Supply Chain Is Hooped | GTAMotorcycle.com

Supply Chain Is Hooped

TK4

TK4

Well-known member
From a friend in the bicycle business -

"It’s now $24k on average to get a 40’ container shipped from the “East” into Long Beach and it’s a 26 month wait... Let that sink in... I order a shipment of gadgets today, massive deposit to hold my spot (and no guarantee shipping costs don’t go up) and I won’t even get my product for over 2 years.... This comes directly from friends in the bicycle industry. I wish everything was made in the USA, but the reality is that most everything has been outsourced. We haven’t even begun to see the supply chain issues and the snowball that they will create. Corporate bankruptcies in 2022/2023 will be atomic... "

" *2 years ago it was under $1,000 for that same shipping container to be shipped across the Pacific and it would have taken only 45 days."
 
My buddy deals in granite through a shop he works at. He says they buy product from Europe, get confirmation of shipping, and it gets sold to a higher bidder before it even hits the shores in North America.

He says anything shipped right now is still up for sale as people/companies are just paying way more for shipped product just not to wait. Unless it’s in your warehouse, and depending on the seller, the product isn’t yours.
 
So does this now create an opportunity for local manufacturers?

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Joe Bass said:
So does this now create an opportunity for local manufacturers?

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For most things, still no imo. If it required big molds, they are far away and recreating them will cost a fortune. If it was pricepoint product (which is most things now), there is a real chance that it disappears from the marketplace. People may impulse buy it at x dollars but at 2x they can't sell enough to be economically viable. I used to work with a manufacturer that was a day away from signing a big contract for a locally produced product. Store took a meeting with an asian supplier that would allow them to retail the product for under the wholesale cost of the guy I knew. Deal dead. His was better but all they cared about was sticker price. After that, all future products he came up with were built in china.

Some things could present an opportunity but we'll see how it pans out. For instance, carbon bikes at $3000 may be hard to get, but you can get a custom metal framed bike built locally for $5000+. Some consumers will make that jump. Now, the local bike manufacturers have been running at capacity for a long time with many having a wait list more than a year long. Do they put their prices up substantially to keep the wait list under control? How many consumers decide to buy local at $8000+ instead of waiting it out for $3000 bikes to return?
 
I've been telling you guys since September :LOL:

26 months is largely a production related delay. longest wait times appear to be india, was usually 7-9 weeks transit on water from India->Toronto but now it's up to 15-16 weeks at times.
 
GreyGhost said:
For most things, still no imo. If it required big molds, they are far away and recreating them will cost a fortune.
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Yep, and as soon as the supply chain gets fixed, all that money spent on ramping up local production will have gone to waste, as everyone goes back to buying from China once again.

Ain't nobody gonna wanna eat that cost.
 
We bring containers in from Europe and China every month. Our last 40’ Fcu From Shanghai to Vancouver cost us $12500, 17-35 days at sea and at that price we are not waiting. Almost triple pre-Covid rates, nobody is paying $24k FCL or waiting 24 weeks to sail.

Venice to Montreal is a bit cheaper, our last shipment left Aug 1 and arrived Friday in port.
 
mimico_polak said:
My buddy deals in granite through a shop he works at. He says they buy product from Europe, get confirmation of shipping, and it gets sold to a higher bidder before it even hits the shores in North America.

He says anything shipped right now is still up for sale as people/companies are just paying way more for shipped product just not to wait. Unless it’s in your warehouse, and depending on the seller, the product isn’t yours.
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Surprised there isn't more places up north supplying granite. Its not like there's any shortage up there.
 
Freddy Fudpucker said:
Surprised there isn't more places up north supplying granite. Its not like there's any shortage up there.
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Oh for sure...but as other items...much cheaper to bring it in from Europe than it is to get it from here.

When I say granite I also mean other stones (quartz, marble, etc.) that fall under the category. I know nothing about that business...except that half my friends work in it.
 
GreyGhost said:
For most things, still no imo. If it required big molds, they are far away and recreating them will cost a fortune. If it was pricepoint product (which is most things now), there is a real chance that it disappears from the marketplace. People may impulse buy it at x dollars but at 2x they can't sell enough to be economically viable. I used to work with a manufacturer that was a day away from signing a big contract for a locally produced product. Store took a meeting with an asian supplier that would allow them to retail the product for under the wholesale cost of the guy I knew. Deal dead. His was better but all they cared about was sticker price. After that, all future products he came up with were built in china.

Some things could present an opportunity but we'll see how it pans out. For instance, carbon bikes at $3000 may be hard to get, but you can get a custom metal framed bike built locally for $5000+. Some consumers will make that jump. Now, the local bike manufacturers have been running at capacity for a long time with many having a wait list more than a year long. Do they put their prices up substantially to keep the wait list under control? How many consumers decide to buy local at $8000+ instead of waiting it out for $3000 bikes to return?
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The company I worked for sold a high quality version of something carried by Canadian Tire and got used on a house owned by a Canadian Tire VIP. The VIP liked it so much that he wanted it in the stores and booked an appointment for our sales rep to see a buyer. The rep wouldn't have to wait or grovel to get seen.

The buyer was polite and said the product was great however the floor staff consisted of part timers, house wives, retirees and students. They worked multiple departments with next no training.

