Half of adult e-bike riders (50.7 percent) started (39 percent) or returned (17.1 percent) to riding a bicycle during the pandemic, from 2020 to 2021. This data is from NBDA consumer research published in late 2021 and available at

This is reminiscent of the home-grown beginnings of BMX on the American West Coast in the late 1970’s. BMX emulated motorcycle motocross racing, employing modified 20-inch bicycles.

The research also says that most adult cyclists who plan to buy an e-bike will purchase a BMX bike!

Before you toss this response away, stop and consider that the majority of consumers aren’t really that accurate about bicycle styles and types. When adult cyclists say they plan to buy a BMX type e-bike, we suggest many are thinking of the fat-tire 20-inch or 24-inch e-bike they have seen on the Internet, like this one:

American e-bike brands like Rad Power Bikes (founded in 2015), Juiced (founded in 2010) and Super 73 (founded in 2016) were direct to consumer (DTC), and are now including bike shops in their distribution and marketing.

These brands, and others like them, are based on motorcycle, moped and scooter design. They have in many cases excited consumers who have never ridden a bicycle before about riding an e-bike, or “bicycle” as defined.

Our analysis indicates that the sales surge during the pandemic changed the bicycle market and business. The NBDA consumer research found the traditional mainstream bicycle business views e-bikes as primarily an electric assist feature add-on to regular bicycles, and appeals to older bicycle riders. New e-bike brands that are primarily DTC are designed and marketed to new and younger consumers who are interested in environmentally-friendly recreation and transportation.

The traditional bicycle business and customers are more interested in values like component groups and proper fit. The new brands, and their younger, more female customers, are more interested in eco-friendly outdoor recreation and transportation. They are also interested in what a brand’s values are, as well as what they support and believe in.

Reaching out to and effectively communicating with both the traditional and new customer is the challenge for the future of the American bicycle business in uncertain times for consumer engagement and participation.

Understanding the traditional and new consumer demographics, along with changing buying and use habits, will require a change in thinking, marketing tactics and strategies going forward. It is no longer just about banning “them” from local trails and bike paths, or restricting “out-of-category” products. It is about understanding differences of perception, and finding common ground to actually be inclusive, to grow the American bicycle business and market.

Contact Jay Townley:


A November 24 article from The Economist reported that “Multinational firms are finding it hard to let go of China.” The subhead asked “Should companies divest, decouple – or double-down?”

It is no surprise that companies and brands that have sourced their global supply chains in China for decades, and more recently selling their products to the emerging Chinese consumers, are having difficulty moving away from China as the geopolitical situation makes it harder to continue to stay there. But what does this have to do with the American bicycle supply chain?

Forty-years ago Sears was the largest retailer of bicycles in the U.S. I ran into their bicycle buyer at a restaurant in Shanghai in 1984. Over the next 10 years every retailer and brand associated with the American bicycle supply chain established sourcing in China.

Giant manufactured for Trek. Giant established bike shops in China. Giant, we understand, helped Trek establish bike shops in China as well. Merida manufactured for Specialized and, we understand, also helped Specialized establish bike shops in China.

Over the next the next three decades all three, Giant, Trek and Specialized, became billion-dollar companies with world-wide distribution including China. This also means all three are multinational.

We can only speculate about the dollar volume of the business the two American brand companies are doing annually in China. Assuming it is appreciable, we are also assuming they, along with publicly-traded Giant, find themselves in the same situation as The Economist describes, finding it hard to let go of China for several reasons, including sourcing from a well-established supply chain, in addition to the revenue from doing business with Chinese consumers.

The bicycle business isn’t high-tech, but from the U.S. bicycle business standpoint, it has been dependent on the combination of Taiwanese and Chinese manufacturing, engineering and supply chain expertise for three decades. American bicycle and e-bike brands can design and engineer products, but they rely on Original Equipment Manufacturers (OEMs) for manufacturing, engineering and expertise. Leaving China means figuring out how to maintain the level of quality manufacturing that is available from Chinese OEM sourcing.

Part of the equation is that the majority of Chinese exporters to the U.S. market, including Giant and Merida, are owned or controlled by Taiwanese companies.

