Nearshoring rises as brands seek supply chain visibility

By Saartaj Jun 1, 2026 0

There is a narrative gaining momentum in global sourcing circles, and if you run a factory anywhere in APAC, you need to hear it clearly. Not because it is entirely true, but because it is actively influencing where brands place their next order.

The narrative is simple: Asia is too far, too risky, too opaque. Move closer. Move to Türkiye. Move to Mexico. Move to North Africa.

A growing shift toward nearshoring in apparel sourcing is being driven less by geography and more by limited supply chain visibility.
Brands seek real-time, item-level data to reduce risk and errors.
APAC factories that invest in RFID and digital verification can close this data gap, improve shipment accuracy, reduce chargebacks, and remain competitive in global sourcing decisions.

The Data Behind the Drift

The signals are structural, not cyclical. In McKinsey’s 2021 Apparel CPO Survey of leading procurement officers across North America and Europe, 71 per cent said they planned to increase their nearshoring share. US and EU apparel and textile imports from nearshoring destinations are expected to rise by two and three percentage points respectively by 2030, according to the BoF-McKinsey State of Fashion 2025. Trade barriers and supply disruptions have increased fivefold since 2015, with around 3,000 trade restrictions imposed in 2023.

Meanwhile, freight volatility continues to upend cost planning. Asia-to-US container rates more than doubled on some routes during 2024. Input costs remain volatile. APAC factory margins are being squeezed at both ends.

For factory owners in Vietnam, Bangladesh, and India, this looks existential. But look closer, and the real threat is not geography. It is the absence of real-time operational data.

Proximity Is an Illusion of Control

Brands are not moving production because Central America is inherently better at making garments. They are moving because proximity creates a feeling that a two-hour flight to the factory floor means fewer surprises.

When a brand places an order with a factory 12,000 kilometres away and receives limited visibility between order confirmation and container loading, that distance becomes a liability. Not because of the kilometres, but because of the blind spots in between.

This is the gap that separates the APAC factories losing orders from those consolidating them.

Many apparel retailers operate with inventory accuracy rates between 60 and 75 per cent using traditional barcode methods. RFID item-level data reveals 2 to 10 per cent mispack rates on apparel cartons. When freight rates have doubled on key routes, a 3 per cent shipment discrepancy is no longer a minor inefficiency. It is a catastrophic cost multiplier. Every mislabelled carton, every mismatched packing list, every chargeback at destination: these are the hidden costs that drive a brand’s procurement team to conclude it would be simpler to source closer to home.

The solution is not to accept the loss. It is to close the visibility gap.

Closing the Gap from the Factory Floor

SML’s Factory Care Solutions (FCS) delivers real-time, item-level visibility, verified shipments, and proof of performance from production to dispatch. Combined with In-Plant Printing (IPP), which extends SML’s deep labelling expertise into on-demand RFID encoding and printing at the factory floor, FCS enables manufacturers to reduce errors, protect margins, and ship with confidence.

This is not just an operational upgrade; it is a strategic shift toward data-driven manufacturing: adding real-time digital verification to the physical identification layer that has always underpinned accurate supply chains.

Client deployments have shown up to 95 per cent improvement in shipment accuracy, 40 per cent reduction in production delays, and 30 per cent faster turnaround times. In one deployment, FCS delivered near-total tag readability, and the client reported significant chargeback reduction.

“The factories winning orders today are not just cost-competitive, they are data-competitive,” said Mandy Leung, Regional Sales Director for Southeast Asia at SML Group. “When a manufacturer can hand a buyer verified, item-level shipment data before a container leaves the gate, distance stops being a disadvantage.” Consider what this means in practice for your factory. When your buyer’s supply chain team logs into their planning system, they see your production status in real time. They see verified shipment contents before the container leaves your gate. They see proof of accuracy, not a promise of it. The 12,000 kilometres between your cutting floor and their destination distribution centre suddenly matter far less, because the data gap has collapsed to zero.

Nearshoring Does Not Solve the Visibility Problem

The nearshoring trend is real. But the assumption that it fixes visibility is not. The average tariff rate for US apparel imports reached 26.4 per cent in July 2025, a new high in decades, yet there is still no evidence that tariff policy has meaningfully boosted nearshoring from the Western Hemisphere. A factory in Central America with manual workflows and barcode-based tracking still produces the same blind spots that frustrated buyers in Asia.

The factories that will define APAC’s next chapter are those that invest in digital infrastructure at the point of manufacture. With more than 20 billion products connected worldwide and over 600 global brands served through solutions spanning tags and labelling, RFID, Digital Product Passport readiness, FCS, and Digital IDs, SML’s track record demonstrates that verifiable, item-level data has become the new currency of supply chain trust.

The Question Has Changed

The question is no longer whether your factory makes good garments. It almost certainly does. The question is whether your buyer can verify that what was ordered is what was shipped, in the right quantities, to the right destination, on time, with RFID-enabled data they can trust at the point of dispatch.

Brands are not leaving Asia because of distance. They are leaving because they cannot verify what is in the container until it arrives, and by then, every discrepancy becomes a cost, a delay, and a reason to look closer to home. RFID-enabled shipment verification closes that gap at the source.