Bicycle Supply Chain Update

It's been a while since we posted an update on our blog and we thought we'd dust things off with a quick update about the supply chain mess that everyone is hearing about. Originally supply chain delays were a result of factories shutting down in Asia because of COVID. They eventually reopened but there were spikes in demand for certain products like bicycles that caught the factories off guard and they struggled to keep up with demand. The lead time for tires went from 60 days to 300 days. The lead time for drive train parts were extended out more than a year... This caused lead times to grow substantially for a finished bicycle and of course the costs went up just as much as the factories took advantage of the spike in demand.

The good news is that the lead times for some of these parts are starting to go down and production overseas is picking up the pace. This however has lead to a new issue. As factories crank out products, they have to be shipped to foreign ports. In the case of our bikes, we manufacture them in China where they ship from a port and then are routed to Korea, Los Angeles, Chicago by rail and then Milwaukee by truck. Before you start to say we should make them here in the US, we agree but there are currently no factories for all of the small components that go into making a bicycle. And if there were, there are no workers to work at these potential factories. It's simple to sit there on your iPhone/computer, chair and clothing that are all made overseas and say that we should make our bikes here in the US, but the story is more complicated than that.

Every step of this supply chain right now is clogged. Pictures of boats docked outside the West Coast ports are common right now and everyone thinks that is the reason for the bottlenecks and by simply saying we'll fix the ports that will help the problem, but that is not the only issue right now. The ports are part of the problem, but once the vessels dock and the items are eventually unloaded, they need to be loaded onto a truck chassis to be shipped to a warehouse or they are loaded onto a train to be shipped to an inland railyard like Chicago for example. Right now there is shortage of drivers to deliver the goods, trains to ship the goods and truck chassis' to physically truck the container to its final destination.

We recently had a shipment leave Asia on 6/24 and it is just being delivered to our warehouse in Milwaukee today - 10/20. That is almost 4 months in transit. And oh by the way, we ordered these items in September 2020. This shipment sailed from China to Korea where it sat at port for 45 days. Once loaded onto a new vessel it arrived in Los Angeles and sat for 30 days. It was finally loaded onto a train and arrived in Chicago on 9/15 where it sat for over 30 days to finally get delivered to Milwaukee.

The reason for the delay is that there is a truck chassis shortage in the US right now. Tariffs were added to imported chassis' a few years back and there hasn't been enough domestic production so instead of the tariffs actually working as some people think they might, there is now a shortage and people can't get their stuff. Fun.

We'll wrap this up saying that hopefully things will get better in the next few months but most analysts and people in the know, say it's going to be here for a while. We have a lot of bikes on the way and even more on order so I think we'll be able to ride this out. In the meantime, please be patient with companies like us and even your UPS guy. We are trying our best but these things are out of our control.