With each day that passes it seems we are hearing about more businesses that are affected by the perfect storm of COVID and Brexit. We’ve had announcements and updates from Cotic, we’ve also talked about many of the new rules and problems in our Podcast.
Covid Disruption
Covid has disrupted the global manufacturing space with many factories either closed or running at restricted outputs. That coupled with the unprecedented demand for certain markets, including bikes, has lead to an almost chaotic manufacturing sector. Add in to this mix that many businesses are run on a just in time system where orders for components are made at exactly the right time to maintain the stock levels and manufacturing processes as efficiently as possible and it’s no wonder we are looking at lead times on some products that have tripled. Shimano leads times are now being measured in years, such is the demand on supplies.
Brexit self flagellation
Then for us here in the UK there is Brexit that has instantly transformed us from customers to importers of goods. Now there is a trade barrier between us and the EU there is essentially an extra cost for any product that passes through the barrier. That cost is either in the form of extra paperwork, form filling and regulation or actual tariffs and taxes. Whether you are just a punter importing a spare chain from a Dutch online retailer or a UK based distributor bringing in a container load of German bikes, the result is the same – paperwork and price increases. Couple that with chaotic global production and it’s all a right mess.
Today we heard from German custom bike specialists Propain who have the added confusion that results in allowing customers to pick and choose components on their bike builds resulting in a multitude of different ‘products’ that each need to be individually accounted for. The result can be one particular build that attracts a different tariff rate to another when a UK customer imports it in the country. Propain have published this statement outlining as clearly as they can the current situation.
TLDR? prices are going up across the board.
| Statement on the current situation | PROPAIN Bicycles Covid-19 Bike Boom: Lead times, Pricing and Brexit 2020 has likely been the craziest and most unpredictable year the bike industry has ever experienced. The increasing demand for bicycles hit all global markets and is still causing extreme delays in the supply chain worldwide. Making it hard for manufacturers in the bike industry to keep up with their promised delivery dates. How long do I currently need to wait for my bike? Well that´s a hard one to answer. Usually, a complete bike includes up to 40 different components and parts. In our case, due to the unique service we offer with our customization tool on our website, it´s even more difficult to plan and foresee what parts our customers plan to buy. That also means that we are even more dependent on reliable shipments from our suppliers. Currently some delivery times are up to 14 months in the worst cases. As an example, during normal times average delivery time has been around 90 days. When you spec your dream build on our website it shows you an estimated delivery date which we try to communicate as accurate as possible. Each individual component will also be given a date in future. However, it still might be the case that although we are doing our best having the parts for your bike in stock, the delivery date for your bike gets postponed. That´s unfortunate but often it´s not in our hands and we apologize for any inconveniences this might cause. In a case like that, one of our service agents will get in touch with you and offer you different options of how to proceed. Will PROPAIN increase its prices? To be absolutely clear with you, yes. It sounds contradictory increasing prices while selling more bikes than ever before. We are facing highly increased costs for transportation and purchasing and having made big investments into our organisation being able to keep up with the momentum while still providing the best quality products. We remain true to our philosophy offering customization and a various choice of bike models and colours, but we are taking extra efforts to make sure our customers get what they expect when ordering a PROPAIN. I´m based in the UK. What the heck is going on? The good news is, we want to ship into the UK as soon as possible. We are doing our best to provide our service and products to our loyal UK based customers! Since December 31st, the UK is not part of the EU anymore and, out of a customs and trade view, the UK now counts as a third country. That means that you will need to pay custom duties when importing goods from the EU. We currently don´t know which tariff rate you have to expect but we will inform you on our website as soon as we receive this information. We are receiving different information daily and we hope to have this solved during the next two weeks. We apologize for any delays on our shipments to the UK. As soon as we know more details, one of our service agents will contact you and let you know how to proceed. We all at PROPAIN need to ask for your understanding during these unprecedented times. Please be sure that we are working hard and doing everything we can to get back to normal as quickly as possible. See you on the trails! YOUR PROPAIN CREW |
You are an importer now
So remember UK types! We are no longer customers, but importers now. So now to my daily appeal for any good news Brexit stories. Is anyone better off? Are you paperwork free and making hay right now? Surely it can’t be as bad as many experts were saying it would be for months and years previous. We did this to ourselves for a reason… I just need some help to remember what it was. If your life is now better then please get in touch – we need all the good news we can get right now.
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Comments (29)
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In before the “this is good, buy British” crowd 🙂
You just need to believe more Mark. I’ve tried closing my eyes and believing that trade barriers don’t exist but dammit they are still there!
Is this the ‘buy British’ good news story you were looking for…?
https://singletrackworld.com/forum/topic/calibre-bikes-spares/
Trade barriers, shurely shome mishtake. Not possible, our dear leader says there are no trade barriers.
What to believe, fantasy or reality?
Buy a bird
Aside from the working from 5:30am to midnight to stay on top of the covid & brexit business pressures (not all of them bad) I can report that on the plus side:
– Work to britishify our product line is going well.
– My programming skills, which had gotten very rusty have been getting a good polishing up with all the programmatic changes we’re making to accomodate the new EU rules onto our system and offer our EU customers a delivered duty paid price.
– We haven’t stopped shipping to the EU and so far (Touch wood) only one shipment went south, but was sorted (slowly).
– Sales are through the roof since 1 Jan. Even by 2020 covid standards.
OK so none of the above are specifically upsides, but its not all bad.
I assume all the Brexit enthusiasts are stuck in a queue on the M20, or they wouldn’t have gone so quiet.
I’m sure some will be along soon to tell us about all the upsides.
“We did this to ourselves for a reason…”
Nope, not all of us did and some of us are trying really hard not to get upset about it every time another trade, travel, work, funding, study, or research grant issue comes up. I am genuinely saddened by the whole situation.
