Canyon & Orange Comment on Delays Caused by Blocked Suez Canal
At least we're getting jokes out of this one.
Because there's an enormous ship blocking one of the most essential global trade arteries, we reached out to some major European bike brands to ask if and how this may further affect the current global bike parts shortage. It turns out that yes, your new bike very well might be on the Ever Given or on one of the 150+ ships now stuck in a holding pattern at the Suez Canal. So far, both Canyon and Orange have acknowledged that the Suez blockage could have ripple effects for bike companies. And those are just the two we've heard from. It's safe to say that they're not alone, and we will update this article with information from other companies when we hear more.
Canyon Bikes
Have you had any shipments delayed as a result of the blockage?
Yes, one of our shipments is loaded on the “Ever Given” and there are several shipments blocked on vessels which cannot pass the Suez canal. This will cause a delayed ETD in Rotterdam and will lead to a bottleneck in the harbour. Currently they have no ships to unload. In a couple of days the ships have to wait in another queue in front of the kai. If the Ever Given cannot be removed out of the channel, all ships have to take the way around Africa. That will cause delays which are even more that painful in the current situation. We are also concerned about the bullwhip effects. The shipping schedules are disturbed. Ships cannot return to Asia in time. Containers are blocked longer than expected. Shipping capacity and container shortage are already a big issue. The situation will become worse in a couple of weeks.
What parts are in short supply for you right now?
In general: Almost all parts are causing trouble. But we are on it to find the best possible solution for our customers. Concretely on the Evergreen situation: We are still checking the impact. Currently it is not clear when we will receive the parts from the Ever Given and the parts of the other ships waiting in the channel. We are working with different scenarios and try to catch up by pulling ahead the next shipment. Due to the high demand in the factories in Asia we can only catch up by switching to AIR cargo.
What parts and materials do you have shipped from Asia?
Many parts are coming from Asia: Shimano, SRAM, Fox… many suppliers are based in Asia.
How often do you get new shipments from Asia?
Shipments from Asia arrive daily at our assembly sites, can be multiple shipments per day. We receive FCL & LCL shipments (FCL = Full Container Load, LCL = Less than Container Load).
What would it mean for Canyon if the canal stays blocked for the next few weeks?
The longer transport times (if the vessels have to take the longer route – Cape of Good Hope) will affect the material availability at our assembly sites – which is not that great anyway atm – and lead to reduced production outputs and finally delayed customer deliveries. We also have to deal with higher cost, especially when we – as an alternative – we need to switch to other transport modes (air, rail/road). If availability would be okay – probably not – it could occur that we have to reorder parts if the canal will be blocked for weeks. Plus, as mentioned above, we need to think of the bullwhip effect.
Would you need to increase bike prices if bike parts become even harder to get?
Canyon is about “democratizing performance”, so the value proposition we provide is core to the brand. That’s de facto a direct order to continue to do everything possible to address the current challenges in getting needed raw materials to keep our delivery promises to our customers, while minimizing any adjustments to pricing – even if our costs are raising.
Orange Bikes
 | Fortunately, we don’t have any goods on the blocked vessel currently in the Suez Canal. We do however, have circa 1000 bikes heading in that direction so if the canal stays blocked for much longer then we will be heading for delays. What this means is that essentially some of our customers are going to be without those particular bikes for as long as the canal is blocked. We have regular shipments of both bikes and bike parts from the Far East so providing the issue is cleared up in a reasonable amount of time, our business shouldn’t be affected too much. Our UK factory can still continue to manufacture frames and we have a sufficient amount of parts in stock to continue building bikes so while some customers will see delays, others will continue to see their orders fulfilled in a reasonable time. It’s important that we can continue to update our customers on the progress of their orders. In turn, their understanding on the matter is greatly appreciated. |
Additional responses from companies will be added to this article.
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It is big problem,it could take several months to clear Suez if the ship is damaged. Now best chance is chop the stuck parts and pull the ship away.
It is almost impossible to get a ship stuck like that,it must be a big chain of fails.
Well first of all, it isn’t so easily disrupted. This was a rare and catastrophic series of unfortunate events, leading to an unprecedented and extremely costly supply-chain disruption.
Secondly, I’m not sure how easy you think it is to just build a “redundant” route for super tankers. These ships draw massive amounts of water and need very deep harbors/shipping lanes. There’s a reason there are very few passages across continents. For decades there has been a push to build a second lane through lake Nicaragua, which fortunately hasn’t happened—it would have devastating ecological consequences, and would likely not benefit the Nicaraguan people. So for now, certain key shipping lanes get bottlenecked in fairly tight passages that are typically a combination of naturally occurring geography with some man-made improvements/changes (typically dredging) to accommodate these massive ships. In other words, tl/dr; “redundancy” is easier said than done.
