The collapse of South Korea’s Hanjin Shipping Group is already impacting a number of cycling industry businesses, it has emerged.
The sea freight business – which has filed for bankruptcy – is the seventh largest in the world and as such the collapse has had a ripple effect on global shipping times and significantly, pricing too.
Of its fleet of 141 ships, 89 are currently estimated to be either in difficulty, or seized at ports around the world. 29 containers on board those impounded boats at present are carrying bikes destined for UK bicycle distributor Sportline, CEO Dominic Langan told CyclingIndustry.News.
“We are still assessing the impact, but from our last update it sounds as though the delay will be limited to a week or so. We may, however, face some additional shipping costs.
“We have 29 containers either impounded in port or bobbing around on the oceans because of this business collapse. I presume many others will be in the same situation.”
Affected to a lesser extent, UK distributor Extra is among those tracking one container, again set for only a week’s delay.
Businesses without cargo on the affected ships are, unfortunately, likely to feel some knock on effects.
“Thankfully, we are not directly affected as none of our sea shipping comes via Hanjin. However, shipping costs and transit times have increased as a result, so it has had some impact,” added Upgrade Director Damian Mason.
Cyclemotion’s Mark Bickerton, while unsure at present of the impact on Tern and his own Bickerton Bikes, said that most will be covered by some form of insurance.
“Unfortunately a claim won’t get the bikes to you much quicker, but most will have some kind of insurance against this scenario.”
Coming at a far from ideal time for the business and following Britain’s ongoing Brexit saga, many in the business are starting to question whether domestic or local production is more financially viable, as well as more environmentally friendly.
In response to the release of European market report data, CONEBI President René Takens recently called for manufacturers to look at the potential of producing in Europe.
He said: “For our customers it is important that the production of mainly medium to high-end bicycles is realised near the European home market. Deliveries can then be more flexible as the produced series can be smaller and lead times can be shorter. Our bicycle industry is spread over the whole EU territory, with 600 small and medium-sizes bicycle companies. Thanks to the regionism of our ‘green’ industry, co2 emissions caused by the transport of the bicycles are reduced to almost zero.
“The EU bicycle industry is seen as the best and most innovative in the world. By continuously striving to improve the quality of our products by R&D and by making further investments, this image can only be strengthened.”
Though unconvinced by the notion that production is slowly creeping back west, TringMotion’s David Barnett says business will be hit by the shipping crisis.
“It is putting up my cost for importing by adding to my shipping costs, as well as the permanently weakened pound.
Speaking on repatriation, Barnett suggests that both attitude and tube manufacturing capabilities mean that the far-east remains in the driving seat, despite rising costs.
“I would doubt mass repatriation would be possible due to the lack of investment in tube manufacturing. The UK also has the double whammy of expensive electricity, probably making it extremely unlikely that the full scale production would return.”
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