After decades spent “offshoring” production the pandemic, war and climate crises have made us painfully aware of the vulnerability and impacts of our globalized supply chain. Is “nearshoring” production back to nearby countries the solution? We take a deepdive into the bicycle apparel industry’s efforts to find out.
A world tour, crisscrossing the globe. Thousands and thousands of kilometers travelled on truck beds, on container ships, on goods trains, and sometimes even in airplanes. Yet, if you follow the path of textiles from the original materials to the finished product in the shops, you quickly realize that hardly any other industry represents globalization as clearly as the textile industry with its seemingly endless supply chains. Supply chains that certainly leave their mark on our environment: According to estimates in the report “Fashion on Climate” by the consulting firm McKinsey & Company, the textile industry causes 2.1 billion tons of CO₂ annually, corresponding to roughly 4% of global emissions. Although the use and disposal of textiles were also counted in the survey, production and delivery routes nevertheless contribute their share to this environmental balance.
For this reason, it is often the textile industry that is put in the spotlight when it comes to sustainability efforts in global supply chains. This also applies to the manufacturers of sportswear and cycling clothing. Indeed, looking at the various cycling clothing brands, it very quickly becomes apparent that a mix of international production locations, largely in Asia, is also widespread here. According to the Taiwan Association of Machinery Industry (TAMI), 70% of the world’s capacity for functional textiles is processed in Taiwan alone. Other major production locations are China, Vietnam and Bangladesh. In Europe, Italy is considered the most important region for the production of sports and cycling fabrics. Therefore, it is no coincidence that McKinsey & Company, when publishing “Fashion on Climate,” called on not only the brands but also the suppliers to make their supply chains more sustainable, notably by focusing more on nearshoring, i.e., the relocation of operational activities to nearby countries.
Biking to carbon neutrality
At the same time, the origin of clothing products in the bicycle industry is by no means just an issue for the industry but has long since reached the general public’s awareness. The latest edition of the Global Sustainability Study by the consulting firm Simon-Kucher & Partners showed a strong paradigm shift with regard to the end consumers’ view of the topic of sustainability. The tenor of the study: More than a third of consumers are willing to pay more for sustainable products – including clothing. It is a need that has also arrived in the bicycle industry, where many brands are striving to optimize their supply chains. One example is the US brand Pearl Izumi:
“The topic of sustainability is more important than ever for our customers and is already a decisive criterion when buying products. The topic will continue to gain importance in the future,” says Amelie Köhler, Digital Marketing Manager at Pearl Izumi’s German sales partner Paul Lange.
“The advantages of short delivery routes have already been clearly demonstrated in the pandemic and will continue to be in focus,” she adds and refers to reduced CO₂ emissions due to shorter delivery routes, faster availability of goods and more flexible orders.
Indeed, Pearl Izumi produces the majority of its clothing in Europe, where the most important production locations include Italy, Romania, Albania and Turkey. Only a few accessories still come from Asia, according to Köhler.
“In addition, internal processes are shortened due to shorter delivery and lead times, which further facilitates planning,” she continues.
To make its ambitions clear, the manufacturer has specially launched a “pedal-to-zero campaign” this season: All new Pearl Izumi garments feature a statistic that shows how many kilometers must be travelled by bike instead of by car to neutralize the CO₂ emissions from the production and transport of the respective product.
Another example for the efforts by cycle clothing manufacturers to make supply chains more sustainable is Isadore Apparel from Slovakia. Currently, production takes place in Slovakia, Portugal and Lithuania. Since the brand’s beginnings in 2013, however, they have tried to optimize production processes and the choice of production locations, as co-founder and former professional cyclist Martin Velits explains.
“We attach great importance to being able to trace the origin of our materials. This traceability is a crucial feature of a sustainable textile industry,” he emphasizes, referring to the Traceability Report published for the first time last year, which explains exactly which materials have been processed in a garment and where they come from.
One example is the “Signature Jersey,” made of merino wool that comes from Australia and polyester from Spain. The fibers are then processed in the Czech Republic and in Germany before being sewn together to make the cycling jersey in Púchov, Slovakia.
“We chose our locations in Europe because good working conditions for textile workers are important to us. We know they receive a living wage in Europe and work under good conditions there,” says Martin Velits.
At the some time, however, he points to a difficulty in working with European companies: The lack of European suppliers for specific resources.
“Although Isadore locates its production in Europe, the special recycled yarns, for example, are unavailable on the European market and have to be sourced from Asia,” he explains.
Low infrastructure, high effort of nearshoring
Martin Velits thus signals the first of several hurdles ensuring that most of the world’s sports textiles still travel thousands of kilometers across the globe before reaching the retailers, even in times of greater sustainability awareness. The current market distribution is a consequence of a development that already began in the 1970s: For cost and capacity reasons, the textile industry, which used to be strong in Europe, has since shifted more and more towards Southeast Asia.
This development has evolved to such an extent that today the bulk share of clothing purchased in Europe comes from imports. At the same time, the know-how required to produce apparel more locally is now scarce. China is now considered the production world champion and the market leader of apparel technologies such as bonding techniques. One of the consequences of this development is the long delivery routes mentioned at the beginning – and a massive ecological footprint.
The German manufacturer Vaude knows this problem very well:
“Our customers ask us repeatedly why we don’t manufacture all our products in Germany or Europe and why a large part of our clothing comes from Asia instead. The answer to this is as complex as simple,” says Anna Rechtern, spokesperson of the Germany-based company.
