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

What’s going on with extra COVID-19 unemployment benefits?

It’s been weeks since President Donald Trump signed an executive memorandum that was supposed to get the federal government back into the business of topping up unemployment benefits, to $400 a week. Few states, however, are currently paying even part of the benefit that the president promised. And, it looks like, in most states, the maximum additional benefit unemployment recipients will be able to get is $300.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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