Sourcing challenges of the fashion industry ironed out with our warehouse in Ismailia, Egypt

31 October 2022

Egypt is a growing sourcing and procurement market for textiles. Egyptian cotton, garments like trousers, and carpets are sought after by some of the biggest fashion and lifestyle brands.

In addition to its high-quality textile and clothing products, what makes Egypt such an attractive sourcing destination is its strategic location; it’s close to both Europe and North America, driven by multiple international trade agreements (QIZ-EUROMED), and offers attractive factors of production (land, labour, capital).

More than 10% of world trade passes through the Suez Canal, making Egypt an important transshipment hub for supply chains around the world. As a result, demand for logistics and warehousing capabilities in the country has witnessed steady growth over the past few years. Since 2017, the Egyptian Government has also been promoting exports, with a special focus on investments in infrastructure, attracting Foreign Direct Investments (FDI), and the expansion of the Suez Canal.

Logistics: Not as smooth as Egyptian cotton

Fashion and lifestyle companies are always in a race against time. Their goods need to be in stores on time, every time. For that reason, they require the correct quantity of goods to be loaded at source, in good condition, with accurate labelling and documentation.

Errors result in delays and unforeseen supply chain costs. For instance, if a fast-selling product misses a vessel, businesses may have to fly the product to the destination rather than use an ocean solution.

Goods can get damaged in transit if the rules and regulations of loading are not strictly followed. Plus, if an incorrect number of cartons is loaded on the vessel or the customs documentation is inaccurate, the movement of goods gets interrupted at the destination.

In terms of pricing, consistency is very much key to ensuring sustainable success. When brands want to price an item, they want to price it for an entire season. As such, having a season-long cost picture for logistics and warehousing operations enables companies to price items correctly against their bottom line.

Adding value to fashion and lifestyle supply chains

For some years now, Sealand – A Maersk Company – has been simplifying and integrating logistics for customers in Egypt with Supply Chain Management (SCM) services. Growing exports, however, have highlighted a growing need for services such as vendor and purchase order (PO) management and consolidation to ensure smooth processes from manufacturing in Egypt to the final destination. To address the challenges customers are facing, Maersk invested in a state-of-the-art, 5,550 sqm warehouse facility in the region that Sealand, as the intra-European logistics specialist, offers to its customers.

One of the key pillars of our SCM solution, this carrier-neutral warehouse has expanded our existing warehousing capabilities for fashion and lifestyle customers in Egypt and has added value to their supply chains in many ways.

Proximity

Centrally located between the capital city of Cairo and the Port Said terminal, our warehouse is just 90 minutes away from both the manufacturing hub and the port of origin.

Expertise

Sealand – together with Maersk – cater to more than half of the top global lifestyle companies. Our proven supply chain solutions enable customers to experience real results and fuel continuous growth.

High-quality Vendor and PO Management

We take on the responsibility of minimising errors and delays by supervising and monitoring everything, from labelling and container utilisation, to the quantity of cargo loaded on the vessel.

Scale

Our fashion and lifestyle customers now have more space to utilise and seven loading docks to move cargo through.

Safety

Our warehouse is in Ismailia, a public Free Zone that qualifies as a high safety area. The facility takes all the required measures to maintain this security.

Cost benefits of reliability and consolidation

Fashion and lifestyle supply chains need to run like well-oiled machines. They cannot afford the cost of uncertainty that comes along with damages, discrepancies and delays. Our customers in Egypt rely on us to address all their challenges - and Sealand is well equipped as Maersk's intra-European specialist. Customers use our warehouse not just to keep supply chain inefficiencies in check, but also to enable savings through better container utilisation.

Consolidation at the warehouse reduces the total number of containers used and optimises the utilisation of 40-foot containers.

This can result in substantial savings as the cost per container or customs clearance and trucking is not that different for 20- and 40-foot containers. Additionally, multiple shippers can share one container, paying only for the space they occupy.

That’s not all.

Integrating our SCM services, including our warehouse in Ismailia, with other Sealand solutions such as Ocean, Trucking, Rail, and Customs Services can take operational efficiencies to a whole new level.

As the intra-European logistics specialist, Sealand prides itself on being not only incredibly close to the market, but extremely close to our customers and their needs, too. Facilities like Ismailia alleviate the sourcing and supply chain pain points of lifestyle customers and beyond, enabling us to build strong strategic partnerships with businesses and respond to market changes with optimum agility. Our vast network across Europe offers unrivalled connectivity to customers, while our focus on sustainability means we can also provide more green solutions to customers in an industry where it’s becoming increasingly important to reduce GHG emissions as much as possible.

Stine Pedersen

Vertical Head Lifestyle, Retail, FMCG at Sealand, Europe