The American bicycle business, including the supply chain, grew-up with this conundrum and learned to live with it pre-Covid and pre-pandemic, and before the geopolitical situation grew into the current situation where multinationals, including the leading brands in the American bicycle business, have to decide to “divest, decouple – or double-down” relative to business in and with China.

Contact Jay Townley:


There has been a lot of chatter in the bicycle business of late about reshoring bicycle and e-bike manufacturing to the U.S. Anyone who follows my articles and op-eds knows I am a long-time proponent of reshoring (bringing bicycle and e-bike manufacturing back to America), or nearshoring (bringing manufacturing inside North America to Mexico, Canada or both).

To be clear, manufacturing is not assembly. The two terms of art have different meanings when applied to the bicycle business. They also require different levels of capital investment. However both require the same level of component support.

Manufacturing means rolling the tubing, or processing tubing, that is formed, welded, or otherwise joined into a frame, front fork or other frame configuration. This makes up the primary sub-assembly of a bicycle that may be coated in some form, and joined with other sub-assemblies like wheels, or electric propulsion systems, and then assembled and packaged with the required components to create a complete bicycle or e-bike for use by consumers.

In short, a bicycle manufacturer fabricates the frame and front fork, and combines them with all the required sub-assemblies and components into a packaged product for final assembly by a consumer or commercial assembler.

Assembly means purchasing the frame, front fork or other frame configuration pre-built. This becomes the bicycle’s primary sub-assembly that may be coated in some form, and joined with other sub-assemblies like wheels, or electric propulsion systems, and then assembled and packaged with the required components to create a complete bicycle or e-bike for use by consumers.

The short version is a bicycle assembler buys everything, and then assembles and packages the various pieces into a complete bicycle or e-bike for use by consumers.

Detroit Bicycle Company, owned by Cardinal Cycling Group, is currently the largest bicycle manufacturing plant in the U.S. with annual production estimated at 10,000 to 15,000 complete bicycles per year.

Bicycle Corporation of America (BCA), owned by Kent International, is the largest bicycle assembly plant in the U.S. with annual production estimated at 300,000 complete bicycles per year.

BCA has the capacity to assemble far more complete bicycles and e-bikes, and will eventually add all the machinery and other equipment required to become a manufacturer. The primary limitation to growth to a realistic annual production of around 1 million complete units per year, is the availability of component parts in-country that do not have to be imported from off-shore.

All the business entities currently involved in bicycle and e-bike manufacturing and assembly in the U.S. know and understand the nature and meaning of this limitation. It is significant.

Let us start by following the money from retailers in the U.S. up-stream, and following the revenue to the original equipment manufacturers (OEMs) and their sub-contractors and component suppliers.

When consumer demand was high, as it was from the second quarter 2020 to about the third quarter 2022, everybody paid full price and more. The discounting and price cutting that plagued the bicycle business and drove down gross margins for decades disappeared. It was replaced with fluid cash flow and high gross margins of profit for retailers, bicycle and e-bike brands, OEMs and component brands and manufacturers.

For the first time in decades, suppliers had the upper hand. Retailers, including Walmart, had to pay the price to get relatively hard-to-get finished bicycles and e-bikes, including ocean, air and trucking costs.

Giant and Shimano both made it clear that they were not going to expand production capacity by building new manufacturing facilities. They were looking at the probability that the so-called “boom” wasn’t going to last long enough for them to finish plant expansion before the added capacity would no longer be needed because consumer demand would recede. They did add shifts and worked what weekend and holidays they could, but all within existing manufacturing facilities.

During the pandemic a lot of money was wasted, but a lot of money was also made up and down the U.S. bicycle supply chain that begins in Asia.

Consumer demand has indeed receded, and the U.S. bicycle business is headed for an inventory-induced shakeout that will probably last from three to five years. Price cutting and discounting have already returned, along with the brands trying their best to manipulate retail pricing.

Pricing power has shifted back from suppliers to retailers, although mostly in the mass, full-line sporting goods and specialty outdoor channels. Bike shops are currently in a battle with brands over retail price control.

With all of this said, why would publicly-traded component brands want to invest in U.S. manufacturing, and explain the investment to shareholders, when they can continue to bank profits earned during the pandemic and pay dividends to investors?

Keep in mind some of the OEMs are publicly-traded companies, and they are in much the same situation relative to the U.S. market. The same question can be asked about privately-owned component companies and OEMs as well.

