The CEO of folding bike maker Brompton Bicycle has warned that a shortage of raw materials is hitting the cycling industry, and that it could take a year and a half for the sector to recover from the supply chain problems that have hit it since the beginning of the coronavirus pandemic.
Speaking at the Financial Times Future of Manufacturing event this week, Will Butler-Adams said that sourcing raw materials had now surpassed shortages of components as an issue for the industry.
“Over the past 18 months, the supply chain has retrenched further and further back and now the problem is you simply can’t get hold of aluminium, you can’t get hold of steel, you can’t get hold of these raw materials,” he said.
Butler-Adams believes that it will take around 18 months for the situation to be resolved, and outlined some of the problems the company has encountered, such as suppliers requiring payment in advance, or lead times for saddles rising to two years, as well as parts being held up in transit.
“Suddenly our cash has just gone and then the cost of goods has gone through the roof,” he said.
While the coronavirus pandemic has boosted Brompton’s global sales by 20 per cent, it has also resulted in huge increases in shipping costs.
That is exacerbated in the case of the UK – where the bikes are made at the company’s factory in West London – by Brexit, with the shortage of lorry drivers now leading to massive backlogs at major container ports.
In response, Brompton has sought to circumvent those problems by raising its spend on air freight, which stood at £45,000 prior to the COVID-19 crisis to £1.7 million.
The company had already warned at the end of last year, just ahead of the end of the transition period of the UK’s departure from the EU of problems associated with delays at ports, and also warned that parts it had stockpiled in anticipation of potential disruption due to Brexit had already been used up due to the pandemic.
Meanwhile, the company is also looking to reduce its reliance on suppliers based in Taiwan as tensions escalate between that country and China, whose President Xi Jinping has pledged to “fulfil reunification.”
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.