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news
Canyon_Factory_12.jpgIs another supply chain crisis about to hit the bike industry? Container shipping rates surge amid unrest in the Red Sea
The struggling bike industry looks set to face another gruelling headwind as it begins 2024, with the recent spate of attacks by Houthi rebels on commercial vessels in the Red Sea prompting an increasing number of firms to pause shipments through the key international trade route and container prices to soar, potentially leading to further supply chain woes for an industry hit hard in recent years by the disruption caused by Covid lockdowns.
This week – despite warnings of severe “consequences” from 12 countries, including the UK and United States – Houthi rebels from Yemen continued to significantly step up their campaign of targeting commercial vessels in the Bab-el-Mandeb strait between the Arabian peninsula and the Horn of Africa, which the Iran-backed group launched in November in protest against Israel’s actions in Gaza.
The Guardian has reported that the Houthi campaign’s recent escalation, which includes hijacking and drone and missile attacks, has prompted 18 of the world’s biggest shipping companies to pause their operations in the Red Sea and Suez Canal, which normally handles around 12 percent of global trade and is accessed by vessels travelling from Asia.
These companies have instead resorted to rerouting their shipments around the Cape of Good Hope, adding around 3,000 nautical miles – about ten days – to journeys connecting Europe and Asia, according to Dutch bank ING.
> Here’s why the bike shortage isn’t going away any time soon
This disruption is driving up the cost of shipments between China and Europe (a key route for the bike industry), with maritime research consultancy Drewry reporting that the price of a 40ft container shipment from Shanghai to Rotterdam has spiked from approximately €1,000 in early December to €3,300 this week.
However, despite the soaring prices brought about by the Houthi attacks, those numbers still pale in comparison to the height of the Covid pandemic, when perennial lockdown measures in the Far East precipitated an almost ever-prevalent imbalance in the shipping container chain, and a 40ft container from China to Rotterdam priced as high as €15,000.
The currently over-stocked nature of the bike market, as Cycling Industry News’ Jonathan Harker noted last month, also means that a lack of supply (depending on how long the attacks last, of course) won’t necessarily send immediate shockwaves around the cycling industry.
Nevertheless, the recent disruption has still caused some serious concern, especially in light of the Covid lockdown-inflicted supply chain issues that decimated the bicycle supply chain in 2020 and 2021 (at a time of greatly enlarged demand), creating massive waiting times for containers and price inflation, and resulting in increased product costs and pressures on importers, retailers, and distributors.
Speaking to GCN last month, Harker noted that the latest disruption comes at an ominously precarious time for an industry reeling in recent months from the troubles suffered by major online retailers and distributors, and whose global manufacturing model remains reliant on the Far East.
“For a market like cycling, already struggling to cope with significant difficulties where we’ve seen major online retailers and trade distributors go into administration, it’s clear there is not much capacity to handle many more challenges,” he said.
“Delays in new model year products reaching the market is bad enough, but stock stuck on container ships also means cash stuck on container ships. Given the liquidity challenges, that’s very bad news for the market.
“The cycle industry won’t be the only market hoping for a swift resolution to this, but likely will be among the sectors that will be hardest hit by this latest supply chain disruption.”
After obtaining a PhD, lecturing, and hosting a history podcast at Queen’s University Belfast, Ryan joined road.cc in December 2021 and since then has kept the site’s readers and listeners informed and enthralled (well at least occasionally) on news, the live blog, and the road.cc Podcast. After boarding a wrong bus at the world championships and ruining a good pair of jeans at the cyclocross, he now serves as road.cc’s senior news writer. Before his foray into cycling journalism, he wallowed in the equally pitiless world of academia, where he wrote a book about Victorian politics and droned on about cycling and bikes to classes of bored students (while taking every chance he could get to talk about cycling in print or on the radio). He can be found riding his bike very slowly around the narrow, scenic country lanes of Co. Down.
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Ridiculed or is it just jealousy?
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32 comments
Meanwhile, a little closer to home...
Drivers could be facing three years of Operation Brock when the new Entry-Exit System is introduced at Port of Dover and Eurotunnel
Cllr Neil Baker, Kent County Council's cabinet member for roads, warned the new Entry-Exit System (EES) is going to be a "serious, serious mess".
https://www.kentonline.co.uk/kent/news/we-re-facing-three-years-of-brock...
but wont worry, the India deal will be along any minute now - enjoy those imported fresh foods while you can.
Outsourcing your manufacturing industry, whoever thought of it? go straight to the top of the class, tie the noose and jump off !
... and also outsource your environmental impact; no better way of being 'green'!
And you're going to give these people jobs how? Or ar you just going to complain when the increase in crime statistics correlates? 🙄 thanks for playing zoomer.
The supply chain crisis is very real..... before this "Red Sea" fearmongering..... It's been on a downward slope since June 2016.... worsening everyday....
Easy keep a junky bike you can always ride. It requires basic parts. It gathers little attention. If you need to ride something £2k+ you're an easier target. Middle class people trying to live a boujee life are the first victims.
Globalisation turns out a little bit of a dead end? What else is new?
Outsourcing your industry, fantastic idea wasn't it?
"Israel’s actions in Gaza" = indiscriminate killing of more than 22,000 unarmed civilians incl nearly 10,000 children so far.
