Container ships wait to enter port, delaying deliveries.
What happened? Covid caused factories to close which stopped the production of bikes. Leaving only the bikes in everyone’s inventory to supply the growing demand. It didn’t take long for product to run out with this skyrocketing demand as people began venturing outside again. Everyone needed exercise and relief from the stress of being cooped up by the pandemic. Families started riding bikes together and a whole new slice of the population got exposed to the joy of cycling.
The Giant bicycle factory near Taichung, Taiwan
Photo Credit: An Rong Xu for The New York Times
Now most all of the factories are back up and cranking out bikes but many challenges remain:
- Lead times for manufacturing a bike is 6-9 months due to all of the different vendors involved in making a single bike
- The manufacturing capacity of the world’s factories was barely keeping pace with demand before Covid.
- Large tariff increases remain
- Demand during Covid has more than tripled
- Some factories continue to open and close multiple times due to recurring outbreaks
- There is a similar shortage in many other industries that add extra hurdles to making and delivering bikes
- Global shortage of skilled workers (many people are still away from work due to covid restrictions)
- Global shortage of raw materials and large price increases (aluminum, carbon and steel)
- Global shortage of shipping containers
- Global shortage of ships to carry over product from overseas factories
- Shortage of port space for ships to unload (many ships are anchored off the coast waiting for their turn to dock and unload)
- Shortage of dock workers to unload containers
- Local shortage of trucks to deliver containers to the warehouse
- Spikes in shipping and air freight charges (up to $350 per bike, Ouch!)
- Local restrictions on how many workers can be the the offices and warehouse at any one time
Giant’s factories are running at full steam, to make up for production lost in the pandemic.
Photo Credit: An Rong Xu for The New York Times
Did you know that Santa Cruz had shipping delays this year? Did you realize they dealt with obstacles from a shortage of cardboard boxes to ship bikes in to having wild fires nearly burn down their headquarters. Talk about trial by fire, it's an amazing sign of persistence and dedication to push through such a tough year. Listen to this amazing podcast from VitalMTB where they talk with CEO of Santa Cruz, Joe Graney, about the current state of the bike industry and bike availability.
What’s next? These insanely challenging conditions will not go away in the short term. They are likely to grow based on the ever increasing demand. We anticipate these conditions to last throughout most of 2021. Prices will increase for the manufacturer, distributor, retailer and consumer. The overall USA market will continue to thrive with sport and recreation cycling at all-time highs.
We took a big gamble at the beginning of Covid and placed purchase orders 6 times larger than normal totalling tens of millions of dollars in product. As others were cancelling orders and retrenching, we decided to go BIG! We are currently reaping the benefits of better inventory than most as we are first in line to receive product from the factories.
Bicycle Warehouse Team at Giant USA Headquarters
As always we greatly appreciate and value your business. We thank you for your patience while we navigate through the world wide shortage of bikes and gear.
Stay healthy, ride safe and remember “It’s your world, Ride it!”
- Debbe and Mike Simmons
Owners
