Factory closures and supply chain disruptions in the wake of the Covid-19 pandemic continue to hit fashion companies. With shipping costs becoming the main driver of cost increases, 71% of fashion companies plan to localize production near their markets by 2025, according to the latest report from McKinsey & Company.
One way to manage logistics more flexibly, as well as flexibly manage production based on sales data, is to introduce shorter transport routes, the global consulting firm said in a report. Despite higher purchasing costs, nearly three-quarters of McKinsey survey respondents plan to move production from Asian countries to countries close to major markets.
For the first time, Turkey has become one of the three most promising supplying countries for the coming years. Turkey is particularly attractive to the European market: for example, transportation from Turkey to Germany takes three to six days, compared to the 30 days it takes to ship ready-made clothes or shoes from Southeast Asia by ship. Central America is an important destination for the US market.