Monday, September 06, 2021

Happy Labor Day! (And Bonus Post)

Petrie Road's level B Section, taken Wednesday of last week.

Today is the last major U.S. holiday until Thanksgiving, at the end of November. It is a day that marks the traditional "end of Summer' here. So, to my fellow American's- I hope that you all are having a safe, happy, and memorable Labor Day 2021. 

For those of you from outside of the U.S. that read this blog, here is what this is all about here:

"Labor Day pays tribute to the contributions and achievements of American workers and is traditionally observed on the first Monday in September. It was created by the labor movement in the late 19th century and became a federal holiday in 1894." - from Wikipedia.

And now, a bonus post! Which, by the way- This is the 6,000th post I've done here on G-Ted Productions.

 What's Happening With The Bicycle Supply Chain


This past week the Eurobike show took place in Germany where the chatter was all about supply chain disruptions. This is a really important subject with Europeans because of the electrified bicycle market, which is about 50 times that of anything going on here in America, if the stories are to be believed. 

Demand spiked during the pandemic and - as in North America - supply was depleted. Now with COVID still disrupting ports and factories, and with the craziness in container shipping, parts and bicycles are on long lead times. REALLY long lead times. This was hoped to have worked itself out by the end of this year, but as this Summer went along, the problem did not get any better, it actually has gotten worse. 

Many people want to know why we do not have bikes and parts. There is no singular reason. This is a multi-faceted, multi-national issue. Since it is so complex, estimates of a quick turn around to "normalcy" should never have been made. In fact, now CEO's of the bigger companies are not even hazarding a guess as to when this will rectify itself back to something recognizable as what the economy looked like pre-pandemic. I now offer the following reasons why this problem persists...

  • COVID Issues: Factories tied to bicycle production continue to be disrupted by cut-backs and closures/lock downs.  Earlier in the Summer it was Shimano's Malaysian component works which had to be shut down for a little over a month. Now we are hearing factories in Vietnam are being affected, (many brands have frames made there). Ports have been shut down for periods of time during the Summer blocking the exports of products out of China as well due to COVID. As the Delta variant rages worldwide, this issue is still a possible deterrent to getting things back on track.
  • Shipping Container Prices: See that Maersk container ship in today's post? It is laden with thousands of 40ft containers. The biggest container ships can haul up to 20,000 - 24,000 in one trip. Pre-pandemic the cost per container was hovering around $1,500.00 to get from China to Europe or North America. Now with world-wide demand going bananas for everything, container shipping prices have ballooned to $20,000/40Ft container and higher.(Some reports now saying that costs are topping $25,000- $30,000/40ft container)  It has gotten to the point where ships coming from China leave their cargo in North American ports, and instead of coming back with exports, they go back with a load of empty containers instead. It is more profitable for them to do that and get back to North America or Europe with another full load of containers from the Far East due to the insane costs to ship containers now. 
  • Other Shipping Disruptions: Long lines to get stuff out of the Far East has caused some companies to pay premium prices to essentially cut in line ahead of others waiting to get goods out of port. Whether or not certain bicycle brands are doing this, or being affected by this, is uncertain. But, shipping companies are only far too eager to oblige companies that wave the cash in front of them. Then, once things get here, there are literal parking lots of container ships at anchorage waiting to get into harbor to unladen their cargo ships and return to the Far East. (Currently Los Angeles harbor has a record number of ships parked at anchorage waiting to unload at 44 ships) This waiting can take days and usually weeks. Once the port unloads these containers you have to take them by truck, and sometimes by train, to wherever they are to be distributed. However; wild fires shut down one of the major North-South train routes for several weeks, and as far as trucking goes, there is a shortage of labor to drive the rigs, further backing up the loads at port. 
  • Raw Materials, Parts, and Pieces Shortages: To make things worse, now with all the disruptions due to COVID, hurricane Ida, and shipping, the parts, pieces, and raw materials needed to make things are becoming harder to get. Things like steel, aluminum, and rubber - things absolutely vital to the bicycle industry - these things are in very short supply. Try finding gravel tires, or 11 speed chains, or hitch mounted bicycle racks. You get the idea here.

It's so bad now that a trade paper quoted Claus Fleischer, the CEO of Bosch e-bike systems, as saying, "I can't promise anything for the next 12 to 18 months." Do the math folks. He said this at the end of August, 2021. That means you are probably not going to see the end of disruptions until August 2022 - late Winter 2023! 

So, the state of things is such as it is due to various world-wide influences and it will take a year to a year and a half from now to get over it. Maybe. Who knows?! 

And when things do come back? Another industry person was quoted as saying, "(The market) will show some decline as a result", but that there will be price increases due to demand and shipping costs. Basically, your dollar will buy less than it could pre-pandemic. That goes for parts and pieces as well. 

So, my advice is this- Keep what you have in excellent working order. Don't bank on getting a new, shiny rig in the next two years, and be patient! Especially when trying to source parts. Be flexible- Those favorite tires? You may have to settle for something available- whatever that may be. Same with chains, cassettes, and more. Get acquainted with the used market. Lots of people bought bikes in 2020 and many are now bailing on them. (So much for the so-called "Bike Boom") Parts are also being offered up from builds that weren't completed during the pandemic. Check out Facebook Marketplace, various Facebook bicycle sales pages, and Craigslist. I've seen tons of stuff up for sale that you cannot find at shops or online. 

And just ride. Getting away from all the nonsense - even this blog - is probably a good thing. Unplug. get out there and enjoy a good bicycle ride.


tntmoriv said...

Happy 6,000, GT! That is an amazing accomplishment/milestone!!!

Guitar Ted said...

@tntmoriv - Thank you!

john said...

6000,Man that is a lot of time and writing - I'm sure you have enjoyed most of that effort.

MG said...

Happy Labor Day and congrats on post #6,000. That’s awesome!! Here’s to 6,000 more, Brother!!


Guitar Ted said...

@MG - Thanks Brother!

Daniel said...

Congrats on the 6000. I read your blog every night when I get home from work.

Guitar Ted said...

@Daniel - Thank You!