It’s about time we also address the delays that have been plaguing us through the year. As some of you might know the bike industry has been in a whirlwind and we’re not immune to the global phenomena. We have been doing all we can to deliver the bikes on time, but many of the current challenges are simply out of our reach to control.
It all started in the beginning of 2020 when the Covid lockdown first hit China, followed by Europe and the US, and later almost everywhere in the world.
While many have managed to keep working remote, a factory doesn’t work that way. You need people to operate the machines, handle the goods and keep things rolling. The Pelago frames are handmade. Although we use precision machinery to produce all the parts and details, every machine is operated by a human. All the parts are welded together by hand and finetuned in the QC department. There are about 40 people operating the line during the production. Missing one person, it slows down the whole process. Imagine if half the people are quaranteened, let alone everyone.
To top the dilemma, all around the world it was instructed to avoid public transportation and the temporary layoffs increased people’s spare time which all increased demand for bicycles. So the bike shops were open, but the factories were closed. While the factories could not handle their regular line of work and deliver parts on time, it was topped with expanded demand. That’s what you call a bottleneck, a strangled bottleneck.
But the story of the delays continues. The shipping ports were also operating with a limited workforce which slowed down the shipments. And once the factories were slowly getting back on track, all the new orders flooding in created new problems. The spike in demand resulted in shortage of raw materials, the freight boats got loaded and there was shortage of containers. (And not to say our deliveries were much impacted by the accident in the Suez Canal in March 2021, it was yet another unexpected event to lag global deliveries.) The global shipping container shortage has not only caused delays, it has also multiplied the freight prices five-fold from pre-pandemic levels.
The component suppliers have been trying to ramp up their production to meet the demand and shorten the out-of-hands lead times of up to 2+ years currently. At the same time new Covid outbursts in Asia have still caused further shut downs.
While surprises and sudden delays have become the new normal, forecasting has become ever more challenging to us. If a one single component gets stuck somewhere in the supply chain, a complete bike cannot be assembled. April 2021 for example, our Brooklyn and Bristol frames were painted and most of the components were delivered to the assembly factory, until we got a last minute notice from the tyre supplier that the delivery will delay 3 months. Luckily we found an alternative tyre to cut the delay shorter, but still, delayed. The second batch of Hankos and Airistos was also severely delayed due to frame factory capacity issues described above followed by a huge container shortage and jams in harbours all over Asia. Latest update on leadtimes impacts the delivery of Stavanger. For more than a year, we’ve been looking at and holding an order confirmation with delivery date for November 2021, but were informed last week, the shipment of cranks won’t arrive until February 2022.
Whether it’s been for the lack of raw materials in production, factory shut downs or capacity problems, container shortage or delays caused by inaccurate planning, we at Pelago also look in the mirror to ask ourselves, how can we improve our forecasting and communication in the middle of all this. This is a task that we need and want to get better at.
We hope the situation improves for 2022, and kindly ask your patience and understanding in these difficult times. We hold strong on delivering all the bikes that have been ordered. If the wait gets unbearable, your consumer right is always to cancel your order and get full refund if you have already paid for the bicycle. Please don’t hesitate to contact us for further inquiries and any pedaling related matters!
