Conclusions weren\u2019t clear. Neither was an end to the shortfall. Fast forward to 2022 and the situation seems frozen, with queues for orders remaining longer than the convoy of lorries choking their way in and out of Dover. It begs the question: is there any light at the end of the very long production and supply tunnel?<\/p>\n
\u201cSadly, it still feels very dark.\u201d That\u2019s Chris Ratcliff, business development director at Brighton-based Reilly Cycleworks.<\/p>\n
\u201cI heard Dominic Langan [CEO of distributor Madison, which brings multiple cycling brands into the country, including Shimano] saying he feels things will be fine by the end of the year. I\u2019m not seeing it.\u201d<\/p>\n
Langan was talking at digiBike, a month-long online version of the iceBike trade show that Madison usually hosts at its Milton Keynes HQ. He was candid about the supply issues that have suffocated the industry over the past two years, specifically on the component side.<\/p>\n
\u201cThe whole market changed dramatically from March 2020. The demand for supplies just went through the roof. And whilst we started with quite high stock levels, and we actually did pretty well for the first part of 2020, as time grew those supplies became depleted.\u201d<\/p>\n
![\"""\"](\""https:\/\/images.immediate.co.uk\/production\/volatile\/sites\/21\/2022\/06\/The-waiting-game-01-0288716.jpg?quality=90&resize=619%2C413"\" "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div>Lockdown equalled reduced output coming out of Asia. Lockdown also equalled a potential bike boom. That equation was only going to result in delays and frustration.<\/p>\n
\u201cOur stock of Shimano is increasing every day and we are seeing some good positive trends on that score,\u201d Langan continued.<\/p>\n
\u201cBut there are certain lines where we know we\u2019re going to be challenged for stock all year. And we\u2019re going to retain the rationing that we\u2019ve done on B2B to try to ensure that every customer has a fair opportunity to get that stock, so they haven\u2019t got customers left high and dry in the store.\u201d<\/p>\n
Little to go around<\/h2>\n ![\"""\"]( "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div> Supply-chain problems have forced some brands out of business.<\/span><\/figcaption> Joe Waldron \/ Our Media<\/i><\/span><\/div>\nIt\u2019s that enforced rationing that\u2019s leaving the likes of Ratcliff unsated.<\/p>\n
\u201cWhat\u2019s happening is distributors are being forced to drip-ship, say, groupsets to shops and bike builders like us, who have materials for frames. So, instead of a full groupset, we might receive a chain or crankset.<\/p>\n
\u201cI can see why they\u2019re being forced into this situation, but it means we might end up having 47 left-hand shifters piled up next to five right-hand shifters. That doesn\u2019t really help, especially when you pay for the stock up-front.\u201d<\/p>\n
Warehousing stock, says Ratcliff, results in a cascade of further costs from increased storage space and cranking up of insurance premiums.<\/p>\n
This is at odds with the traditional \u2018just-in-time\u2019 production model, also known as lean manufacturing or lean production, where the focus is on producing exactly what\u2019s needed when the customer wants it.<\/p>\n
This reduces capital tied up in stock, as well as minimising waiting times and preventing over-production.<\/p>\n
This build-up of product is a security risk, too, both in the warehouse and in transit, as highlighted by a recent incident in the Czech Republic where the country\u2019s largest bike maker, Fun Bike International, had the equivalent of 10,000 bicycles\u2019 worth of OEM (Original Equipment Manufacturer) finishing kit stolen en route to the assembly plant.<\/p>\n
A truck driver transporting components from Germany was gassed to sleep in a parking lot by criminals, who then drove off with the Shimano stock.<\/p>\n
Madison, like its fellow distributors, remains hamstrung by supply issues, exacerbated by a host of new openings, in particular workshop-only outfits.<\/p>\n
\u201cThey would have joined the back of a stretched-out queue, exacerbating the order books being distorted,\u201d says Mark Sutton, editor of Cycling Industry News<\/em>.<\/p>\nThe hopeful ironing out of these supply issues will come too late for some. Geoffrey Butler Cycles closed down in February 2021 after 40 years of business while, more recently, Bowman Cycles entered liquidation after what founder Neil Webb called an \u201cabsolute clusterf**k\u201d of delays all the way up the supply chain.<\/p>\n