As for estimating cost, I was actually very surprised to find out how relatively inexpensive the proposed cost of the Nicaragua project is (in 2014, this article suggests they estimated the cost to be $40 billion): www.smithsonianmag.com/science-nature/new-canal-through-central-america-could-have-devastating-consequences-180953394
I have no idea where exactly you're imagining a redundant route for the Suez Canal to exist, but assuming you're thinking it would flow roughly in parallel, I'm not sure there are really any comparable projects to estimate a cost from—the distance is at least 100 miles (160km) by land, which is somewhat longer than the land route necessary to be dug if the Nicaraguan canal were to have gone forward. This is all pure speculation on my part, but I'm assuming the $40 billion number was an underestimate of what the true cost would have been (these mega projects almost always seem to go over budget), and since that article was written in 2014, this figure would be higher in todays dollars either way.
But even at $100-200 billion, it would seem like it would make a lot of sense given that I've seen estimates ranging from $5-10 billion per day in trade disruption (I doubt those figures accurately capture the full extent of disruption further down the supply chain either). So while this is all based on pure speculation, you've got the armchair civil engineer and global industrialist in me is convinced.
Joking aside, I wonder what security is like on the suez and Panama, this seems like a great way to cripple countries with economic terrorism
Ralph Wigham voice
"I'm helping!"
Slowly, over the course of a few seasons, that $25 t-shirt magically changed into $60 t-shirts
$80 footwear slowly turned into $180 footwear
Complete bikes that used to cost $2k are now a $2k frame-only
This industry hasn't struggled since the 90's. It's a golden goose now. Don't believe the hype.
How about the profit margin for an aluminium frame?
Where are your assumptions that huge profit margins are being made?
Issues with global shipping lanes, such as this one with the EVER GIVEN, send ripples across the bike world.... not just through big OEM's with offshore assembly plants. The global marketplace is deeply interconnected, soup-to-nuts, and that isn't changing anytime soon. As wholesome as many of these nationalistic comments are, they are antiquated and puritanical. We need true progressive thought when it comes to making REAL global supply chain improvements and multilateral trade regulations.
Also, North America and EU/UK aren't victims to an evil far-east economic empire; its time we all accept that the most developed nations in the world willingly turned blind eyes to human rights abuses and political corruptness in order to maximize their profits at home. China didn't take our jobs, our corporations sold them off to the lowest bidder, and it put rocket boosters on their profits (and brought us value previously unseen). They were directly empowered to do so through WCO/WTO trade regulation changes they lobbied for.
The global supply chain is an absolute marvel, unseen by human history. Bicycles are a perfect finished product to analyze its sheer robustness and velocity. But issues like this expose it's fragility, which can only be addressed through bold, forward thinking changes that are properly scaled for the future.
/rant
I understand your sentiment and I do agree that importers need to be more diverse in their supply chains, but its not that simple. What you are describing is supply chain diversity, not independence. The pandemic, along with 232/301 Tariffs in the US really helped speed up that process of getting manufacturing out of China and having more agile chains of inputs. But what does that actually mean? Companies are now moving manufacturing to Vietnam, Cambodia, Malaysia, etc for the same reasons they turned to China decades ago.
The big OEs are producing millions of units a year, respectively, for markets all over the world. How many bikes does GG produce a year? a few thousand? The scale of production is something you cant just disregard for the sake of comparison.
Also, companies like Merida, Trek, etc have subsidiaries in many countries, including China.... how do you domesticate and insulate your production when you have HQs and a dealer base in over a dozen countries?
There are no perfect answers, obviously, but I think its a worthwhile topic of discussion that more people should have fluency in.
It is a complex problem that has taken decades to create. Because of government policies in 2000, 2001, all the medication manufacturing went to China in a couple years. That is insane. Now the US is totally dependent on China for medications. Not good if they decide to leverage that power.
- Richard Hammond
Shame we can't be independent instead of being dependant on Asia. World trade is great for the stock brokers. In fact some players will reap huge profits from this traffic jam and some people will fail.
As for people's toys and material stuff getting here late. I don't care. I care about the environment and the general state of people's health but the economy? Very low on my list of concern s.
Weve been paying extra ever since
Abandoning the Suez Canal seems like a little bit of hyperbole!
Couldn't they attach 1000TON winches to the stern and bow from opposing shores and just pull the thing straight?
I hear all this about fear of loading the bow/stern too heavy and creating a crack in the center of the hull.
