Sourcing Report 2024

Two overarching trends are shaping sourcing today: disruption and diversification.

On the disruption front, shipping difficulties have not let up. Ocean freight is battling bottlenecks tied to capacity constraints in the Panama Canal and reroutes around the Red Sea conflict. And on U.S. shores, dockworker labor negotiations on the East and Gulf Coasts present the possibility of strikes in the peak season.

Labor is another turbulent topic. Following job cuts in logistics—including warehouse closures—the sector is feeling the brunt of staffing shortages. In Bangladesh, garment workers continue to protest a minimum wage increase they say is insufficient for the growing cost of living, and in India’s Tamil Nadu state, a decade-long stagnant minimum wage spurred demonstrations. Questions also remain if brand customers will support manufacturers’ expanding payroll costs with their order values.

Responding to challenges in China—including the potential for detention of goods under the Uyghur Forced Labor Prevention Act and continuing tariff burdens—companies are diversifying away from the manufacturing giant. This presents new opportunities in other parts of the world. Mexico is on the upswing as brands look to produce closer to home, and Africa’s skill and infrastructure continues to grow.

With compounding complexities putting pressure on the industry, technology and data will help companies plan and pivot. “Only through understanding value chains at scale can companies maintain resilient and efficient supply chains through this turmoil,” said Peter Swartz, chief science officer & co-founder of AI platform Altana.

Read the report to learn more about:

• How companies are mitigating risks—including changing the sourcing map and creating logistics backup plans
• The proposed government tax policy that could give onshoring a boost
• Why contract reform and purchasing practices are a lever to protect the industry’s labor force
• The ins and outs of manufacturing in Africa
• What wage changes workers in India and Bangladesh want to see
• Why Turkey’s TYH Tekstil shifted away from fast fashion