![\"""\"]( "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div> Not even major brands are immune from the challenges the cycling industry faces.<\/span><\/figcaption> Joe Waldron \/ Our Media<\/i><\/span><\/div>\nEven biking behemoths such as Halfords have taken a hit: it recently revealed plans to buy and sell second-hand bikes in a move to bypass shortages and shipping distribution, suggesting customer delays could continue for some time yet.<\/p>\n
Inevitably, cashflow is an increasing concern for many cycling businesses, especially smaller outfits that don\u2019t carry the same weight as bigger companies when it comes to investment or obtaining loans.<\/p>\n
And, of course, if you can source funds to cover your shortfall, at some point you need to start paying them back. \u201cWe all took out significant loans during the pandemic and now we\u2019re having to do just that,\u201d says Ratcliff.<\/p>\n
\u201cWe\u2019re not out of the woods yet and won\u2019t be till sometime next year. I predict it\u2019ll be 12 to 18 months before the dust starts to settle.\u201d<\/p>\n
While Darwin said only the fittest would survive, in the bike industry it\u2019s seemingly the most flexible who\u2019ll ride through the current storm.<\/p>\n
According to the Cycling Industry News 2022 Market Report, 51 per cent of independent bike shops adjusted their main wholesale suppliers in the wake of shortages, looking further afield and to untested sources to fill gaps; 43 per cent went even further, taking it upon themselves to source goods directly to fill supply gaps.<\/p>\n
The problem with this approach is that buying parts from retailers instead of distributors cuts profit margins, heightening those cashflow issues.<\/p>\n
Throw in factors such as freight costs, which in some cases have reportedly tripled, and, if the bike business survives, inevitably the customer will see further cost increases.<\/p>\n
The long-term albatross<\/h2>\n ![\"""\"]( "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div> According to a 2022 report, 43 per cent of independent bike shops sourced goods directly to avoid supply shortages.<\/span><\/figcaption> Joe Waldron \/ Our Media<\/i><\/span><\/div>\nBrexit\u2019s trade ripples continue to flood the industry with doubt, uncertainty and expense. \u201cThe problem is it\u2019s hard to unpick which one\u2019s having the greatest negative impact \u2013 Covid or Brexit,\u201d says Keith Noronha, managing director at Reynolds Technology.<\/p>\n
The iconic brand, which has enjoyed a renaissance in recent times with the likes of high-tech 953 steel tubing, suffered from staff isolation and Covid-fuelled freight increases but, for the most part, remained resilient when it came to sourcing material.<\/p>\n
Covid was a pandemic no-one could have predicted and its repercussions will be felt for a while yet. When it comes to Brexit, however, the seemingly self-inflicted trade wounds lead Noronha to laugh a derisory laugh.<\/p>\n
\u201cWe sell so much into the EU, so you can probably guess we\u2019re not fans. As a global UK business, we export to countries like the US, China and Taiwan.<\/p>\n
\u201cBrexit\u2019s brought the same hassle factor for exporting into the EU as to these places. There\u2019s extra costs and paperwork, and it\u2019s often a two-way thing. We might ship steel out to an Italian frame builder, who\u2019ll work with the metal and then send it as a built-up bike back to a UK customer.\u201d<\/p>\n
\u201cThat\u2019s additional friction both ways. I know from a supplier\u2019s point of view that you could easily add an extra \u00a3100 of administration costs onto an invoice of \u00a3200 to \u00a3300. It\u2019s why I\u2019ll tend to find someone local.\u201d<\/p>\n Boom or bust?<\/h4>\n
Keith Noronha of Reynolds UK has witnessed many a peak and trough. Here\u2019s his take on the future\u2026<\/strong><\/p>\n\u201cCycling is popular, but I don\u2019t feel the rate of growth can be maintained, so what will happen? Take some of the smaller customers, the custom-builders who we deal with.<\/p>\n
\u201cThey might deal with 100 sets a year, but are having to order way ahead of normal, so they\u2019re asking for, say, 50 sets of steel tubing far ahead of selling the bike.<\/p>\n
\u201cThat\u2019s a lot of capital for them to find. It could be a risk. Then again, there\u2019s a benefit to smaller companies who are agile and forge an array of supply lines. That\u2019ll be a good foundation on which to grow.<\/p>\n