“The fact is that almost the entire textile processing industry for outdoor functional clothing, including the upstream supply chain, is located in Asia – some countries there specialized in this decades ago. We can therefore only produce a portion in Germany or Europe, and we do so as much as possible,” she adds.
To reduce the supply chain’s environmental impact, Vaude has undertaken several initiatives in the recent past: Transport by ship and rail is made climate-neutral through compensation payments to the organization “Myclimate.” In addition, together with industry associations, the company is campaigning for more sustainability in logistics. And in a study project carried out together with Darmstadt University of Applied Sciences, the company has also dealt intensively with the question of how to optimize the flow of goods in order to reduce emissions.
Another German-based clothing manufacturer, Schöffel, is also aiming to produce more locally:
“Our cycling shorts are mainly produced in Albania by our Italian partner. But we also produce cycling clothing with other long-standing partners in Asia,” Schöffel expert Marco Tenace confirms, but admits that bringing all production to Europe is currently not practical:
“The manufacturing expertise for functional clothing and the associated infrastructure are largely located in Asia. We could not produce the required amount of cycling clothing in Germany,” he says.
The examples of Vaude and Schöffel demonstrate that the effort required to make supply chains more sustainable is indeed very large for many brands, and this represents the second hurdle of nearshoring. This is all the more true when new suppliers have to be found in Europe.
Nearshoring’s high costs
Following non-existent infrastructure and high organizational effort – the third major hurdle on the way to more textile production in Europe is the higher costs. According to a data analysis by the online portal www.minimum-wage.org, the minimum monthly salary of a textile worker in China is currently just 217 USD. In Taiwan, it is 747 USD. In France, on the other hand, textile workers already earn at least 1,554 USD a month. Even though this is data from classic textile processing and not from the processing of highly technical functional materials of cycling jerseys, it provides information about the unequal production costs in the respective regions.
“The current development in the industry shows a clear trend towards Europe as a production location. As a result, however, labor costs are significantly higher, which is also reflected in the price of the products,” confirms Paul Lange expert Amelie Köhler.
One company, however, has succeeded in taking the concept of nearshoring to the next level: Löffler. This functional clothing producer demonstrates that textile production can also function at a high level north of the Alps: At the company headquarters in Austria, 210 skilled workers produce around 1.3 million units of functional clothing every year. 70% of the fabrics are produced in the company’s own knitting mill, and all steps from development and fabric production to final inspection and shipping take place in Austria. Only the sewing work is outsourced: To a subsidiary in Bulgaria and to partner companies that all produce in Europe. 90% of the added value is generated in Europe.
“Relocation to the Far East has never been an issue. This has been part of our philosophy since the company was founded. Regional production and value creation are a valuable asset that we want to continue to preserve and carefully develop,” reports Managing Director Otto Leodolter.
The decisive criteria for the choice of locations in Austria and Europe are also short transport routes and regional procurement.
“The competence of the employees is also an essential factor in our decision,” adds Otto Leodolter, who at the same time also mentions the challenges of local production:
“Higher wages as well as strict legal and environmental regulations increase the costs. The sourcing of raw materials also becomes more complex in some cases, as we want to keep the procurement route as short as possible.”
In any case, this commitment is well received by customers:
“People are consciously making sustainable purchasing decisions. Brands that live responsible values and are authentic are very popular.
Santini is another good example that the production of high-quality textiles can also succeed in Central Europe. In Lallio near Bergamo, about 150 employees produce cycling clothing. They work closely with several local suppliers.
“In Italy we call these companies Kilometer Zero partners. Choosing suppliers from the local area is one way to become more sustainable,” Paola Santini affirms.
To strengthen the production site, they plan to move to a new headquarters directly in Bergamo this year.
“We have already moved the production there and by the end of the year we will also move the administration, the showroom, our museum and the flagship store,” she continues, adding,
“Our business is growing and to support the development expected in the coming years, we have decided to move the company to a location that can facilitate the strong business growth. ”
Think globally, act locally
In sum, the efforts to make supply chains more sustainable are substantial in the cycle clothing industry. But there are still many hurdles, many of which remain insurmountable for the time being. Starting with the lack of infrastructure in Europe, to the organizational challenges associated with a corresponding conversion, to the costs.
A key to lower CO₂ emissions in the long term could be the motto “think globally, act locally” – i.e. intensifying sustainability efforts at production sites in Asia and at the same time investing in more local production in Europe. In any case, all the companies surveyed are willing to work on the sustainability of their supply chain.
“The shortening of supply routes is a clear focus for us,” confirms Pearl Izumi expert Amelie Köhler.
“This includes not only production, which takes place mostly in Europe, but also sourcing the majority of materials from suppliers that are as close as possible to the production site,” she continues.
At Schöffel, they similarly want to tackle both the production sites and the means of transport, as Marco Tenace says:
“The choice of location is not always decisive for low CO₂ emissions. The energy mix at the production site also plays a role. It is also very important to reduce air freight and road transport. Therefore, the topic of green logistics is an elementary component of our holistic sustainability strategy.”
These examples demonstrate that the will to change exists among clothing companies in the bicycle industry. However, despite all these efforts, most bicycle textiles will still have to travel around the world before they end up in the shops, at least in the near future, due to the prevailing conditions of globalization. A world tour, crisscrossing the globe. Thousands and thousands of kilometers traveled on truck beds, on container ships, on goods trains – and sometimes even on planes.
Lead Image: Schöffel/Christian/zooom