Bike shortage is a tale of changed lives and disrupted supply chains
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The pandemic has rearranged so many parts of this economy it’s hard to keep up. But we can add one more: bikes. There is a national — international, even — bike shortage. It’s been going on for months and will continue to go on for months.
It says a lot about how many of us are coping with pandemic reality, and says a lot about supply chains too.
If you have been to a bike store recently, you’ve probably seen some disappointed people.
“I’m here at the bike shop looking for a bike, but it doesn’t look like I’m finding one,” said Jonathan Bermudez. He’s at Al’s Cycle Solutions in Hell’s Kitchen, Manhattan. This is the third bike shop he’s been to this day.
“Everywhere I look, they don’t have what I needed,” Bermudez said. “I’m feeling a little frustrated.”
Also frustrated is Alain Guillerme, the owner of Al’s Cycle Solutions.
“I don’t have any more bikes — period,” he said. “You can see all my racks are empty. [The] problem is I don’t have enough supply to make money right now.”
Bike theft is 18% higher year to date in New York. Theft of bikes worth $1,000 or more is up 53%, which of course in turn fuels more demand. The shortage is international and started in January, when the coronavirus shut down factories in East Asia, the center of the bike industry’s supply chain. Eric Bjorling is director of brand at Trek Bicycles, a U.S. bike manufacturer.
“When those countries shut down and those factories shut down, there were just no bikes being made industrywide,” he said. “Those are the bikes that are supposed to arrive in April, May, June, July.”
And while a supply shortage was brewing, demand was about to explode. It started when everybody was stuck at home with their kids and decided to get them bikes.
“March, April, May — the bikes that are all going are kids’ bikes,” Bjorling said.
Then the adults got bored.
“Then you had your entry-level hybrids and mountain bikes,” he continued. “Now those are bikes that are used for family bike rides on trails and paths.”
And you had your commuters who didn’t want to be stuck in buses or subway cars.
“As public transit was viewed in a different light, so was the bicycle. And we saw an explosion of commuters,” Bjorling said.
So why then couldn’t bike factories just … you know … make more bikes?
“The industry wasn’t running with lots of spare capacity to start with,” said Chris Rogers, the supply chain analyst at S&P Global Market Intelligence.
“What the industry doesn’t want to do is double its capacity to meet the increased demand,” Rogers said, “and then we turn round in the winter or next year when everyone’s got a bike and suddenly you’re left with a factory that’s too big and machinery or staff that aren’t being used anymore.”
Rogers said the bike industry’s troubles are emblematic of a lot of industries right now, trying to tame wild fluctuations in supply and demand. But as far as bikes go, he said they’re coming, they’re just coming late. The next flush of entry-level bikes and parts will probably get here around September or October.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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