\u201cFor us, it\u2019s a real change in behaviour that some customers are placing orders for 2023 when, in the past, we rarely had orders three or four months ahead.<\/p>\n
\u201cUltimately, the companies who are resilient and flexible are the ones who\u2019ll be best placed to flourish once things hopefully settle down in 2023.\u201d<\/p>\n
<\/p><\/div> <\/section>
Ratcliff and many of his contemporaries have followed suit by, if not fully avoiding sourcing from the EU, at least minimising their imports. This places further strain on the chain, which isn\u2019t confined to bikes and components.<\/p>\n
Steve Joughin is the founder of customised apparel outfit Pro Vision Clothing, based in Stoke-on-Trent. For cycling historians, Joughin\u2019s also the winner of just about every amateur race held in Great Britain and was twice a professional road-race champion.<\/p>\n
While online retailers flourished during the peak of Covid, Joughin\u2019s customised offering faltered.<\/p>\n
With no organised events or charity rides, few wanted bespoke branded clothing. Material delivery from Italy also arrived at a snail\u2019s pace, albeit this wasn\u2019t the greatest concern due to lack of orders.<\/p>\n
Thankfully, with events back on the calendar, the company enjoyed arguably the strongest January in its 26 years.<\/p>\n
Throw in a thriving corporate side \u2013 \u201cOne of our biggest clients is Waterworld,\u201d says Joughin \u2013 and the future\u2019s looking rosier. Well, it would without the thorn in its side.<\/p>\n
\u201cOur problems are more Brexit-related now,\u201d the Isle of Man-born 62-year-old tells us. \u201cIn fact, it\u2019s done as much damage to us as the pandemic. There are constant problems with getting hold of products due to custom and border controls.<\/p>\n
![\"""\"]( "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div> Shortages and supply issues continue to afflict the bike industry, but when will things return to normal?<\/span><\/figcaption> Joe Waldron \/ Our Media<\/i><\/span><\/div>\n\u201cTake these damn administration codes. You might be one digit out and instead of waiting seven days for 200 pieces of kit to arrive, you\u2019re waiting two months. All because of one digit.\u201d<\/p>\n
Joughin also bemoans a courier company he used who took out tariffs from the company\u2019s account. \u201cIt turned out this was incorrect. We\u2019ve obviously changed couriers, but are still waiting for a five-figure sum to be returned. We\u2019re awaiting money back from HMRC, too. That puts pressure on any business.\u201d<\/p>\n
With the government\u2019s inability to secure the trade deals it trumpeted when on the campaign trail in 2016, you suspect the impact of Brexit will be felt long after the Covid-fuelled issues that have affected every facet of the bike industry, from gravel bikes<\/a> to electric bikes<\/a> (Bosch has had problems supplying batteries, for example), clothing and helmets.<\/p>\nThe current situation is a perfect storm of huge demand, restricted supply, rising prices and an increasing number of suppliers. For the consumer, that means significant delays; for the industry, stress and uncertainty.<\/p>\n
![\"""\"](\""https:\/\/images.immediate.co.uk\/production\/volatile\/sites\/21\/2022\/06\/The-waiting-game-03-ef318a2.jpg?quality=90&resize=619%2C413"\" "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div>It\u2019s that enforced rationing that\u2019s leaving the likes of Ratcliff unsated.<\/p>\n
\u201cWhat\u2019s happening is distributors are being forced to drip-ship, say, groupsets to shops and bike builders like us, who have materials for frames. So, instead of a full groupset, we might receive a chain or crankset.<\/p>\n
\u201cI can see why they\u2019re being forced into this situation, but it means we might end up having 47 left-hand shifters piled up next to five right-hand shifters. That doesn\u2019t really help, especially when you pay for the stock up-front.\u201d<\/p>\n
Warehousing stock, says Ratcliff, results in a cascade of further costs from increased storage space and cranking up of insurance premiums.<\/p>\n
This is at odds with the traditional \u2018just-in-time\u2019 production model, also known as lean manufacturing or lean production, where the focus is on producing exactly what\u2019s needed when the customer wants it.<\/p>\n
This reduces capital tied up in stock, as well as minimising waiting times and preventing over-production.<\/p>\n
