Hellmann Goes Domestic
After taking on the world, Hellmann Worldwide Logistics has set its sites on the United States.
On June 1, the global logistics company will officially launch its domestic services, capping off a year of preparation for the company that provides air and sea freight forwarding, brokerage services, warehousing and distribution contract logistics, and supply chain management services.
“Today, 1 percent of our business is domestic and 99 percent is international, but the goal is to grow the domestic product within Hellmann within the United States,” said Nadine Lafond, branch manager for Hellman’s Columbus office, where apparel accounts for about 95 percent of Hellmann’s business. Two of the company’s largest accounts are Ohio-based retailers The Limited and Abercrombie & Fitch. Other clients include Chicos FAS and Benetton.
Hellmann is based in Osnabruuml;ck, Germany, with its American headquarters in Miami, Fla. There are 22 offices in the United States, including an office in Los Angeles.
The bulk of Hellmann’s domestic business is out of the Midwest and East Coast, according to Ian K. Beckman, senior vice president of sales and marketing. The West Coast represents about 10 percent of the company’s business, but Beckman said this is a growth area for Hellmann. “We are certainly looking to grow the fashion product,” he said. “This is a major market for us and we will advance into these markets that have potential growth.” Although there are several large apparel manufacturers on the West Coast, the region is home to a vast number of small and mid-size apparel companies. Lafond said Hellmann is also well-positioned to meet the needs of smaller apparel manufacturers who can take advantage of the services Hellmann offers to its larger clients.
“Because we have the systems in place, it lends a niche to the smaller apparel companies, providing them much better value than they otherwise would have with someone that doesn’t have those services,” she said. “We can offer them the space, the visibility, the information systems and our expertise.”
The domestic side of the freight-forwarding business may be new to Hellmann, but the 134-year-old company has a global network that covers 341 cities in 134 countries and includes more than 15,000 employees. The company launched its U.S. headquarters in 1988.
The apparel industry is also familiar territory for Hellmann, according to Lafond, who estimated that more than 60 percent of the company’s global business is in apparel.
Shifting business
Most of the company’s apparel business is air freight, Lafond said, adding, “We see more and more of our high-end customers put between 60 and 90 percent of their product in the air.”
This is likely to increase as the recently enacted safeguard measures on some import categories step up the pressure to bring goods in before the temporary quotas are exhausted.
The United States recently enacted safeguard measures, or temporary quotas, on three categories of Chinese-made apparel: cotton knit shirts, cotton pants, and synthetic and cotton underwear. On May 18, four more safeguard measures were approved but have not yet been enacted for manmade-fiber knit shirts, men’s and boys’ cotton and manmade-fiber woven shirts, manmade-fiber trousers and combed-cotton yarn. Additional safeguard measures are expected on five other categories including knit fabric, dressing gowns and robes, bras, and cotton and synthetic sweaters.
“The USA has and/or will be reintroducing this based on numerous complaints by U.S. manufacturers that this is affecting local production,” said Beckman. “This will certainly slow the current import volumes.”
The news sparked concern that U.S. apparel makers would be scrambling to get their existing production shipped before the temporary quotas run out. Some speculated that the safeguards could prompt some manufacturers to shift their future production to other overseas apparel centers.
Lafond said some of Hellmann’s apparel clients were anticipating the return of quotas and are already making the move.
quot;They are starting to shift their production and [for] whatever is going to be caught in those categories, we anticipate a surge in air freight.”
However, the rapidly fluctuating import market could see some stability since China’s May 20 announcement that it would raise export tariffs on 74 categories of textiles and apparel—including pants, T-shirts and underwear—from 21/2 cents per unit to 12 cents per unit.
”With the reintroduction of the tariff for textiles, we see the situation stabilizing,” Beckman said.
