Lululemon set to increase air freight to avoid port congestion in Asia
The apparel giants, Lululemon Athletica, is set to increase its use of air freight in a bid to avoid the expected port congestion in Asia due to expected tariff increases, according to Supply Chain Dive.
PJ Guido, Chief Financial Officer of Lululemon, has said that the move to air freight was to ensure on-time delivery of fall merchandise instead of being seen as an attempt to beat tariffs.
In a first-quarter earnings call on Wednesday (12 June), Guido commented: “We're anticipating port congestion right around the timeframe starting around the middle to the end of July and we think it's prudent and important to deliver new products for our guests to protect the sales associated with those goods. We're protecting our fall deliveries. And that's why we're doing it, it's a hedge and we're eliminating the risk.”
With the tariffs on Lululemon described as “moderate”, just 6% of the activewear company’s finished goods comes from China, with only 1% subject to tranche three tariffs.