It is widely accepted that prices for most goods coming into the UK from overseas look set to rise; but what are the root causes? Is it Brexit, Covid, shipping costs, or all of the above? In this guest post Fully Charged founding partner and eBike aficionado Dan Parsons gives CI.N an overview of the challenges that are being faced by all at the moment.
The effects of a year like no other continue to be felt throughout the cycling industry, with increased demand and reduced supply causing havoc and severe delays. But why? How is it currently so hard to get your hands on an eBike?
Remaining open throughout the Covid-19 pandemic has been both a blessing and a curse. As a stockist of some of the world’s leading eBike brands, we at Fully Charged have been able to offer an alternative method of transport to many. We began early on in 2020 with our NHS campaign, and have since helped hundreds of consumers avoid public transport and reduce the risk of transmission of Covid-19. We would like to think we’ve broadened the radius of those staying at home and looking to see a little more of their surroundings during their daily exercise in an unquestionably socially-distanced manner.
Keeping the doors open has also enabled us to support UK businesses and local authorities diversifying their transport solutions with eCargo bikes, an area of the business in which we have seen huge growth this year, with many forced to adapt the way that they move around due to city centre closures, road diversions and parking restrictions put in place in exchange for ‘Covid cycle lanes’. Probably the most important aspect though has been our ability to have kept open our Service Centre, enabling us to keep our existing and new customers and businesses on the road, reliant on their eBike and eCargo bikes for daily life and business.
But when we pivoted our business during the first lockdown to offer virtual consultations and appointment-only test rides in a Covid-safe environment, we quickly became overwhelmed by the demand and the struggles in the supply chain.
We are undoubtedly stuck in between a rock and a hard place. We would dearly love to have unlimited product available to us, with seamless transit from supplier and consumer, but sadly the reality is somewhat different.
China and Taiwan are responsible for the lion-share of the world’s production of bikes and bike components. Having fallen first at the hands of Covid-19, both saw dips in their production capabilities early on in the pandemic as their workforces were forced to stay at home and their factories closed. The lockdowns then rippled westward, with our own European suppliers (themselves dependent on the supply of parts and materials from the East, already delayed) forced to shut down their factories due to local government advice, reopening later with reduced production capacity and absent stocks of parts and materials.
As the world’s ports and ships were filled with PPE and equipment to help the fight the pandemic, further delays ensued, with costs of shipping inhibitive as prices soared, resulting in smaller suppliers to wait for the hump to pass.
Enter stage left a gremlin named Brexit, knocked from the headlines in 2020 as a result of its infectious cousin Covid-19, but rearing its ugly head in the final hours of the year to confuse and worsen the already desperate situation for UK businesses reliant on European imports.
Whilst the headlines sing of big wins for Boris and the pro-Brexit campaigners, little attention is paid to the detail. Goods coming from Europe might not be charged duty on the face of it IF they are of European Origin (made in Europe), BUT for goods coming in from Europe manufactured elsewhere (reference the aforementioned Taiwan / China and the world’s largest producers of bike bits) well, you guessed it, there are duties to be paid; 6% for electric bikes, 14% for analogue bikes and a mish-mash of percentages for different types of parts and accessories, depending on their commodity code, or HS code (in basic terms a system used to classify goods).
(Editor’s note: an overview of Brexit driven adjustments can be found here. For many labels, the 11th hour nature of the deal greatly knocked confidence, prompted an increase in prices and generally confused brands and their customers alike)
Alongside the import duties for some shipments, now come import VAT (applicable to ALL imports, whether of EU origin or not), customs fees, document fees and a mountain of paperwork adding to the operations, administrative and financial burden to already stressed businesses.
As a UK business trying to keep our doors open under the circumstances and restrictions relating to the pandemic, coupled with overwhelming demand and a reduced workforce as a result of extremely vulnerable employees forced to shield, we are putting mechanisms in place to mitigate the effects on prices driven by of Brexit and importing. We are ensuring that we have signed up to the multitude of UK government schemes for customs authorisation, duty and VAT deferment and proactively liaising with our couriers to provide them this information before it is needed and before our customers’ eBikes, parts and accessories are held in customs for any longer than they need to be.
On the most part, this has been too little, too late, with suppliers and their customers scrabbling to become experts in the world of import/export, whilst shipments sent from all over Europe to recipients all over the UK pile up at the borders with insufficient, or incorrectly completed paperwork by manufacturers rookie in the new Brexit world. All this while the logistics
companies increase their prices in tandem for their assistance.
We’ve got through last year and the start of this, as many have, with a lot of grit and determination. The provisions that we have put in place to protect our staff and customers with enhanced cleaning and no-contact sales and service will continue, but we expect the fallout of Covid and Brexit to be felt long into 2021, with prices certain to rise.
We are hugely grateful to our incredible customers and business partners, all friends of Fully Charged, who have been very patient and understanding during these unprecedented times. If one positive thing can come from this otherwise terrible tragedy felt the world over, it’s that cycling has been brought back into the mind of the public as a plausible alternative to other methods of transport.
Government have responded by accelerating changes to infrastructure and support to cycling and walking initiatives. Word in the industry is that we may have moved on some five or ten years in the space of the last 365 days.
Those that have managed to get their hands on an eBike or eCargo bike during the pandemic are already reaping the rewards of furthered freedom and boundless benefits. For those that haven’t our doors remain open to you to help in every way we can…and we thank you in advance for your patience and understanding.