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    Orders From Thousands Of Garment Factories In Bangladesh Have Been Cancelled. How Do Textile Foreign Trade Enterprises Avoid Risks?

    2020/3/27 10:52:00 0

    Bangladesh Clothing OrdersTextile Foreign Trade Enterprises

    With the continuous fermentation of foreign epidemic situation, the number of confirmed cases has been rising. Many countries have taken emergency measures such as sealing up the city, sealing up the country and stopping work to cope with the spread of the epidemic. This has also led to a temporary shutdown of the global economy. Some experts and scholars believe that the epidemic poses a risk of economic recession in the world.

    Orders for thousands of garment factories have been cancelled.
    Bangladesh's economy has been battered by the outbreak.


    Rubana Huq, chairman of Bangladesh garment manufacturers and Exporters Association, recently released LinkedIn tweets, as follows:



    She wrote: so far, a loss of US $1 billion 500 million has been generated, and brands have cancelled or postponed orders. We do not know what to do tomorrow. The brand that became partner last month has become a stranger.
    She said that as many as 1089 orders from Bangladesh clothing factories were canceled, which would severely hit the country's economy. Huq has shouted to share the crisis and said: "in case of emergency, we can accept deferred payment."
    Bangladesh is the largest garment exporter after China. The crisis will be more widespread for Chinese exporters. The new crown epidemic has just subsided in China, and a surge of retreating tide will hit foreign traders.
    At present, the international market is largely cancelling or postponing orders, and the world economy or the problem of lockout.

    The closure of multinational routes led to serious disruption of the shipment of goods.

    Some domestic or foreign trade enterprises will have a holiday.



    "After a period of efforts, factory production has been fully restored. But with the rapid spread of the overseas epidemic, the situation is turning rapidly. Over the past few days, many notices have been received from American and European customers to postpone or cancel orders. " Sun Jianbo, general manager of Zibo Hongxu Textile Co., Ltd., told reporters. Hongxu textile is an infant clothing manufacturer. It has maintained rapid development in recent two years, and its products have entered the high-end market in the US and Europe.

    Zhejiang, a European market leader and chief export operator of men's jackets, said that Europe is becoming a new center of the epidemic. The closure of multinational routes led to poor logistics and serious disruption of exports. At the same time, the epidemic situation in European countries is continuing to spread, residents' lives are affected, local clothing consumption market demand is sluggish, orders decline significantly.

    "This Monday. Now many European and American customers do not work, they are working at home. When asked whether the order was suspended or cancelled, He Hui, a pseudonym, was engaged in the textile and garment trade.

    It is understood that most of the European and American customers He Hui's clothing trade company is suspending or cancelling orders.

    "Because of the epidemic situation, many European clothing stores are closed, at least two or three months will be the case, and stores even open, business is not good, so all orders suspended, some new orders may be directly canceled. 80% of the European and American customers have this situation. He Hui said.

    Now, the first thing that he wakes up every morning is from watching the domestic epidemic data and becoming a focus on foreign epidemic data. Under the background of economic globalization, practitioners of foreign trade, including ho Hui, deeply feel that the global economy is a community and no single economy can be single.

    "Our company may start off next month. As far as cash flow is concerned, we can still be quite ready to reorganize the organizational structure and do some internal training to get through the epidemic. He Hui reluctantly indicated that if there were no new orders, besides the impact of trading companies and the upstream garment production factories, they might face a situation of no work to do.

    The same is expected in the early control of foreign epidemic, as well as in Guangzhou shoe processing foreign trade FA fa (alias), it is understood that ahair's shoes are mainly exported to Japan, as compared with Ho Hui, affected by the epidemic less. A hair told reporters that although the Japanese epidemic is not serious, but customers also began to wait and see state, the next order has not been determined.

    Ho Hui told reporters that at present, the global customers are in a state of panic. They have no definite idea about the duration, impact and response measures of the epidemic. They are also in a wait-and-see state, so most of them have not explicitly pointed out that they should cancel their previous orders, but rather postpone delivery.

    Under the double attack of Sino US trade friction and the new crown pneumonia epidemic, a carpet exporting enterprise from Shandong felt a lot of pressure. The head of the company said that the United States is suffering from more serious epidemics. The exhibition is postponed and the tourism industry is stagnant. The demand for carpet products for local hotels and conference centers is greatly reduced. The newly built hotels may be postponed or shut down, and the original meeting rooms will not be replaced with carpets. The field share is compressed again.

    In March 19th, the Ministry of Commerce held an online press conference. The new crown pneumonia epidemic is spreading around the world. More than 160 countries and regions have confirmed cases. Some countries have been hit by production, consumption and other fields, trade activities have been reduced, and the global economic downward pressure has increased. Question.

    How to avoid risks in textile foreign trade enterprises

    The docking list of textile enterprises is bound to be more cautious. Even if there is an order, it is necessary to consider whether or not the follow-up will be cancelled.
    Combined with the characteristics of most foreign trade, it is recommended that:
    No foreign trade orders without deposit can be easily answered, or try to take reliable insurance, that is, to support customers and transfer risks.
    If customers have been selling on credit, they can tell customers that this new crown pneumonia causes tight funding for raw material manufacturers, and only accepts cash orders.
    We must confirm the order that we have already produced.
    Avoid using the expression "not even this list". If customers fail to reply, you will be able to ride a tiger. It is suggested that "it is understood that the new crown pneumonia has a serious impact on your country. If there is any problem with your order, transportation or sales, you will not be able to confirm the cancellation within three days." In this way, the customer is forced to reconfirm the contract in case of the outbreak, so as to avoid the "force majeure" claim for breach of contract in future.
    If we have already delivered the goods and have arrived in the accounts period, we must pay close attention to the collection of money, and the obligation to pay money will not usually fail because of the epidemic situation.
    If the customer takes this excuse, it is likely that the other side already has financial difficulties. Given the time limit, the other party can not pay the consideration of cargo control, return and so on.
    Export enterprises are advised to comb the risk of stock affected by the epidemic.
    We should pay close attention to the transportation of goods, and consult with freight forwarders and shipping companies to deal with the customs ban that may be issued. We should strengthen the collection of foreign exchange receipts payable by buyers.
    (I) advise exporters to communicate with buyers in time for goods not yet shipped.
    We should arrange the delivery time reasonably and pay close attention to the risk of rejection and default that the buyer may have in case of epidemic prevention and control.
    It is suggested that exporters should make prior arrangements when negotiating new contracts.
    Through force majeure and property reservation clauses, the risk of new crown pneumonia outbreak may be agreed in advance, so as to avoid or reduce the uncertainty caused by the epidemic.
    New contract is appropriately relaxed.
    For buyers whose business is really affected by the epidemic, they may consider relaxing the payment term in the new contract, giving the buyer a certain buffer period.
    During the epidemic, it is recommended to keep records of the communication with buyers.
    In particular, it involves the confirmation of debt and debt, the repayment of debt, the collection of debts, the WeChat chatting records, etc., so as to provide a reference basis for the quick settlement of claims in the later stage.
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