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TECH NEWS

Here’s why the bike shortage isn’t going away any time soon

China’s omicron lockdown measures along with ever-prevalent imbalances in the shipping container chain are not good news for seeing the end of supply chain issues

Buying a bike has been really difficult over the past year or so, as a result of demand far outstripping supply thanks mostly to the effects of Covid-19. The recent news of China’s latest port lockdowns and the continuation of the government’s 'zero-Omicron' approach, along with the massive mismatch in the global container market revealed in a recent study, are both causes for concern - supply chain issues are not over yet.

 > Get essential buying advice from the UK bike trade to avoid missing out over here

Container xChange is an online marketplace for container logistics, connecting users and suppliers of container equipment, and it partnered with German applied research company Fraunhofer CML to carry out a study which has revealed that the mismatch in the global container market is far from over. 

Waiting times for containers in Chinese ports have been reduced from 61 to five days, but in Europe the average median number of days is massively up; Germany is now at 25, while in the UK it’s at a staggering 51 days.

Containers may be moving in and out of China at encouraging speeds, but it is the port congestion in Europe that’s continuing to cause problems due to the slow return of boxes to Asia. 

This port congestion is causing the mismatch between supply and demand at the moment, according to Container xChange’s report findings. 

Jefferies Equity Research revealed that due to the inability to process the amount of cargo on time, an average of 36.2% of all container capacity was stuck in ports in November 2021.

That said, the bulk of bikes coming from Asia land in Rotterdam, but Bike Europe spotted this port is absent from the report. The bicycle business journalists reckon this omission suggests that the Dutch port is not facing the same congestion and delays as highlighted for the others - that sounds pretty spot on to us too.  

Nevertheless, the results of the C-Timing study show the end of the imbalance in the container chain is not round the corner, according to Container xChange’s CEO Johannes Schlingmeier.

He said: “There remains an imbalance in the chain, both in terms of containers and ships - this imbalance is also affected by three new disturbances.

"First there is the omicron variant of the virus, in addition the Chinese New Year is approaching and finally there is a lockdown in some ports. We therefore expect a rather volatile start to the year.”

China has been facing multiple outbreaks of the delta and omicron Covid-19 variants in recent days, including across major port cities such as Dalian and Tianjin.

Ship congestion at Chinese ports has already worsened recently as more cities implement strict Covid restrictions because of the outbreaks (in accordance with the Chinese government’s ‘zero-Covid’ policy), or as they tighten testing policies ahead of the Chinese New Year holiday season which starts on 31st January.

While the strict approach has been effective, with the increased transmissibility of the omicron variant, economists are currently doubtful about China’s strategy. 

CNN Business pointed out that Goldman Sachs slashed its projection for Chinese economic growth in 2022 to 4.3% from 4.8%. With those changes made "in light of the latest Covid developments — in particular, the likely higher average level of restriction (and thus economic cost) to contain the more infectious Omicron variant," Goldman analysts wrote.

Consequences

It’s not looking good for the end of the bike shortage then; and in some respects we are only just beginning to see the devastating consequences of the supply chain issues during the Covid pandemic, as smaller brands are no longer able to struggle though. We reported just a few days ago, for example, that Bowman Cycles has liquidated following supply chain woes.

"All that has made life very difficult this year and there isn’t an end in sight to the manufacturing issues coming out of Asia [where many of their components are produced],” Bowman’s founder and managing director Neil Webb told road.cc in November about the “absolute clusterf**k" of supply chain issues.

"For instance, we placed an order with Shimano in December last year that will only start arriving in August 2022. Usually, we’d have bought some stock from Madison [Shimano’s UK distributor] to see us through, but there’s absolutely nothing around."

Webb added that suppliers and distributors appeared to be prioritising their larger clients, meaning "the big players are taking all the space".

"All the smaller businesses like us that I know are experiencing this same problem in some way, shape or form and these constant delays have taken huge amounts of man power to manage."

Other bike businesses are trying hard to help consumers hunt down their desired bike and build. 

Ribble, for example, has a dedicated section on its website with the ‘best availability bikes’ which are “builds that are configured with componentry that is more readily available and is constantly updated and amended to reflect the supply situation”. 

Orbea's approach was to introduce its Rider Connect tool to help consumers view bike models that are currently available at their shop of their choice, as well as incoming bikes and their respective delivery dates. Not all bike shops have a massive online presence, therefore you might not find every bike that you're in the market for by searching online.

Anna has been hooked on bikes ever since her youthful beginnings at Hillingdon Cycle Circuit. As an avid road and track racer, she reached the heady heights of a ProCyclingStats profile before leaving for university. Having now completed an MA in Multimedia Journalism, she’s hoping to add some (more successful) results. Although her greatest wish is for the broader acceptance of wearing funky cycling socks over the top of leg warmers.

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