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Pandemic Effects

Pandemic Effects on Bicycle Availability

If you have been shopping for a bike lately you will have noticed that there are not very many bikes available.  The bikes that are available are typically high dollar or electric assist bikes starting around $3000.  This little article is to help the customer understand the reason for this situation.  We have to go back to March and April of 2020.  At that time the government was prescribing that all unessential businesses shut down and people should not congregate together.  Remember those days.  The weather was getting nice and people were off work; in many cases still getting paid and they had a lot of spare time on their hands.  Gyms were shut down and people wanted to get active.  Outdoors seemed like a good place to do this.  People could go out and avoid being in crowds.  It was only natural that people who didn't have a bike would now decide that cycling was a good alternative to staying home all day.  For Olde Towne Bicycles the year started normally, but in late April and May the demand for bikes skyrocketed.  In a matter of a couple weeks in May we sold out of almost all the bikes we had in stock.  At the same time we started ordering bikes from our dealers.  However this run on bikes was occurring all over the country.  The dealers were also running out of bikes.  At the same time all the manufacturing for bikes was at a halt due to factories being shutdown due to the pandemic.  Each year bicycle manufacturers determine the number of bikes that they will sell each year.  For 2020 those numbers were decided before the pandemic started and production was set accordingly.  Our dealers sold out of inventory that was supposed to last 9-10 months in less than 2 months.  From June 2020 to the present time they have been trying to catch up with the demand.  

Why can't they catch up?  The parts manufacturers, Shimano, Sram, and others still are faced with reduced manufacturing capacities.  Many countries where these parts are made are still facing factory shut downs and labor shortages.  Then there are shipping issues.  Just about all bicycles and the parts used to make them come from Asia.  Before the pandemic, a shipping container (those big rectangular boxes that are loaded on to ships by the thousands) would cost a manufacturer $2000 to lease for the trip across the ocean.  A bike manufacturer could usually put around 500 bikes into one of these containers.  Since the pandemic started the cost of a container has risen to as high as $20,000.  This has made it economically hard to ship the lesser expensive bikes over the ocean.  There is also a back up at ports of entry into the US.  Ships are stacked up at ports for sometimes weeks waiting to be unloaded due to labor  shortage at the docks and increased imports due to high demand.  There also is a shortage of the shipping containers as the number of empty containers shrinks due to all the full containers sitting waiting to be unloaded.    Also since most of the manufactured goods in the US come from overseas, we have an imbalance of trade.  There is more coming into the country than being shipped out.  Nobody wants to pay to ship an empty container back to Asia.  So they have to wait until it is needed for shipping merchandise before it makes its way back across the ocean.  

We have been informed by our dealers that they don't expect to be back to normal stock levels for bikes until late in 2022.  I know this seems hard to understand.  I know as a bike dealer it is difficult to turn away 75% of the customers that come into the store wanting to spend money on a bike only to be turned away because we don't have a bike to sell them. 

I hope this will give you some idea of the dynamics that are happening across many of the outdoor industries.  I am sure this is not just a bicycle problem.  So now you won't be surprised when you come into the shop and see all our empty bike racks.

Olde Towne Bicycles