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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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.