At many bike shops across the country, they’ve stopped answering the phones.
After all, it’s pointless to have the same conversations, to answer the same questions:
Do you have any bikes? No. There’s a global shortage.
Why is there a shortage? Everyone wants a bike.
When does my order arrive? Not sure. Shipping routes are clogged.
When will it be easy to buy a bike again? Maybe 2023.
Instead, shops are sending out dozens – even hundreds – of texts and e-mails a day, where the copy-and-paste function is a lifesaver, freeing up time for the myriad other fires to put out.
“We can’t answer the phone. It rings too much,” said Ira Kargel, partner at Gears Bike Shop, which has three locations in Southern Ontario. “Anyone who just drives by the shop and sees the normal world happening outside has no clue. It’s turmoil.”
Welcome to the Global Bike Boom, unlike any before it. By and large, retailers ran out of inventory a year ago. Their shop floors are still often bare. Shipments are delayed – or worse, cancelled. What they can get their hands on, there’s already a buyer lined up.
No doubt, the bike industry is raking in money. But it’s been a stressful – and competitive – 15 months as manufacturers jostle for parts and factory space, while retailers try desperately to replenish their stock, right in the prime season for moving product.
It’s an extreme version of what’s happening in other industries – from vehicles and dishwashers to couches and lumber – in which supply chains are buckling under a COVID-19 pandemic combination of raging consumer demand, production hiccups and shipping delays.
The situation is not going away soon, either. Bike shortages will carry into 2022, industry veterans say. Beyond that, it’s tough to say. The fear is that after the pandemic recedes, there’s a bust period, echoing one that followed a surge of sales in the 1970s fuel crisis.
Makers of bike components “can’t suddenly start making twice as many parts as they did the year before. It takes time for them to gear up,” said Jake Heilbron, the B.C.-based co-founder of Kona Bicycle Co. “And of course, they have to be concerned that at some point, this massive gold rush is going to slow down.”
For now, retailers are feeling the strain. Ms. Kargel was forced to shutter a location in Toronto’s Leaside neighbourhood, where the floors were empty and rents were pricey.
“Effectively, we closed the uptown store, just to survive,” she said. “That was pandemic-driven.”
The decision helped – but only so much. One of her suppliers recently cancelled a shipment of bikes, equal to 40 per cent of what she was expecting this year. “It was a devastating blow to my business,” she said. And customers are getting less patient, prone to snarky voicemails and temper tantrums when they can’t make a purchase.
“Every night when I hit the pillow, I’m just like, ‘Thank God, the lights are off and the bedroom door’s closed,’ ” Ms. Kargel said. “I feel safe for a few hours.”
The humble bicycle is a feat of engineering.
The most efficient form of human-powered transportation, the bicycle of today looks remarkably similar to its earliest versions, dating back to the 19th century. But its simple design – two wheels, a frame and a handful of parts – belies a complex supply chain, shaped by globalization.
Over decades of competition and consolidation, the industry has moved toward the mode of just-in-time production that’s become standard in other sectors, in which factory locations are guided by trade deals, and few companies supply key components.
A bike includes dozens of parts, sourced from 20-plus companies in various countries, converging at an assembly plant. Manufacturing is largely based in Asia; China, Taiwan and Vietnam are major players in final assembly. For the most part, plants assemble bikes for several competing brands, which are then loaded onto ships for their final markets.
In effect, there’s a slew of brands that sell $2,000 road bikes, but very few that make their brake systems, for example. Complex as it is, the global network runs smoothly.
That is, until COVID-19 hit.
Factory shutdowns in Asia slammed output, and delivery dates were delayed. Then, as production returned, billions of people were largely stuck at home, placing online orders for new sofas, microwaves and sweatpants. It became tough to find shipping containers, given the sheer volume of global goods trade, leading to even more delays.
When bikes got shipped, they might sit idle at ports for weeks, owing partly to COVID-related health restrictions that slowed the unloading process. Those dynamics are still in effect, causing much stress in many industries.
Furthermore, all it takes is a single missing part to delay everything.
“If one company has everything but a chain, and the other company has everything but a front [suspension] fork, nobody’s shipping anything,” said Tim Hadfield, general manager of the bike division at Shimano Canada, part of the 100-year-old Japanese corporation, which is the runaway leader in market share for mid- to high-end components.
“It’s a whole economics lesson on supply chains at that point,” he added.
The other side of that lesson? Demand. People wanted bikes. Lots of them.
