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.
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.
Additional responses from companies will be added to this article.