This build-up of product is a security risk, too, both in the warehouse and in transit, as highlighted by a recent incident in the Czech Republic where the country\u2019s largest bike maker, Fun Bike International, had the equivalent of 10,000 bicycles\u2019 worth of OEM (Original Equipment Manufacturer) finishing kit stolen en route to the assembly plant.<\/p>\n
A truck driver transporting components from Germany was gassed to sleep in a parking lot by criminals, who then drove off with the Shimano stock.<\/p>\n
Madison, like its fellow distributors, remains hamstrung by supply issues, exacerbated by a host of new openings, in particular workshop-only outfits.<\/p>\n
\u201cThey would have joined the back of a stretched-out queue, exacerbating the order books being distorted,\u201d says Mark Sutton, editor of Cycling Industry News<\/em>.<\/p>\n The hopeful ironing out of these supply issues will come too late for some. Geoffrey Butler Cycles closed down in February 2021 after 40 years of business while, more recently, Bowman Cycles entered liquidation after what founder Neil Webb called an \u201cabsolute clusterf**k\u201d of delays all the way up the supply chain.<\/p>\n Even biking behemoths such as Halfords have taken a hit: it recently revealed plans to buy and sell second-hand bikes in a move to bypass shortages and shipping distribution, suggesting customer delays could continue for some time yet.<\/p>\n Inevitably, cashflow is an increasing concern for many cycling businesses, especially smaller outfits that don\u2019t carry the same weight as bigger companies when it comes to investment or obtaining loans.<\/p>\n And, of course, if you can source funds to cover your shortfall, at some point you need to start paying them back. \u201cWe all took out significant loans during the pandemic and now we\u2019re having to do just that,\u201d says Ratcliff.<\/p>\n \u201cWe\u2019re not out of the woods yet and won\u2019t be till sometime next year. I predict it\u2019ll be 12 to 18 months before the dust starts to settle.\u201d<\/p>\n While Darwin said only the fittest would survive, in the bike industry it\u2019s seemingly the most flexible who\u2019ll ride through the current storm.<\/p>\n According to the Cycling Industry News 2022 Market Report, 51 per cent of independent bike shops adjusted their main wholesale suppliers in the wake of shortages, looking further afield and to untested sources to fill gaps; 43 per cent went even further, taking it upon themselves to source goods directly to fill supply gaps.<\/p>\n The problem with this approach is that buying parts from retailers instead of distributors cuts profit margins, heightening those cashflow issues.<\/p>\n Throw in factors such as freight costs, which in some cases have reportedly tripled, and, if the bike business survives, inevitably the customer will see further cost increases.<\/p>\n Brexit\u2019s trade ripples continue to flood the industry with doubt, uncertainty and expense. \u201cThe problem is it\u2019s hard to unpick which one\u2019s having the greatest negative impact \u2013 Covid or Brexit,\u201d says Keith Noronha, managing director at Reynolds Technology.<\/p>\n The iconic brand, which has enjoyed a renaissance in recent times with the likes of high-tech 953 steel tubing, suffered from staff isolation and Covid-fuelled freight increases but, for the most part, remained resilient when it came to sourcing material.<\/p>\n Covid was a pandemic no-one could have predicted and its repercussions will be felt for a while yet. When it comes to Brexit, however, the seemingly self-inflicted trade wounds lead Noronha to laugh a derisory laugh.<\/p>\n \u201cWe sell so much into the EU, so you can probably guess we\u2019re not fans. As a global UK business, we export to countries like the US, China and Taiwan.<\/p>\n \u201cBrexit\u2019s brought the same hassle factor for exporting into the EU as to these places. There\u2019s extra costs and paperwork, and it\u2019s often a two-way thing. We might ship steel out to an Italian frame builder, who\u2019ll work with the metal and then send it as a built-up bike back to a UK customer.\u201d<\/p>\n \u201cThat\u2019s additional friction both ways. I know from a supplier\u2019s point of view that you could easily add an extra \u00a3100 of administration costs onto an invoice of \u00a3200 to \u00a3300. It\u2019s why I\u2019ll tend to find someone local.\u201d<\/p>\n Keith Noronha of Reynolds UK has witnessed many a peak and trough. Here\u2019s his take on the future\u2026<\/strong><\/p>\n \u201cCycling is popular, but I don\u2019t feel the rate of growth can be maintained, so what will happen? Take some of the smaller customers, the custom-builders who we deal with.