Spoke to Bird a few weeks ago before ordering. They knew which containers, in which parts of the world, had which components. Great communication and they got my order.
Mr currie, yep my bird AM9 is on track fantastic company and they keep you well informed!!!. Anyone would think you can only get bikes from Germany or were ever in Europe.. Mental!!!.
I have recently purchased an Orange Stage 6 2021 frame, Customer service was excellent, built the bike up with as much British parts I could find in stock.
When I picked up the frame, from the factory(not far away from where I live), they said business was booming and exports were also doing well, Great news for British manufacturers.
I work for a renowned British Gearbox Manufacturer and since Brexit we have won more orders than ever, over 25years worth of orders, so to all those sceptics out there Brexit isn’t all bad
Same here… We are now manufacturing more equipment here in the UK, been looking at a project for 7 years. In light of the current red tape and increased costs its now gone ahead.
I import goods mainly from Europe and the Fat East and there’s a potential bigger issue in the horizon that’s been bubbling for the last 8 weeks or so. For containerised imports there’s a worldwide shortage of empty containers where the factories need them and also many shipping lines are refusing to even come to the UK due to delays in unloading and also inflating the prices for these. 10 weeks ago a 20ft container cost $1000 from
The Far East now it’s $6 – $7000. This in turn is likely to again create shortages and quite heavy price increases… This has never happened in the 25 years I have been importing and makes Brexit look a walk in the park.. Welcome to the new era
Just bout a new HiFi AMP made by Rega in the UK .. since 1973 by a bunch of people paid above minimum wage working and paying their tax in Southend… I could have bought a Mission AMP owned by a Chinese company who bought a brand and moved it all off shore … you reap what etc. etc.
“…We did this to ourselves for a reason… I just need some help to remember what it was.”
I’ll remind you.
It’s because there’s lots of racist bigoted eeejits in Britain (and especially in England) that voted for this because of thier their racism, bigotry and utter stupidity.
I firmly believe people should be allowed to vote in either Britain’s (not) got Talent, or important stuff. But not both.
I think though we have to see the manufacturing boom for what it is and its relating to covid as much as possible (and it is a boom, everyone I know who makes anything is crazy busy). With shipping becoming a nightmare, and peoples cash diverted away from entertainment/holiday by covid and into physical goods (money will always get spent – we’re terrible savers) then the demand for manufactured goods & parts, especially ones that don’t have shipping involved will be higher than normal. However Im sure everyone will be a bit like us – carrying high stocks at the end of last year (as best you can in the bike industry) to avoid brexit issues, but the current boom is causing those to whither fast, and soon we’ll be out with no way to restock efficiently.
For manufacturing therefore, I would summarise it from my experience and those I speak to as brexit is basically just annoying for most, compared to Covid which is an actual nightmare as the effects ripple through the system. Still with all challenges come enhanced opportunities if you can be the one that beats the challenge.
Should read
I think though we have to see the manufacturing boom for what it is and its relating to covid as much as brexit (and it is a boom, everyone I know who makes anything is crazy busy).
What a load of absolute and utter s***e…
Edit – the Brexit thing Ben, not your comment specifically!
That’s about ten sales in the UK affected by propain.
“I work for a renowned British Gearbox Manufacturer and since Brexit we have won more orders than ever, over 25years worth of orders, so to all those sceptics out there Brexit isn’t all bad”
Did your employer win these orders because of Brexit or were they going to win them anyway? If it’s the latter, maintaining the status quo isn’t a Brexy Bonus, it’s a lucky coincidence.
And if it is Brexy Bonus, why hasn’t it been shouted from the rooftops by every gammon?
David Brown’s? Visiting the Orange factory? Gearbox manufacture? Definitely has a whiff of Huddersfield about it
David Brown’s? Visiting the Orange factory? Gearbox manufacture? Definitely has a whiff of Huddersfield about it.
Good guess, we won the orders from overseas and our main competition was German, can’t say too much more, official secrets and all that, but the deals were sealed after Brexit.
It has been announced in the local press, but they don’t like blowing there own trumpet.
Once this covid is out of the picture I think British Manufacturers will be well placed in the world economy.
No comments from the remoaners!!!.. Must of all crawled back under there negative miserable stones
And that comment above ladies and gents pretty much sums how damaging and divisive binary tribalism in politics has become. I refuse to use expressions such as “gammon” or “remoaner”. We should all respect that others have a unique set of circumstances that are impacted differently by this. The name calling and excessive use of exclamation marks makes me want to ditch using this site and most social media to be fair. Pricing and additional import paperwork is a fact and yet another burden.
Insulting someone for their main stream political views is completely unacceptable.
Beers all round I reckon.
To be fair I think you’d be ditching the wrong site. Brexiteers are in the minority here in my experience.
One other reason for the longer lead times some companies are now reporting is that the bigger firms are able to buy bigger volumes of currency in advance and place forward orders well into the future. This squeezes out the less wealthy firms from the market.
This practice has been going on for a long time, only now the effect is more acute, its like the bike industry version of panic buying toilet roll.
If its David Brown gearboxes it’s most likely from the MOD / British military. So **** all to do with whether in the EU or not.
“One other reason for the longer lead times some companies are now reporting is that the bigger firms are able to buy bigger volumes of currency in advance and place forward orders well into the future. This squeezes out the less wealthy firms from the market.”
You’d be surprised on the lack of cash up front needed. We don’t pay for anything we order (except frames) up front. Thats part of the problem the industry faces ironically. People are just running up massive tabs ordering huge swathes of stock, knowing they can cancel them in a year with no penalty. If we moved to an upfront non-refundable deposit model this problem would pretty much go away overnight.