COVID Impacts Supply Chain Issues Again:
The latest news to impact the bicycle, (and other industries and retail segments) supply chains is an uptick in COVID-19 cases in the Far East. Especially important to the bicycle industry is the recent shut down of Shimano's big Malaysian component works.
Shimano, according to a recent "Bicycle Retailer and Industry News" piece, had to curtail activities at its facility in Malaysia on June 1st to 60% capacity and then a week later it was shut down completely. This shut down has now been extended to June 28th, effectively wiping out a full month of manufacturing of mid to lower tier components. Shimano reportedly makes brakes, hubs, derailleurs, wheels, pedals, and freewheels at this facility.
In another article from "BRAIN", contributor, Jay Townley, it is reported that shipping bottlenecks continue with shipping container prices going through the roof. So much so that some companies are now saying it is too expensive to ship anything out of Far East ports now. The situation might best be illustrated by the following quote taken from the "BRAIN article" here:
"According to The Wall Street Journal Logistic Report June 11,
“Dozens of vessels are backed up off the Yantian port in Shenzhen,
straining fragile shipping operations that have been battered by a
persistent empty container shortage and a continuing bottleneck at U.S.
West Coast ports.” The reason? A shortage of workers because of a
surge in COVID-19 cases! "
Furthermore in regard to container shipping prices from the same article;
"Container costs are soaring, and logistics service providers report
desperate American importers are paying well beyond even the listed spot
rates. Human Powered Solutions (HPS) Senior Logistics Advisor, Dave
Karneboge reported on June 7 that the none contract rate, which
currently represents about 30% of container shipments is currently
$10,000 for a 40-foot container that cost under $2,000 a year ago."
This has resulted in a huge delay in getting new bicycles into shops, and a huge shortage of parts to fix bicycles as well. Specifically, at Andy's Bike Shop, which is where I work part time, they are a Kona dealer, and we field calls from across the nation weekly from consumers looking for Kona models. We have seen shortages on brake pads since last year, and cassettes and chains are also in short supply. I recently had to piece together a wheel from a customer's parts and a new rim because complete wheels are non-existent in many sizes.
As a shop, we are not expecting many new bikes now until 2023! Sure.....some stuff will be out, and available, but I don't see a lot of inventory in complete bikes being in shops next season now, especially when parts for mainstream, 'bread and butter' models seems to be shut down and delayed indefinitely. I expect stock to become available in fits and spurts and that finding a new bike on a shop floor will be rare for a long time coming.
As an example, I spoke with a shop manager who works for one of the largest Mid-Western bicycle retailers recently and his specific location has back orders on one hybrid model for 200 units! All customers who have pre-paid and will be waiting for months to get their bicycles. That's one, entry level hybrid model at one shop location- Can you imagine what it must be like nationwide?
Get the picture? This won't get straightened out for a long time.........
New Times- New Marketing:
|Intense MTB as seen on COSTCO's website.|
You may not know about Intense Cycles, but they have been a small, high-end manufacturer of unique, high-performance mountain bikes for years. Intense has never really broken out as a major player in the field. Not that their bikes weren't top class, they just never broke out of their SoCal backyard to become a nationwide force to be reckoned with. Somehow or another, Intense seemed to keep plugging along regardless.
Now, with the marketplace changing at a rapid pace, Intense has found itself reaching out to the big box retail and online player, Costco. With resources combined which give Intense better buying power, Costco has and Intense have partnered to bring a special aluminum framed 951 Trail Bike to a direct to consumer price of well under 4G.
Comments: The marketing and buying power of Costco matched up with the boutique aura of Intense Cycles should be a big hit......for awhile. Typically this sort of an arrangement has the ultimate effect of becoming rather stale after a period of time. Consumers get hip to the lowered, less than special and elite spec and technical frame details, and then on the other hand, the alternative choice tends to become a drag on the rest of the range, making the 'boutique' nature of a brand less than 'boutique'. Consumers are fickle that way. But who knows, maybe Intense can pull off what really hasn't been done well in the past.