<\/p>\n \u201cThey might deal with 100 sets a year, but are having to order way ahead of normal, so they\u2019re asking for, say, 50 sets of steel tubing far ahead of selling the bike.<\/p>\n \u201cThat\u2019s a lot of capital for them to find. It could be a risk. Then again, there\u2019s a benefit to smaller companies who are agile and forge an array of supply lines. That\u2019ll be a good foundation on which to grow.<\/p>\n \u201cFor us, it\u2019s a real change in behaviour that some customers are placing orders for 2023 when, in the past, we rarely had orders three or four months ahead.<\/p>\n \u201cUltimately, the companies who are resilient and flexible are the ones who\u2019ll be best placed to flourish once things hopefully settle down in 2023.\u201d<\/p>\n <\/p><\/div> <\/section> Ratcliff and many of his contemporaries have followed suit by, if not fully avoiding sourcing from the EU, at least minimising their imports. This places further strain on the chain, which isn\u2019t confined to bikes and components.<\/p>\n Steve Joughin is the founder of customised apparel outfit Pro Vision Clothing, based in Stoke-on-Trent. For cycling historians, Joughin\u2019s also the winner of just about every amateur race held in Great Britain and was twice a professional road-race champion.<\/p>\n While online retailers flourished during the peak of Covid, Joughin\u2019s customised offering faltered.<\/p>\n With no organised events or charity rides, few wanted bespoke branded clothing. Material delivery from Italy also arrived at a snail\u2019s pace, albeit this wasn\u2019t the greatest concern due to lack of orders.<\/p>\n Thankfully, with events back on the calendar, the company enjoyed arguably the strongest January in its 26 years.<\/p>\n Throw in a thriving corporate side \u2013 \u201cOne of our biggest clients is Waterworld,\u201d says Joughin \u2013 and the future\u2019s looking rosier. Well, it would without the thorn in its side.<\/p>\n \u201cOur problems are more Brexit-related now,\u201d the Isle of Man-born 62-year-old tells us. \u201cIn fact, it\u2019s done as much damage to us as the pandemic. There are constant problems with getting hold of products due to custom and border controls.<\/p>\n \u201cTake these damn administration codes. You might be one digit out and instead of waiting seven days for 200 pieces of kit to arrive, you\u2019re waiting two months. All because of one digit.\u201d<\/p>\n Joughin also bemoans a courier company he used who took out tariffs from the company\u2019s account. \u201cIt turned out this was incorrect. We\u2019ve obviously changed couriers, but are still waiting for a five-figure sum to be returned. We\u2019re awaiting money back from HMRC, too. That puts pressure on any business.\u201d<\/p>\n With the government\u2019s inability to secure the trade deals it trumpeted when on the campaign trail in 2016, you suspect the impact of Brexit will be felt long after the Covid-fuelled issues that have affected every facet of the bike industry, from gravel bikes<\/a> to electric bikes<\/a> (Bosch has had problems supplying batteries, for example), clothing and helmets.<\/p>\n The current situation is a perfect storm of huge demand, restricted supply, rising prices and an increasing number of suppliers. For the consumer, that means significant delays; for the industry, stress and uncertainty.<\/p>\n![\"""\"](\""https:\/\/images.immediate.co.uk\/production\/volatile\/sites\/21\/2022\/06\/The-waiting-game-07-e504db7.jpg?quality=90&resize=619%2C413"\" "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div>The long-term albatross<\/h2>\n
![\"""\"](\""https:\/\/images.immediate.co.uk\/production\/volatile\/sites\/21\/2022\/06\/The-waiting-game-02-871b0b5.jpg?quality=90&resize=619%2C413"\" "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div>Boom or bust?<\/h4>\n
![\"""\"](\""https:\/\/images.immediate.co.uk\/production\/volatile\/sites\/21\/2022\/06\/The-waiting-game-05-faeb172.jpg?quality=90&resize=619%2C413"\" "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div>
![\"""\"](\""https:\/\/images.immediate.co.uk\/production\/volatile\/sites\/21\/2022\/06\/The-waiting-game-04-45c0e02.jpg?quality=90&resize=619%2C413"\" "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div>![\"""\"](\""https:\/\/images.immediate.co.uk\/production\/volatile\/sites\/21\/2022\/06\/The-waiting-game-06-c1c56a6.jpg?quality=90&resize=619%2C413"\" "\\"\"\"\\"\/")
<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div>