Flush with pandemic savings, families were keen to invest in a safe, outdoor activity after months of being cooped up at home, but with their spending options still limited. For workers, bikes were a healthy alternative to public transit. And policy makers were busy redrawing local maps, allowing bikes on streets and freeways where belching four-wheelers once ruled.
The boom took just weeks to materialize. Mr. Heilbron started to notice the action on Kona’s digital platform for sales. “It wasn’t something that was being used in a big way” before the pandemic, he said, with customers preferring to make in-store purchases at independent retailers. “All of a sudden, every night, every weekend, it was just flooded with orders.”
Stuart Querney, the president of Brantford Cyclepath, started getting orders from further and further afield, including Toronto, Windsor and St. Catharines. “It just kept snowballing as time went by,” he said. By June, 2020, he was close to sold out.
Broadly speaking, revenue has skyrocketed. U.S. retailers sold US$6.7-billion of bicycles over the 12 months through March, a 77-per-cent surge from the previous 12-month period, according to data from market research company NPD Group.
In its most recent quarter, Montreal’s Dorel Industries Inc. – which owns and manufactures Cannondale, Schwinn and other brands – saw its sports division book US$270-million in revenue, up 44 per cent from the previous year.
In that sense, plenty of bikes are getting made, despite the production headaches.
But it’s just not enough.
“There’s only one or two sources for key components on the bikes,” said Alex Cogger, chief product officer at Rocky Mountain Bicycles in North Vancouver. “And if those sources are seeing a doubling or tripling of their order volume, no company in the world can scale up to take on that kind of demand in such a short time.”
Martin Le Sauteur was staring down a disastrous year.
The chief executive at bike maker Argon 18 in Montreal started getting calls last summer about lengthy delays, including for Shimano parts that would be used in all of his 2021 models for North America.
Assembly was another headache. The company was set to build its U.S.-bound bikes in Taiwan for the first time. But the factory there kept delaying delivery dates – long enough that Argon 18 wouldn’t receive bikes until September at the earliest.
To salvage the year, Mr. Le Sauteur made some critical decisions. First, Argon 18 sourced components from SRAM Corp. of Chicago, a competitor of Shimano. “In retrospect, it was the best decision we’ve made,” he said, because his company has yet to receive its Shimano orders.
Argon 18 also brought its U.S. production back to Montreal for at least another year, roughly doubling output at its home base. “We basically told the assembler in Taiwan, ‘Forget it, put everything in the container, ship it to me, I’ll take care of it,’ ” Mr. Le Sauteur said.
His company’s moves typify the short-term fixes seen across the industry, in which executives are working the phones and relying on decades-old relationships to alleviate the crisis.
And those decisions are helping – to a point. Argon 18 is now delivering bikes it was supposed to in April. Some delays will be even longer. “We’re delivering some of our product really late this year,” Mr. Le Sauteur said.
It’s a similar story at Rocky Mountain Bicycles. Mr. Cogger was able to reduce lead times with suppliers, but he’s still months behind schedule in sending bikes to retailers.
Some waits are getting extreme. Mr. Cogger said lead times for entry-level suspension forks – used in mountain bikes priced from $500 to $1,500 – have swelled to about 550 days at the Taiwanese company that dominates the market. Under normal circumstances, lead times of 60 to 90 days are typical for parts suppliers.
To cope, Rocky Mountain has already preordered everything it needs for its 2023 bike models and needs to place their 2024 orders soon, Mr. Cogger said.
“It’s not just long lead times that have ramifications,” he said. “The other [one] is constant price adjustments on the up. Everyone’s increasing their costs.”
Costs of materials – including carbon fibre, aluminum and rubber – have soared over the past year, a reflection of supply shocks and the insatiable demand for all sorts of consumer goods.
Transportation costs have also exploded. Freight rates have jumped 300 per cent over the past year, according to an index of eight major routes from Drewry, a maritime consultancy.
The complicated modern bicycle
Fifty-one parts. Twenty-eight suppliers. Five countries.
That’s what it takes to build the Instinct Alloy 50 from
North Vancouver’s Rocky Mountain Bicycles, which retails
at $5,649. It’s a complicated supply chain that tended to
run smoothly – until COVID-19 came along.
THE GLOBE AND MAIL, SOURCE: rocky mountain
The complicated modern bicycle
Fifty-one parts. Twenty-eight suppliers. Five countries. That’s what
it takes to build the Instinct Alloy 50 from North Vancouver’s Rocky
Mountain Bicycles, which retails at $5,649. It’s a complicated supply
chain that tended to run smoothly – until COVID-19 came along.
