Last week, I discussed the impact the meltdown in the US financial industry has had on American importers. Of course, concerns about obtaining credit and maintaining adequate cash flow are not limited to this country alone. In today’s global economy, businesses overseas are equally abreast of our nation’s challenges. Just look at the foreign markets; since October 1, the Japanese Nikkei Index and Hong Kong Hang Seng Index are both off nearly 8% and the Chinese SSE Composite is down more than 5%.

Glove manufacturers have also taken note, nervous that suppliers will not be able to maintain the cash flow to keep up with orders being placed up to 120 days prior to arrival. Payment terms continue to tighten as manufacturers seek assurances that they will get paid.

The opposing forces of stricter payment terms and a credit squeeze put increasing pressures on suppliers. In the next entry, I’ll discuss how Tradex is uniquely positioned to handle these stresses.