Rising Logistics Costs – A Dual Pressure on Manufacturing and Garment Exports in 2026

Logistics costs emerge as a critical variable in global trade in Q1/2026

Since the beginning of Q1/2026, logistics costs have no longer been a controllable factor for manufacturing, trade, and export-driven industries. Instead, they have become a critical variable shaping operational performance.

For globally integrated sectors such as textiles and garments, fluctuations in logistics costs are directly impacting production expenses, delivery timelines, and profit margins.

According to industry reports and data from logistics providers, cost increases are no longer limited to international shipping. Domestic transportation expenses are also rising, creating a dual-layer pressure across the entire supply chain.

 

International logistics: Rising costs and extended transit times

Vietnam’s textile and garment enterprises are being significantly affected by global geopolitical tensions, particularly in the Middle East.

Key developments include:

• Transit times have extended by up to 20 days or more due to rerouted maritime shipping lanes
• Ocean freight rates have increased by approximately 10%, while marine insurance costs have also risen by around 10%
• In some related sectors, logistics costs have surged by as much as 15% in recent months

At the same time, domestic transportation costs have increased by 3–4%, largely driven by fuel prices, which account for 30–40% of total transport costs.

 

Logistics cost structure in garment manufacturing

In the garment industry, logistics and energy expenses account for approximately 8–10% of total export product costs

This means even a moderate increase in logistics costs can significantly erode profit margins, especially for orders that were priced and contracted in advance.

 

Impact on manufacturing industries, especially textiles and garments

Dual pressure: Rising costs and delivery delays

The garment industry is particularly vulnerable due to several structural characteristics:

• Heavy reliance on global supply chains
• Seasonal production cycles (spring/summer, fall/winter collections)
• Relatively low profit margins compared to other manufacturing sectors

As logistics costs rise and delivery times become less predictable, businesses are facing increasing operational pressure.

Risk of supply chain disruption

Vietnam’s textile and garment sector remains highly dependent on imported raw materials, with approximately 70% of inputs sourced from abroad.

Many garment products rely heavily on petrochemical-based materials such as:

• PE, PP, PVC plastics
• Synthetic fibers including polyester and nylon

In the context of geopolitical tensions in oil-producing regions, the risk of raw material shortages becomes a critical concern.

Potential consequences include:

• Rising prices for raw materials and finished products
• Insufficient materials to fulfill production requirements
• Increased risk of order cancellations due to delays or price competitiveness

Strategic solutions for manufacturers and buyers

To mitigate the impact of rising logistics costs and potential material shortages, both manufacturers and buyers should adopt more resilient strategies.

For manufacturers (garment factories)

• Optimize supply chain and inventory management: Secure raw materials earlier, increase localization rates, and build strategic inventory buffers
• Diversify logistics channels: Avoid reliance on a single shipping route by combining sea, road, and air transport, and working with multiple logistics partners
• Leverage supply chain finance (SCF): Improve cash flow, reduce working capital pressure, and enhance financial flexibility

For buyers and sourcing companies

• Plan orders earlier and adopt long-term procurement strategies: Reduce the risk of delays and cost fluctuations
• Diversify sourcing regions and materials: Avoid dependence on a single country or material type
• Consider alternative materials: Explore bio-based and sustainable materials to reduce reliance on petrochemical inputs
• Prioritize suppliers with stable supply chains:  Choose partners capable of providing diverse materials, local production capabilities, and reliable delivery timelines

Conclusion

Rising logistics costs in 2026 are no longer a short-term disruption but a structural challenge for global trade.

For the textile and garment industry, where cost efficiency and delivery speed are critical, this trend creates significant pressure on profit margins and order fulfillment.

In this context, selecting the right suppliers and building a flexible, resilient supply chain will be key factors for businesses aiming to maintain competitiveness in an increasingly volatile market.