COVID-19

Bike shortage is a tale of changed lives and disrupted supply chains

Sabri Ben-Achour Aug 20, 2020
Heard on: Marketplace Morning Report
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A person walks with a bike in New York City. The coronavirus pandemic battered bicycle manufacturing but boosted demand. Spencer Platt/Getty Images
COVID-19

Bike shortage is a tale of changed lives and disrupted supply chains

Sabri Ben-Achour Aug 20, 2020
A person walks with a bike in New York City. The coronavirus pandemic battered bicycle manufacturing but boosted demand. Spencer Platt/Getty Images
HTML EMBED:
COPY

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

With a slow vaccine rollout so far, how has the government changed its approach?

On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

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