Until recently, Vietnam was one of the nations that was least affected by the Covid-19 pandemic. The country had a swift, effective response to the virus and essentially wiped the virus clean from the country using social distancing, mask mandates, diligent contact tracing, and aggressive quarantine rules. Those strategies, which rely largely on public participation at the individual level, were effective until the Covid burnout combined with the Delta variant in a perfect storm that has dealt a heavy blow to a country that once had one of the world’s best Covid containment records.
The total number of cases since the start of the pandemic jumped from just a few thousand early this year to now more than 480,000, with more than 12,000 deaths so far. A new round of lockdowns, particularly in southern Vietnam, will hopefully help curb the virus spread, but will also have devastating ripple effects for the Vietnamese people as well as many industries across the globe.
This is, first of all, a human health crisis, and the foremost concern is and should be for the safety and wellbeing of the Vietnamese people. Still, we can also see that our industry is being hit quite hard and we can anticipate tough ongoing effects going forward.
Several high-end bike companies source most of their carbon bikes in Vietnam. Ibis, Rocky Mountain, Evil, Revel, Specialized, and Intense all confirmed that they rely on Vietnamese carbon, particularly from one distributor that makes carbon parts in the southern part of Vietnam, where the pandemic is hitting the hardest and where the factories have shut down. Other brands, too, source bikes from the same region, but declined to comment. The brands that only make carbon bikes, rather than a diversified line of carbon and aluminum, are the most impacted.
With bike sales through the roof since the start of the pandemic, many bike brands have been ramping up their production, hiring new workers, and expanding what they do. Now that there's suddenly no revenue flow and perhaps no revenue for the foreseeable future for those brands that only work with carbon, the business side of things looks grim.
Even when Vietnam had Covid in check, the factories were working at maximum capacity to churn out carbon bikes to catch up with the 2020 spike in demand. (Never mind finding components. That’s a whole ‘nother tall task.) Now, with case numbers climbing rapidly and the country's vaccination rate still at less than 3%, the future is uncertain. A representative from one company affected said the company was essentially planning what to do without any carbon bikes arriving through the rest of the year.
Here’s what the brands had to say about this new sticking point:Evil
Jason Moeschler, COO at Evil Bikes, said that he couldn’t disclose how much of Evil’s manufacturing happens in Vietnam, but said that many frames pre-booked for 2021 are delayed. Real lead times, he said, have not existed in 2021. “The honest lead time disappeared around August of 2020 when the entire globe shifted spending habits and flooded factories with unrealistic expectations,” he explained, and Evil doesn’t know when production and delivery will return to even remotely normal.
Even when the factories reopen, bike delivery times will remain uncertain for a variety of reasons that Moeschler listed:1. Not all workers returned after the shutdowns. So there will be re-hiring and re-training.
2. The factory will likely open with government restrictions requiring more space between workers, alternating smaller shifts, etc. Though the factory will re-open, by no means will it be at 100% capacity.
3. While the factory was closed, shipments of goods into the factory were delayed and either held at origin or stored at the Vietnam port until re-opening. Re-starting the raw material delivery process takes time.
4. During the factory shutdown, some raw materials experienced their own round of delays at origin. These delays were not communicated during the shutdown and will cause a re-working of the delivery schedule.
5. Severely constrained shipping ports and the shortage of air traffic are both causing significant unquantifiable delays to every step of the supply chain.
It’s clear that brands are in a tough spot and are doing what they can to keep their companies afloat and bring bikes to the people. RevelRocky Mountain
Rocky Mountain is upfront about that a fair amount of its manufacturing happens in Vietnam, described as a hotbed for carbon manufacturing right now. Since the shutdown has been extended a handful of times now since it began in July, each time for two weeks, it's nearly impossible for the brand to predict when the bikes will start coming in again.
Chief Product Officer Alex Cogger said Rocky is in the midst of planning 2023 bikes and things were looking okay for the delivery schedules of 2022 bikes, but the shutdown has changed that. Now, Cogger said, “there’s a good chance there are going to be some delays for 2022s. The volume of that production will get pushed later into the year.”
Carbon bikes are the heart of what Rocky Mountain does, so the brand can’t afford to not sell those bikes in the long term. Still, thanks to the brand’s alloy bikes and relatively long and successful history, the brand will figure out how to make it work in the short term. “We’ve made plans for these eventualities, but it’s not going to be fun,” Cogger said. When asked about the likelihood of companies going defunct over this, he continued, “I’m stunned we haven’t heard more at this point about brands having severe financial difficulties or being acquired. I can’t believe we haven’t heard it yet. I’m sure there are a lot of backroom conversations going on right now, but I’m just surprised we haven’t heard anything yet.” Small companies are hit the hardest, he said, especially those that haven’t been in the industry long enough to understand how to plan ahead and weather the road bumps.IbisSpecialized
All of this adds another layer to an already complicated picture. Even if every part needed to make a bike is technically available, brands run into problems when, say, one brand’s frames are available, another brand is able to source rims, another has handlebars, and another has all the stems. What happens then? Even if a company has 99% of its bike parts in stock, it still can’t sell complete bikes. And if there are no frames coming in, the brand can’t sell frames alone either. It's bad all around.
We hope for the workers’ sake that the pandemic slows down soon. Then, once folks are safe and able to support their families, we can see about getting our bikes. No matter what happens, the effects of this pandemic will continue to be felt far away and close to home for a long time to come. Hug your loved ones, respect your local Covid guidance, and have some patience for the bike delays.