But the bigger picture look at this points to more brands doing similar things. Physical retail floor space is becoming more rare for bicycles and many shops are being consolidated in terms of brand choices down to a single brand's offerings. The old 'just-in-time' ordering philosophy of the past decade has left the supply chain drained for the foreseeable future, so this also tends to be an issue with physical placement of bicycle product going forward.
I am already seeing pre-order bike sales being handled by many dealers (as noted above) and it doesn't take much of a stretch of imagination to think that this may become a preferred model for brands going forward. Dealers would take orders on a proposed bike and spec and after pre-orders close, those bikes would be manufactured, delivered, and picked up by consumers. Neat and tidy from an inventory perspective and definitely more predictable on the manufacturing end where quantities available could be dictated up front. Both in terms of a minimum to get the ball rolling and a maximum to insure a sell through.
Orders could be teased up through the use of traveling demos where consumers could try spec bikes and decide on the spot to place a pre-order. While this wouldn't work for mid to lower level bicycle sales, most likely, it could. But I see this being a way to sell high-end MTB, Road, and Gravel in the future. Especially for smaller brands.
But the Walmart/Costco model will probably also be utilized. We already have seen Walmart delve into higher end bicycle sales (Viathon) and I wouldn't be surprised to see an Intense-like brand come onboard with them in the future. But whatever happens, I am betting big retail and smaller, boutique bicycle brands will start holding hands to reach more consumers in the future and bypass the traditional bike shop sales model.
Gravel Worlds- GirlsGetGritty, Form Partnership To Increase Female Participation In Gravel Events:
When we started rolling out Trans Iowa in 2004-2005, it was our intention to include women into the event. But back then, extreme, ultra-distance events were dominated by fields of male participants. Women weren't excluded, but how do you encourage female participation when , you know, the sport is dominated by dudes? It was a conundrum that flummoxed us in the early days of Trans Iowa, for sure. We really wanted to see more women take part, and even more so- to see a woman finisher, but it took seven events before that happened.
I suppose we should have had someone like Angela Naeth helping us at Trans Iowa. That's her, by the way, in the image on the left as she was waiting for the start of the 2021 Unbound Gravel. Anyway, having a voice in the event from a female perspective may have helped our ambitions along and expedited female participation at a much faster rate.
Well, I screwed up. I just wasn't hip to the thought, and that's on me. Truly one of my biggest regrets when thinking back upon Trans Iowa days. Anyway, Gravel Worlds is partnering up with Naeth's all-women gravel race team, "GirlsGetGritty" and Gravel Worlds is offering free and discounted spots to women who belong to Naeth's team and her organization, IRaceLikeAGirl.
Comments: Kudos to Gravel Worlds and GirlsGetGritty for this initiative. As I stated, I've always desired to see participation increase for females in gravel events and that females also get equal prizing and race the same distances as the males do. Fortunately, in terms of the latter two things there, that has always been pretty much the case since the gravel scene kicked of in 2005. So, we got part of it right!
This will also help to make the gravel scene more inclusive and should be seen as another step toward the goal of making this sector of cycling the most welcoming one that has a competitive nature. The gravel racing scene has always been light years ahead of Pro, UCI or USAC type governed cycling and sanctioned events in this area. This despite the endemic media attempts to codify gravel events, and bring them under the realm of 'real racing', whatever that is, and I hope that the major gravel event promoters reject that sort of thinking completely now and into the future. Hopefully GirlsGetGritty and their founder, Angela Naeth understand that as well.
Note: Image and information on the GirlsGetGritty, Gravel Worlds story were provided to me by Matt Gersib, Media Contact for Gravel Adventures LLC.
That's a wrap for this week! Hope that you can get out and ride some! Thank you for reading G-Ted Productions!