THE GLOBE AND MAIL, SOURCE: rocky mountain bicycles;
The complicated modern bicycle
Fifty-one parts. Twenty-eight suppliers. Five countries. That’s what it takes to build the
Instinct Alloy 50 from North Vancouver’s Rocky Mountain Bicycles, which retails at $5,649.
It’s a complicated supply chain that tended to run smoothly – until COVID-19 came along.
The frame is built
in China, a power-
house in bike man-
past couple years
have been tough,
however, owing to
U.S. tariffs that
targeted a variety
The grips are the
from the U.S. Much
like other industries,
bike production has
with relatively little
assembly in North
built in Japan
the leader in
The fork is
made in Taiwan,
along with most
of the parts on
bike. Taiwan has
become a hub
The brakes are
made in Malay-
sia, also by Shi-
mano. Malaysia is
a valuable manu-
due to its member-
ship in a Trans-Pac-
ific trade deal
Canada has also
THE GLOBE AND MAIL, SOURCE: rocky mountain bicycles; freepik.com
That’s all hitting consumers’ wallets. Rocky Mountain imposed a mid-season 4.5-per-cent price hike on all 2021 models in North America. Kona raised its prices by 5 per cent to 10 per cent on various 2021 bike models at mid-season, a first in the company’s 33-year history.
In March, the average amount spent on bikes in the U.S. jumped 27 per cent from a year earlier, NPD Group said. That was not only because of price hikes, but consumers being pushed into pricier models, given the lack of supply.
For restless customers with even more cash to burn, Argon 18 has another offer: the friendly skies.
“Everything is ready at the factory,” Mr. Le Sauteur said. “But if I put it on the water, with a shortage of containers, and delays on the rail, you’ll get your bike in October. Put everything in an airplane, you’ll get it in July. Are you willing to pay for that? Because I cannot eat it myself.”
Asked about a return to normalcy, the bike industry can’t nail down a date – or even a year.
Maybe it’s the fall of 2022. Maybe it’s 2023. Or maybe something has permanently changed – that the public’s rekindled love of cycling will outlast pandemic restrictions, keeping demand high and factories in catch-up mode for some time.
“I don’t think we have enough data to really say how it’s gonna play out,” said Dirk Sorenson, a sports industry analyst at NPD Group. “The opportunity for a cyclist to go back to the gym, is that going to slow the rate of interest in cycling? We just don’t know yet.”
What’s clear is that next year will be busy. Customers are preordering bikes as far out as 2023, said Rick Snyder, the head of Mike’s Bike Shop in Dieppe, N.B. If they cancel, no big deal: There’s someone else in line. “At this point, there’s just hundreds of names for every bike,” he said.
Bicycle brands now approach retailers with allotments of what they can order, Mr. Snyder said, and he’s taking all he can get for next year. “Every bike for 2022 that’s going to be manufactured is already spoken for by dealers like myself and around the world,” he said.
Still, the pandemic continues to be a complication. As more Canadians get fully vaccinated and eye a return to normalcy, other parts of the world are struggling with a surge of cases. One critical example: Malaysia. The Southeast Asian country was recently hit by its largest wave of infection, prompting tighter health restrictions. As a result, a Shimano factory in Malaysia has been shuttered for weeks, dealing another setback to the industry.
Even in China, where COVID-19 was quickly brought under control, the virus remains a threat. A small outbreak tied to the Yantian terminal in Shenzhen – one of the world’s largest ports – has weighed on activity the past month, exacerbating logjams in global trade.
“Fighting to get reliability back into operations and services back on schedule after the Suez incident in March, the port congestion in Yantian, with neighbouring ports Shekou and Nansha also affected, is an added pain at a time where global supply chains are already stretched,” Maersk, the world’s largest container shipping line, said in a recent statement.
For retailers, the risk is that they’ll eventually get stuck with loads of unwanted bikes, should consumers gravitate to what was constrained in the pandemic, whether that’s restaurants, travel or concerts. A return to normalcy might be the worst thing imaginable for the cycling industry.
“It’s basically a lot more gut reaction and hoping” in the planning process now, said Mr. Querney of Brantford Cyclepath, who’s still waiting on a lot of what he ordered for this year. “There’s no crystal ball that tells us anything useful anymore.”
Kevin Senior, who runs Bow Cycle & Sports in Calgary, is likewise still waiting on some 2021 deliveries. But he’s also ramped up his orders for next year. If demand tails off, he’ll simply carry that inventory into 2023.
“We’d rather be in that position … than [what] we’re in today,” he said, “where we don’t have bikes and people are walking into our store, and can’t buy what they want.”
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