Customers read the labels and specs. Both the $40 and $80 products say 800 watts / 120 volts CSA etc. The $40 goes in the cart and the $80 back on the shelf. It would be a waste of time for both sides.

Making bicycles here sounds like a good idea. We have steel to make frames and aluminum for the rims. Those are doable but how about the derailleurs, sprockets, tires and bearings?

How much sap can you get from gramma's rubber plant for the tires?

Maybe if we went back 60-70 years to CCM coaster brake bikes it could work, IF anyone would by them at Canadian labour rates.

The Catch 22:

Providing there was a supply of frame fittings and mechanical parts a person could make bicycles one at a time taking a week each. He could do it from his home workshop but the minimum labour cost would be a couple of thousand dollars per unit. (Plus parts).

If even one part supplier lets him down on the pettiest item he can't sell his output.

He could cut labour by 90% by going CNC production but would have to spend $XXX,XXX on space and equipment for a market that would disappear the minute the shipping issue was resolved.

The same goes for furniture, clothing and many foods etc.
 
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nobbie48 said:
The company I worked for sold a high quality version of something carried by Canadian Tire and got used on a house owned by a Canadian Tire VIP. The VIP liked it so much that he wanted it in the stores and booked an appointment for our sales rep to see a buyer. The rep wouldn't have to wait or grovel to get seen.

The buyer was polite and said the product was great however the floor staff consisted of part timers, house wives, retirees and students. They worked multiple departments with next no training.

Customers read the labels and specs. Both the $40 and $80 products say 800 watts / 120 volts CSA etc. The $40 goes in the cart and the $80 back on the shelf. It would be a waste of time for both sides.

Making bicycles here sounds like a good idea. We have steel to make frames and aluminum for the rims. Those are doable but how about the derailleurs, sprockets, tires and bearings?

How much sap can you get from gramma's rubber plant for the tires?

Maybe if we went back 60-70 years to CCM coaster brake bikes it could work, IF anyone would by them at Canadian labour rates.

The Catch 22:

Providing there was a supply of frame fittings and mechanical parts person could make bicycles one at a time taking a week each. He could do it from his home workshop but the minimum labour cost would be a couple of thousand dollars per unit. (Plus parts).

If even one part supplier lets him down on the pettiest item he can't sell his output.

He could cut labour by 90% by going CNC production but would have to spend $XXX,XXX on space and equipment for a market that would disappear the minute the shipping issue was resolved.

The same goes for furniture, clothing and many foods etc.
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That's why I used bicycles as one of the more feasible examples. We have a lot of competent bike builders in NA. Many cyclists are willing to pay the premium commanded by domestically manufactured frames (I don't know of anyone domestically manufacturing full groupsets, there are a few that make ti cranks and chainrings). A container of components makes a hell of a lot of bikes (or alternatively, components are small and light so air may be viable). You don't have someone cross shopping T-labs out of montreal and CCM at canadian tire so price is less of an issue. They both have the same general parts but buyers understand why one costs more and a lot are willing to pay.

Just for some domestic eye-candy. Some more of Brad Binghams welding.

bb-gravel-12-1200x800.jpg
 
Bicycles are a bad example
Shippers are reluctant to assign a sea can to a bicycle shipment because traditionally bike stores want to order their next years inventory now, to be delivered in a can in the spring, then the can sits at the bike store warehousing those bikes till they are sold.
In today's sea can market, they NEED that can back as soon as they can get it. In the old market the can could sit there till they found a load for it to get back to Asia. Now they'll return it to Asia empty if they have to.
If you were shipping cars in that can, the can would arrive at your dock, you could have the can unloaded and headed back to the container yard in an hour.
IF we built bike frames HERE and only had to ship in components, you could reduce the amount of shipping volume used by bicycles by 75-80%. There is a lot of air in a bicycle frame.

My issue with this mess is that SOME shippers are not honoring their contracts to pick up on the spot market, which leaves their contract customer, which should be getting the lowest rates, to outbid the spot market, so the end up paying the HIGHEST rates... that will eventually lead to lawsuits that the shippers will lose and then they add the payouts of those lawsuits to future shipping costs, which we, the consumer, end up paying.
So the biggest loser here is US, the consumer.
The second biggest loser is the Dollar store, that because of shipping costs will have to re-brand as the Two Dollar store, as their biggest cost will be shipping, it will cost more to ship that piece of junk from Asia, than what the piece of junk is worth.
 
British McDonalds stores ran out of milkshakes due to shipping issues and a shortage of drivers!
 
Delboy said:
Now I'm going to have to hang up my torch and never weld again... :cry:
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It's a fools game to compare yourself if Bingham or Emmett. It's like saying you won't run again because you've seen Usain Bolt run.

FWIW, that is normally how they look right after welding. No cleanup required. Porn.
 
one of the largest ports in China closed Sunday due to Covid and will be shut 14 days minimum. That is literally thousands of cans that will not move. And if your can was in that port they are not allowing shuffling in or out.
We are seeing quotes of 12-16K , can starting in mainland China and landing in New Jersey. It just gets tacked onto the end users price, but its ugly.
My brothers machinery company is getting estimates of 6 mths del time for product made and sitting in China. yikes
 
Paint and resin specialty ingredients out of Asia are running about 3 to 6 months delivery with non-committal timelines.
 
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