There is also the possibility of the component companies and OEMs, the majority of whom have invested in and built manufacturing facilities in Europe, shifting a portion of the U.S. supply chain to their European production facilities, particularly if the U.S. re-imposes the 301 tariffs on Chinese imports that are currently suspended, and if the war in the Ukraine further suppresses the European market.  

While I am an advocate for reshoring and nearshoring, I am also a realist who worked in a large U.S. bicycle manufacturing company for 14 years before it had to take advantage of globalization and shut down domestic operations and become a large importer.

I spent the next 10 years supervising the company’s purchasing and logistics operations that involved buying complete bicycles, fitness equipment and accessories primarily in Taiwan, China, Singapore and Japan.

What I have observed since 1990 is bicycle manufacturing and assembly, as well as component manufacturing, leaving the U.S. and North America, relocating in Asia to be closer to manufacturing OEMs primarily in China (with the high end in Taiwan). The American bicycle business and market has become import dependent, and this takes us full circle, back to why reshoring is difficult and still a long way off.

There is a limit to the level of reshoring that can be realized because there is a limit to the revenue and profit that can be made as long as components have to be imported from outside North America.

This becomes a double-edged sword in that tariffs on imported componentry have to be kept within a reasonable range. If too high, as with the 25 percent punitive Section 301 tariffs on imports from China, this will discourage domestic assembly and manufacturing. If too low, this will discourage component manufacturers from investing in U.S. production because the domestic industry isn’t protected.

Since bicycles and e-bikes are not high tech, they are not going to attract much if any support from the government or private investors. The financial support is going to have to come, or at least start, from within the bicycle and e-bike business.

The support of state and local government in providing tax incentives and relief, as well as employment incentives, will be important. However, the most important incentives will have to be structured to make it attractive for component manufactures to build plants in the U.S. and/or North America if there is going to be any appreciable reshoring of bicycle and e-bike manufacturing.

Despite the geopolitical tensions between America and China, and Taiwan and China, the U.S. bicycle business is finding it difficult to extract itself from China. Even moving to Vietnam or Cambodia is difficult because of the dependency on raw materials and components from sources in China.

There is no easy answer, and the U.S. bicycle business is going to have to do careful planning and line up local and state political and financial support well in advance of turning the first shovel of dirt.

Perhaps even more important is going to be the effort that local and state governments are going to have to make to attract and convince a sufficient number of component manufacturers to commit to the U.S. to support domestic assemblers and manufacturers who can than grow their business with brands and retailers.

Crafting a plan, and then being patient and flexible, is going to be required if reshoring is going to actually happen at any scale in the U.S.

Questions or comments? Contact me at:


Last month I wrote about my planned trip to Bentonville, Arkansas, for the SHIFT’22 Conference October 18-20. The original plan was for me to attend with one of my Human Powered Solutions partners, Mike Fritz. However, Mike e-mailed the weekend before our departure that he, and his whole immediate family, had come down with COVID. So, I would be traveling on my own, but would be meeting up with Heather Mason, president of the National Bicycle Dealers Association (NBDA), and several of her board members after arrival.

I was impressed with the Northwest Arkansas regional airport, and utilized Uber for the first time to meet up with the NBDA tour of bike shops at the scheduled last stop, Mojo Cycling, owned by David Neal, and located on North Walton Blvd.

My Uber driver was born and raised in Bentonville, and he was knowledgeable about the history of the area and the Walton family. What I observed, and what I heard from my driver, filled in some of the gaps that were missing from my preliminary research.

By way of background, my family purchased a commercial campground in the Wisconsin Dells market area in 1980, and owned and operated it until about 2005. The Wisconsin Dells Visitors & Convention Bureau is an economic and political force in the region. As members we got to know and understand how Wisconsin Dells has four sequential exits off the Interstate, and pre-pandemic, hosted 2.5 million visitors annually.

My point is that I have some appreciation for economic and political clout, the infrastructure it attracts, and what it looks like. What I saw, and what was described to me, was certainly on a par with what I see every day.

According to my local Uber driver, Bentonville is an economic island in Northwestern Arkansas. He confirmed the driving force is Walmart and the Walton family.

