(This Nov. 9, story clarifies the reference period in paragraph 8, as it is now first half of 2020 and not whole of 2020.

Corina Pons and Siddharth Cavale

(Reuters) – Major shoe and clothing companies have begun moving production to European and U.S. markets. This is in response to a resurgence of cases of Delta coronavirus, which was found in Vietnam and China.

This disclosure comes amid huge shipping delays that are driving up freight costs. Companies will need to review their supply chain across the globe and locate low-cost production hubs in Asia.

Spanish fashion retailer Mango told Reuters Friday that it had “accelerated” the process of increasing local production in countries like Portugal and Morocco. The majority of its product imports from China and Vietnam were made in 2019. Mango stated to Reuters it will “considerably” increase the amount of European units in Europe by 2022.

The U.S. shoe retailer Steve Madden also announced on Wednesday it was ceasing production in Vietnam, and that half of its footwear production had been moved to Brazil from China. Crocs (NASDAQ:) Last month, the company announced that it would be shifting production to Indonesia and Bosnia.

The countries that were most in demand from shoe and clothing producers included Turkey, Bulgaria, Ukraine and Romania. However, China still produces a significant amount of apparel for European and American clothing chains.

Barry Conlon (chief executive at Overhaul), a management company that manages supply chain risks, stated, “We’re seeing significant growth in trucking and freight activity in former Soviet Republics…a large rise in Hungary, and Romania.”

In Turkey, apparel exports are expected to reach $20 billion this year, an all-time high, driven by a spike in orders from the European Union, Turkey’s Union of Chambers Clothing and Garment Council data showed. Exports reached $17 billion in 2020.

In Bosnia & Herzegovina, exports of textiles, leather and footwear amounted to 739.56 million marka ($436.65 million) in the first half of 2021, higher than the same period in 2020.

“Many companies from the European Union, which is our most important trading partner, are looking for new suppliers and new supply chains in the Balkan market,” said Professor Muris Pozderac, secretary of the association of textile, clothing, leather and footwear in Bosnia & Herzegovina.

Nordstrom (NYSE 🙂 has made significant changes in the volume of its private-label production in Guatemala. In 2020, Guatemala’s clothing exports surpassed $1 billion. That is an increase of 34.2% over 2020 and 8.8% above 2019.

Many businesses still heavily depend on Vietnam, where production stops have caused major disruptions. Vietnam’s government said in October that it will fall short of its garment exports target this year, by $5 billion in a worst-case scenario, due to the impacts of coronavirus restrictions and a shortage of workers.

In Vietnam factory inspections – which are a proxy for retail manufacturing orders – fell 40% between the first and second quarters. Production during these months moved quickly to Bangladesh, India, and Cambodia. The fourth quarter inspection rates in Vietnam remained at the lower end of their levels, although there was a slight uptick in October. Mathieu Labasse is vice president for QIMA. QIMA represents over 15,000 brands and provides supply-chain quality control audits.

Apparel maker VF Corp (NYSE:) and outdoor gear maker Columbia Sportswear (NASDAQ) Company that advised of possible delays in the fall and spring collections. In some cases, insufficient assortment sizes.

Capri Holdings (NYSE) – Michael Kors’ handbag maker Capri Holdings (NYSE) – said Wednesday that they would not have sufficient inventory to meet holiday demand. Under Armour (NYSE) meanwhile stated last Tuesday that it is cancelling purchase orders for Vietnam from athletic gear manufacturer Under Armour (NYSE) in an effort to get the “factories back up and caught up.”

($1 = 1.6937 marka)