Factors changing the European sourcing debate
The industrial climate in Europe remains tense. Euratex reports that capacity utilization in EU manufacturing has fallen below 80 percent by the end of 2024. The association also emphasizes that energy prices remain high compared to key competitors. At the same time, geopolitical uncertainties and trade tensions make investment decisions even more difficult. The volatility of freight costs has increased the “distance penalty”. UNCTAD attributes the renewed fluctuations in transport costs to disruptions on key routes, including the Red Sea/Suez Canal and the Panama Canal. There, diversions, higher fuel consumption and rising insurance premiums are increasing the uncertainty. At the same time, regulatory requirements are becoming more stringent. The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) came into force on July 25, 2024. It obliges the affected companies to identify and remedy negative impacts on human rights and the environment in their operations, subsidiaries and relevant business partners along the value chains. At the same time, on January 1, 2026, the CBAM entered into force in its final form for selected carbon-intensive imports, including cement, iron and steel, aluminum, fertilizers, electricity and hydrogen. This tightens the control of emissions that arise in the preliminary stages of finished products.
Economic compromises and industry suitability
Nearshoring and reshoring can shorten lead times and facilitate development, sampling and quality management. However, they compete with Europe’s structural cost base, especially when energy and compliance costs are high. Therefore, production in Europe can best be economically justified where margins and risk require proximity. This applies to premium goods, technically sophisticated products and accessories. Here, processing, material handling and rapid development cycles can protect brand value. For low-cost, high-volume basic items, overseas sourcing often remains difficult to replace, as economies of scale and unit costs dominate. McKinsey notes that nearshoring has been a high priority for executives since 2016. Nevertheless, the nearshoring share of the industry has not increased significantly. This is an indication that cost and capacity bottlenecks continue to play a role.
The pragmatic answer: dual sourcing with clear benchmarks
The emerging “middle ground” is a hybrid approach: keeping predictable core volumes in cost-efficient regions while simultaneously establishing a local or European source of supply for fast-moving capsule collections and replenishments. McKinsey describes “dual or multi-country sourcing” explicitly as a response to volatility and the pressure for speed and flexibility. Market observation points in the same direction. QIMA reports strong growth in inspections in nearshore centers in the Mediterranean in 2025, including Egypt, Tunisia and Morocco. At the same time, the CBI expects Turkey and Eastern Europe to benefit as European buyers increasingly seek proximity. Buyers who are considering whether “independence” makes sense should evaluate their decisions consistently. They should take the following criteria into account: the total costs upon delivery including volatility buffer; the certainty of delivery times, not the best case scenario; the minimum order quantity and flexibility for subsequent deliveries; willingness to comply with regulations and documentation requirements; as well as the speed of development from sampling to mass production.
Exemplary European options
Against this background, several concrete European procurement options show how proximity can be put into practice. In the accessories sector, the Belt Fashion factory, part of the HVEG Accessories Group, is a European and local option. The company says it makes belts in its Dutch factory using naturally tanned leather from Europe. It also points to its membership of the Leather Working Group and evidence of social audits, including a BSCI assessment and audits from Sedex and ICS. Beyond individual suppliers, the choices are often based on regional strengths. This includes the leather goods ecosystem in Italy, with Assopellettieri noting that almost half of Italian leather goods manufacturers are based in Tuscany. The capacities for knitwear in Portugal are also relevant; The ATP industry statistics record “knitted and crocheted” fabrics and “knitted and crocheted” clothing separately. There are also nearshoring routes in Turkey and Eastern Europe that balance speed to market and cost control.
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