A likely marginal increase in the cost of bike parts here is entirely trivial in comparison with the suffering and loss Israel is once again inflicting on Palestinians.
Better to just let Hamas (who are terrorists) run riot in Israel and kill indiscriminately then is it?
Although I agree with your point that cost of product doesn't compare with innocent bloodshed and human suffering, to be clear.
.
Replace Hamas with IRA and see how popular an armed attack on Ireland would be.
You can't compare conflicts, particularly the Irish Troubles.
Not saying there aren't parallels sometimes but particularly with the IRA it was quite a different scenario.
You can't if you don't understand the comment. Unless you're saying that the bombing of civilians is not fall out from the search for Hamas terrorists but something entirely, land grabbing, related...
The common factor in both is English collonialism.
You forgot to mention that Israel's killing was done in response to, and in attempt to prevent the recurrence of, the indiscriminate torture and rape and murder of over 1000 Israelis by thousands of not-unarmed Palestinians. None of this would have happened were it not for the decisions made by the Palestinian leaders of Gaza and those supporting them.
No, you're wrong. One crime doesn't justify another.
I think you're badly wrong here...
Effectively you're saying that 9/11 ( to use a high-profile example) was a crime (agreed) but that no action should have been taken about it to prevent it happening again.
9/11 is a very good example of the wrong action being taken, the crime was committed by fifteen Saudi Arabians, an Egyptian, a Lebanese and a citizen of the UAE, backed by Saudi Arabian money and directed by a Saudi Arabian hiding in Afghanistan, and so the US blew the hell out of Iraq, which had nothing to do with the attacks.
If Israel went after the murderous bastards in Hamas with genuinely targeted attacks most people, including me, wouldn't have a problem with that, it would be proportionate and sensible action to, as you say, prevent it happening again. That doesn't mean that you can justify indiscriminate bombing of civilian targets and the killing of tens of thousands of non-combatants, including children.
I read some comment somewhere, asking how many children it would be appropriate to kill to get to a terrorist holed up in a school.
The wrong action ref Iraq maybe as a result of Bush's obsession with that, but ultimately it nailed it with the death of Bin Laden. But the point is that they didn't take no action.
No-ones saying that indiscriminate attacks are justifiable. I don't think that anyone other than those inside the Israel HQ can truly know what or why they're attacking certain areas in Gaza. But you also have to realise that these terrorists are using hospitals, and other civilian targets as human shields. Israel are stuck between a rock and a hard place, and so far, I believe they're doing the right thing.
Israel has dropped 29,000 bombs on Gaza since the start of the conflict, with more than half of them being unguided, meaning that they have a margin of error in what they hit of +/- 30m. Imagine how indiscriminate that is in an area as crowded as the Gaza Strip. 20,000 people have been killed of whom 8000 are children and 6000 are women. Israel has one of the world's best trained military machines, backed with the very latest weaponry and an incredible intelligence service, and could if they wished be carrying out their mission with far more precision. They have the right to defend themselves, they have the right to avenge themselves, but I can't see any way in which you can see 8000 children killed and say yes, that's doing the right thing and exhibits an acceptable level of discriminated targeting.
I don't know where you got these numbers from, but a quick google for accurate stats brings up some wildly varying estimates.
No one can know (other than high-level government & military personnel ofc) exactly what, who, or why Israeli forces are doing what they're doing. Neither will anyone know for a considerable amount of time. Some of it looks indiscriminate, and sure they could do better but I'd rather not get into a moral debate about whether certain things are justifiable or not without knowing the much finer details.
Back to the point, i'd much rather road.cc and other media outlets didn't use it as an opportunity to bring further friction and pressure to the cycling market.
Even though you're a troll, I'll respond to this one: No I'm not saying that.
Tracking down Al Quaida, killing Ben Laden, dealing with other Islamist terrorist groups, fine. But what Israel does to Gaza and it's population is not akin to that, it's akin to what the USA and their allies did to Afghanistan and its population, to Irak and its population, etc.
I disagree. On the fact I'm a troll and ref your point on Israel.
My way of looking at it, is that what the IDF are doing is 'roughly' equivalent to if the UK Govt had decided to carpet bomb Northern Ireland as a response to the IRA bombing campaign on the UK mainland back in the 1980s.
(edited for clarity and tense)
Dear lord, do actually believe what you have written?
Try understanding the history.
But pretty much unconnected and irrelevant. The Houthi's are part of a proxy war between 2 views of the Islamic Faith championed by Saudi Arabia and Iran respectively.
If anyone thinks either side have any redeeming features they are very much mistaken, inspite of the the Saudi's nominally being the West's allies. They are as fanatic as the Iranians - and arguably much less of a democracy than Iran.
There is little real connection to the ongoing Gazan War Crimes - apart from a it being an opportunity for the Houthis to cause some mischief, possibily with a nudge from Iran to put more pressure on America to get the Israeli's to finish their war crimes.
And I should care why? Kick the bear, get bitten. Just get an older bike that you can get parts for out of a bike shop bin and ride that.
Nothing like a good bit of media hype and scaremongering to bring a bit of disruption to the bike industry (or any industry for that matter)
Thanks road.cc
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