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ILM Deputy Editor Tom Hogarth ponders whether globalisation is at an end for the leather industry and what the future might look like.
Shipping costs, environmental concerns, conflict, sanctions, raw material prices, Covid-19 restrictions. Any one of these is ample enough reason for companies in the leather industry to have shifted their supply chains to more local sources in the past couple of years.
And why would they go back? All signs point towards some reduction, if not elimination, of the heights of globalisation. Current geopolitical tensions aside, there are two significant reasons why many might feel reluctant to continue sourcing from as far afield as they did before the pandemic.
The first is that transportation costs and availability have hit horrifying highs and lows. The cost of shipping hides from North America to China has risen by as much as eight times and this new cost does not come with any additional benefits. In fact, it’s a guessing game as to when that shipment might arrive and, honestly, who can accept that as normal business practice going forward?
Meanwhile, the leather industry is keenly aware in 2022 of how important it is to strive for greater sustainability and environmental responsibility. However, that awareness doesn’t seem to extend to every corner of our global industry. While tanners in South America champion their ethical sourcing policies and ongoing regenerative agriculture efforts, which you can read more about in our upcoming March/April issue, ILM has frequently reported cases of unashamed pollution by some tanners in Bangladesh and elsewhere.
Seven tanneries, named and shamed, have had their power and water cut off by the Department of the Environment in Bangladesh after authorities finally decided to make a move on the situation at the Savar tannery complex. However, many have argued that this isn’t actually helping the situation. With leather producers and brands across the world under pressure to prove their environmental responsibility, this must be very off-putting for those considering sourcing leather from Bangladesh or already doing so.
While sourcing locally previously came at an unacceptable premium for many companies, now it is likely appealing against the worries of expensive, delayed shipping and environmental mishaps. However, while many have already shifted their supply chains to cope with the pandemic and are unlikely to go back, plenty will have stayed where they were and may stick to their guns.
A hybrid model
As Reg Hankey says in March/April’s Talking Point feature, out later this month: “There is clearly a need for a new hybrid economic model with sustainability as the dominant factor. This new approach will mean that products become more expensive but are built to last. This will impact design and specifications, which will be driven by sustainable credentials.”
Of course, the leather industry will not drop all international ties and its supply chains are very global. The reality is that different animals thrive in different climates around the world and make for the diverse selection of materials that even just the fashion industry demands. But there will be a greater cost to sourcing leather far and wide and in being more discerning about who is providing that leather and their animal welfare and environmental concerns.
In a post-Covid world, the leather industry may look a lot different to how it did in 2019 and only time will tell where the chips will fall. If you want to get an idea of what this might look like, tune into our Future trends in a post-Covid leather industry hybrid conference the day before APLF Dubai on March 29, where industry leaders will provide their honest perspectives on what lies in store.
Tom Hogarth, Deputy Editor