footwear shippers in China

4,000

3,000

0

1,000

2,000

5,000

47

Thailand Cambodia Italy

44

Brazil

53

Turkey

64

India

137

UAE1

195

Indonesia

234

Vietnam

566

China

5,185

51

-0.7% +9.7% +9.7% +2.9% +9.9% +21.1% -6.0% -0.5% +1.3% +19.1% Yearly growth (2010-2014):

 Size of bubble indicates

metric tonnes of sea weight

Source: Seabury


Footwear market forecast

•  China to USA will remain the largest footwear trade lane, although on continuous decline

•  Trade from China to emerging markets is driver of growth •  Exports to emerging regions, such as West Africa and Malaysia, will

have highest growth rates

Yearly growth (2010-2014):

Source: Seabury


Footwear market forecast

Source: Seabury

Other selected3

China Iran 27% 28%

China Angola 1% 16%

Vietnam United Kingdom -12% 16%

Vietnam Mexico 0% 19%

Growth accelerates

Origin Destination Footwear ocean trade size, 2014-2019 Thousand tonnes

Historic1

2010-2014 Forecast1

2014-2019 Difference

% China USA -3% -5%

China West Africa2 13% 16%

Vietnam USA 18% 10%

China Kazakhstan 10% 10%

China Hong Kong -10% -2%

China United Kingdom 9% 3%

China Japan -2% -3%

China Malaysia 1% 11%

China Russia -5% 3%

China Netherlands 8% 3%

1) GAGR for market size (in weight); 2) All countries in West African region, but excluding Nigeria; 3) Selection based on market size as well as forecasted annual growth rates;

211

1,004

364

228

366

205

201

186

168

146

24

32

73

107

2014 Increment 2014-19 Growth slows down Negative growth


Market updates

•  Market intelligence updates •  Weekly news •  Monthly dashboards

•  Drop business card with our team to sign up for updates


Footwear specific industry challenges

•  Compliance •  Cost of expanding audit •  Code of conduct FDRA •  Zero tolerance issues

•  Increasing cost base & duties •  2.3 billion pairs imported to

USA •  US$2.5 billion paid in USA

key origin market, CN •  Cost per pair has increased

from US$7.00 to US$10.50

•  Visibility •  Data collection •  Timely and accurate

reporting •  Migration of CN – VN

•  Surge in ecommerce demand •  Reliable B2C delivery model •  Balancing cost of service and

end customer expectations


3D Printing – Impact on the transportation

PROTOTYPE MANUFACTURE ASSEMBLY WAREHOUSE DISTRIBUTION RETAIL IDEA/ DESIGN

END USER

3D PRINTING

Transport Transport Transport Transport

If 3D printing becomes a common feature of large-scale manufacturing operations, the technology will have a huge impact on all phases of the supply chain – by reducing or eliminating the needs to ship from offshore facilities to market.


Implications to the Supply Chain in future

•  Production moves closer to end user, save the transportation costs from the point of manufacturing to point of consumptions

•  Stockless supply chains – “Print on demand”,

reduce inventory holding and warehouse storage costs

•  Reduce the lead time

•  Future trend: 3D printing hub & high demand on post office / local courier services ??


Toll approach

•  Exclusive Footwear vertical – collaborative approach •  Vertical integration •  Continuous improvement using best practice •  Reduce footprint •  Increase speed to market

•  Transparency •  End-to-end analysis •  E-booking, Vendor management, PO management •  Solutions-based IT approach

•  Continuous improvement culture, automation / integration •  ASN visibility •  Cross Dock/ Transload Programs •  Bandwidth – ability to respond to peaks and troughs


Traditional engagement model

Risks associated with the Traditional Model: • fails to drive all potential improvements. • acts on the margin element of supplier pricing. • fails to align user and supplier costs • applies a ‘one size fits all’ approach to market engagement • manages contracts for compliance rather than for continuous improvement

Engagement

Pre- qualification

Service Tender /Quote

Legal

Solution

Negotiate

Work through Assumptions

Argue

Implement

Continuous Improvement


Strategic intent – paradigm shift

•  Break away from the traditional model

•  Reach the right people •  Economic Buyers •  Technical Users •  Coaches

•  Engage through “Value Discovery” engagements

•  Prepare solutions that are of value

Reach the right people

Senior partner

relationships

Preparation

Identify power and influence


PO Management

•  Purchase Order management is a key factor in managing effective supply chain and bolstering foreign sourcing

•  Toll’s PO Management service provide customer with higher visibility and execute better control over their supply chain: •  Monitor order status with suppliers according to agreed ex-factory date •  Provide proactive notice to customers for any possible delay to their orders •  Provide event visibility through the track & trace tool, iCON, and manage by

exception •  Produce KPI report, e.g. Vendor compliance report, Open order report, etc.,

•  Moving upstream to start monitor from order to improve time-to-market, allow all parties in the supply chain to manage the resources better and plan for future needs to achieve cost reduction


Capability of Toll on Footwear

•  Toll has solid experience to handle Footwear •  Storage •  Pick and pack per store •  Local Delivery to store •  Value Added Services (VAS)

•  Apply tag •  Insert warranty/ promotion stuff •  Re-labeling •  Generate UPC labels, Size Labels…. •  Reweigh for Export

Benefit for Value Added Services •  Destination Labor cost savings •  Destination warehouse cost savings •  Improved merchandising flexibility

•  Help to improve speed to market


The most significant improvements in customer lead times, and/or logistics cost reduction are generated from prudent supply chain re-engineering. Lead time improvements measured in weeks, cost reductions between 15% to 25% of the total end to end logistics cost may be achievable. Moving logistics activity traditionally executed at destination, upstream to origin, may produce such results.

Direct to store / DC Bypass


Toll in action

Tilt tray fulfilment RF put-pull Print & apply

UCC Scanning


Proving it…

Toll solutions Footwear A: An American global name has been entrusting Toll with managing their integrated logistics functions for more than 12 years: • 17,000 square metre, fully automated warehouse • Environmentally friendly features from energy-efficient lighting systems to recycled pallets

Footwear B: Toll designed and implemented a customised solution for an internationally recognised European brand some years ago and has been managing it since: • 14,000 square metre, fully automated warehouse • Safer operations • Higher inventory accuracy • Enhanced ability to manage peaks and troughs of demand • Better positioned to manage future business growth

Ecommerce: Toll designed an economy express service, combining strengths in freight forwarding and courier services within the Group, for leading global online marketplace. • Full track and trace capabilities • Hybrid solution offering lower cost than courier service, and shorter lead time than freight forwarding

Safer operations • Increased productivity • Reduced labour requirements • Reduction in footprint • Reduction in lease costs • High inventory accuracy & availability • Improved service levels &speed to market • Ability to efficiently manage multifaceted distribution channels • Ability to manage peaks and troughs in demand effectively • Ability to manage future volume growth

• Overall reduction in supply chain costs

Toll knows shoes

The perfect fit for your supply chain requirements

Documents

Toll knows shoes - FDRAfdra.org/.../06/...Market-Intelligence-updates-8.pdf · Toll Global Forwarding Toll knows shoes 7 Footwear market trend 2012 to 2014 Source: Seabury 500 600