Brexit and Covid 19 affected British cycling industry in a number of ways. Shortages, delays and price hikes made the life of cycle shop workers difficult. Half a year of unprecedented crowds wanting repairs done immediately and the Governments attempt to boost the economy with their £50 bike repair voucher made 2020 a very strange year.
The Covid-19 Effect
Although the beginning of Covid 19 was an incredibly successful financial time for the bike industry it quickly changed into a nightmare as the supply chain collapsed.
Covid 19 was unprecedented and introduced many threats to the economy. Lock down discouraged the spread of the virus, but it also made people fearful.
It also slowed down many parts of the economy. For the world-wide bike industry, however, it was like a gold rush. Different factors made cycling the go to activity. There was a fear of using public transport.
Leaving your house was only for shopping or exercise.
Cycling was one of the few activities allowed in lock down. As cycle sale predictions are based on previous years sales, the sudden demand for bikes exceeded these expectations. This meant that the bike shops and their suppliers were soon left with no stock. The amount of bikes predicted to be sold throughout the year, were snapped up in first weeks of lockdown.
The disruption of the supply chain
The high demand for cycles and components meant that there needed to be a step up in production. The problem was that the pandemic not only locked people in their homes but also temporarily closed factories and distribution centres . This caused two problems. The production process was put on hold.
The containers that were either kept at ports and warehouses and, full or empty, couldn’t be moved.
So even if the new season bikes were built and components packed, they couldn’t set sail because of the lack of containers. To add insult to injury, on Tuesday 23rd March 2021, a giant container ship,” Ever Given”, blocked the Suez canal for 6 days. This caused further disruption.
Price increases
Bike companies were caught between a rock and a hard place.
On one hand, storing the stock in hired warehouses cost money, but shipping their bikes quickly increased transportation costs. For example, the price of shipping a 40 foot container rose from $2000 to $8000.
Added to this, all main freight companies also raised their prices to cope with Christmas-type demand, speedy deliveries, staff shortages and increased costs.
Brexit
On the 31st December 2020 the Brexit transition period ended and companies in the UK were forced to implement new regulations which were massively more complicated with red tape and significant extra costs.
In addition to shipping/ customs issues, bike companies had to comply with UKCA marking. Although these standards are identical to European CE requirements, it costs £500 per bike model to administer and label it.
To be able battle these new regulations, companies were forced to hire customs agents which further added to their costs.
£50 repair vouchers
The ‘Fix Your Bike Voucher Scheme’ was launched in July 2020. The government issued £50 vouchers to the public to use in a registered bike shop to get their bike serviced or fix. It was intended to encourage more people to cycle in the pandemic so that people reduced the amount public transport. The scheme was closed in December 2021.
It was a controversial scheme. It was set up on a “first come, first serve” basis. As soon as the scheme went live, offering 50,000m vouchers initially, the website crashed and finally worked again at 4am on a Wednesday morning. By 9am all the vouchers had been claimed. People who didn’t need the vouchers applied for them. Sometimes people were able to get two and were trying to use both of the vouchers on one bike. Many people who could have benefitted were unable to access the Fix Your Bike website or unable to use the internet.
If you were a small independent workshop the paperwork took time. The big guys could use their accounts department to perform the admin. Each voucher applied to one certain bike as registered by the customer. It had to be verified on the website and after completion of the repair a photo had to be taken and uploaded onto the website. A few participants expected £50 to cover any repair that needed doing and others only wanted £50 of work doing and weren’t prepared to pay any extra, even, if after the £50 repair, the bike was unroadworthy.
Its hard to know if the 40,000 vouchers encouraged more cycling in the pandemic or if the wish of the Government to kick start a cycling revival for post Covid-19 has got more bums on saddles.
Brexit and Covid 19 effect – The Future
It doesn’t seem that there has been a long-lasting surge in cycling in the UK. Many people who took up cycling for exercise in 2020 have put their bike back in the cellar or garage. When the streets were at their quietest in 2020 with less people commuting and being unable to socialise or travel, it was hard to imagine them teeming with cars, but in 2023 it feels as busy as it ever was. It seems that improved infrastructure for cyclists would help to create a sea change, although, just as importantly it would be good to see less demonisation of someone just because they choose to ride a bicycle.
Cycle companies have been deluged with bikes as all the cycles held in containers and warehouses have been shipped. They need to be sold to regain capital before next July. This is when the 2024 models are released and have to be paid for. It could be a good time to buy a new bike.
Brexit and Covid 19 effect – In Conclusion
Although the cycle industry has been beset with problems due to Brexit and Covid 19, there is still hope on the horizon. Cycling in the UK is up 33 per cent on pre pandemic levels according to the Department of Transport.
Electric bikes are becoming more popular. Introducing a whole new group of people to cycling as well as encouraging current cyclists to consider travelling further.
The disruption of the supply chain. The increased demand for bicycles and accessories couldn’t be fulfilled. During the pandemic most factories and distribution centres were temporarily closed and the production process was put on hold.
Bikes that were already produced couldn’t be shipped fast enough as there was a shortage of shipping containers that stuck in closed ports.
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