But the shores are sloped..pulling the stern/bow to center would continually lower the pressure on the bow/stern..
The conspiracy theorist in me is sure curious.
Now imagine 45 feet of earth and a boat that weighs the same as 200,000 cars.
I read somewhere that it would take literally hundreds of our strongest tugboats to get this thing dislodged in it's current state.
So you are saying 40km winds on the side of a boat is more powerful than "hundreds of our strongest tugboats" since that is the force that semi beached it you can assume the same force needed to unbeach it..
There is currently no structural damage to the boat from self beaching.. why would you assume it would be damaged reversing the trajectory it made to beach itself?
Here’s an experiment your can try at home. Push your car using your hands into a snow bank or pile of sand. Give yourself distance to get the car up to a walking speed. Now try to push it out.
Now try this with a 400million pound ship that’s moving 8MPH. Good luck!
As for unloading and/or lightening, that also brings challenges. There are apparently very few maritime cranes with the necessary height to offload containers from this type of ship. Getting one to Egypt doesn't happen overnight.
The experts need a full survey of the sea bottom at the site, full schematics of the ship structure and packing, computer simulations to determine forces on the ship during various lightening scenarios, etc. There is real risk of capsizing the vehicle during attempts offload or move it. I saw descriptions of scenarios where the ship could roll over (it is very top heavy), or how the hull could fail, etc.
The idea that there is some lone backhoe driver trying to fix this situation is utter BS. There are highly sophisticated maritime salvage firms working w/ expert engineers to identify and implement an optimal sequence of operations to get this thing moving again.
I just have a lot of questions that I dont see answered by the explanation given for why its taking so long.
-how is balance an issue when 90% of the boat is floating and the area that is beached is only a very partial beaching with most of the mass still being held by its buoyancy? Would digging out the boat in any way actually cause an uneven load that could possibly capsize the ship when so little of it is beached? I can easily see how if a much larger amount of the boat was beached it could cause an uneven load to this top heavy ship. But this seems to be 10% or less of the ship, that has lost a small fraction of its buoyancy... Rather than say 50% of the ship being lifted 50% out of its buoyancy which would be very dangerous.
-Danger to cracking the hull.. Is there any sign or report that the accident created beyond limit loads on the hull? And if not why the worry that digging out would cause catastrophic damage?
“This is definitely not a quick refloat operation,” Sloane, who has participated in at least a hundred salvage operations of ships, aircrafts, oil rigs and pipelines, said in a phone interview from Cape Town. “The worst case is that the ship is presently supported over her bow and stern areas, meaning possible sags in the middle. Those sags could lead to the ship splitting in two, spilling the fuel and cargo . . ."
You can ask all the questions you want. It just seems silly to pose them to mountain bikers, when there are plenty of interviews in articles with people that have led the largest marine salvage efforts in history.
The best chance in the short term is apparently the big tides coming in on Sun/Mon combined with a high volume suction dredger that is now on site. They are hoping they can dislodge the stern and sort of back the bow out.
No broken hull, no capsizing...You worry mongers are ridiculous people. truly.
You get what you pay for starting a comment on this website..
@Inertiaman I was never posing questions to "mountain bikers". I was expressing the questions I have with regards to the headlines I have seen.. and posting them in a news article about this incident which happens to be on a mtb site...
You have put more time into explaining why my questions are ridiculous(they weren't) than me expressing my opinion...Every worry you expressed seems to be bullshit.
- You literally suggested that a pair of 1000 ton winches would easily solve the problem.
- You described it as "slightly beached".
- You asserted that no experts exist to work on these issues.
Contrast that with:
- no winches were used. A flotilla of the worlds most powerful tug boats were used.
- they had to dredge more than 60 feet deep, nearly 1 million cubic feet of sand/mud/rock
- multiple expert marine salvage companies cooperated on the effort
As for your claim that everything I expressed was bullshit, note the last statement from my prior post: "The best chance in the short term is apparently the big tides coming in on Sun/Mon combined with a high volume suction dredger that is now on site. They are hoping they can dislodge the stern and sort of back the bow out." THAT is exactly what happened, not your naive comments that implied all the people working on this were incompetent idiots.
What you label as "worry mongering" is really just thoughtful awareness of the ways the problem could worsen. One of the articles I read described the teams actively measuring hull deflection while they were tugging on it, monitoring it to ensure they didn't introduce problematic stresses. Now the ship must be fully inspected before being declared sea worthy again, because the engineers know that damage is a POSSIBLE result of the stresses on the hull. All of that contradicts the opinions you expressed.
Still don't care..