I mentally filed this away as we arrived at Mojo Cycling and I joined the NBDA dealer tour of this wonderful full-service bike shop and rental business. Mojo is in the final stages of opening a second rental-only location. After touring it, the NBDA served refreshments and conducted a round-table discussion that afforded the local bike shop owners the opportunity to ask the NBDA president and board members questions about the association, Profitability Project (P2) groups, and the current state of the bicycle business.

From this discussion I gathered more insights into the local market, specifically the influence of the Walton family on bicycling in the region, and the economic impact of both the Walton family and the Walmart business.

The SHIFT’22 Conference opened on Tuesday. Registration was at the Momentary Contemporary Art Museum and 21C Museum Hotel. During the afternoon several of the PeopleForBikes (PFB) subcommittees met at the 21C Museum Hotel, including the electric bicycle subcommittee that I attended, along with Heather Mason. I will cover the topic of electric bicycles and lithium-ion battery safety in detail in another article, but will share that I remain disappointed at the American bicycle business attitude of treating the safety of consumers as someone else’s problem.

Wednesday got underway at the Record Event Space. The overall theme of the Conference was “creating the bike industry we want to see.” The focus was on three core topics and presentation tracks.

  • Diversity, equity and inclusion, building a “welcoming culture within the bike industry and community,” and having the “tough conversations that get us there.”
  • The post-pandemic reimagining of “manufacturing and assembly based in the U.S.” including fostering breakthrough innovation.
  • Sustainable cycling and sustainable climate initiatives with a circular ecosystem, and what they really mean to the American bicycle business, including “what it takes to create a greener and healthier future.”

As I have noted, the second and, third-day presentations were about five blocks from the 21C Museum Hotel, at the renovated Record Event Space with two halls, both capable of seating the SHIFT’22 approximately 250 attendees.

AV, staging, and lighting were all first-class, as was the program. Speakers and panelists were also first-class. Walmart managers and executives, and the Walton family, were well represented throughout.

At this point I think it appropriate to mention the “aspirational” nature of this conference, and what it represented relative to a potential change in direction for the bicycle business.

One of our clients attended the conference, and about half-way through we talked. He said the topics and presentations were very “aspirational,” but not grounded in the reality of the current situation the American bicycle business faced. We met again toward the end of the conference. He said he had asked a member of the PFB staff about this and, was told it was on purpose.

The plan going forward is for the SHIFT Conference to be held in Bentonville in the Fall, focusing on the “aspirational” issues of creating the bike industry we want to see, with the Dana Point conference in the Spring focusing on the current issues facing the bicycle business.

This tied into another observation we discussed related to the change in leadership. No senior PFB board members or top-tier company CEOs were present in Bentonville. Again, when asked the PFB staff said this was by design.

My thought process went along these same lines, as we are witnessing a change in leadership in this country and the world, but wonder if we are also witnessing the emergence of the Walton family as growing influencers and perhaps leaders in the American bicycle business.

As a long-time advocate for the bike shop channel of trade, I do not necessarily see this as all bad for American bike shops going forward, but I do think the bike shop channel of trade will need to stand up for why it is an essential part of the bicycle business, and define what role it will play in the economics of profitability going forward.

We have heard of the investments made by brothers Thomas and Steuart Walton, two grandsons of Walmart founder Sam Walton, in the bicycle business and the bicycling infrastructure in Northwest Arkansas.

Steuart Walton was a speaker on the second day of the conference, and sat for a Q&A session. His brother Thomas was also present in the audience. Together they operate RZC Investments, with 90% ownership of Rapha and ownership of Allied Cycle Works.

Although not discussed at the conference, I think it appropriate to mention Walmart started Viathon Cycles, a DTC carbon fiber brand founded in April 2019, that imports its range of bicycles and does not source from Allied.

Steuart is, in my opinion, a very good public speaker. He made a compelling case for the importance of bicycling to the environment, the future culture of Walmart, and the community of Northwest Arkansas. His presentation included the Ledger, the world’s first cyclable building that is a Walton investment, and will be completed in about a month.

The Ledger will house a Specialized Experience Center and the PeopleForBikes office that is moving from another location in Bentonville, along with other business entities that we are assuming will be tied to Walmart, the Walton foundation and Bentonville.

This leads to Bentonville itself. Here is what the PFB SHIFT’22 agenda said about the host town:

“Towns are the heart of America, and there’s a new American town on the map. It’s a town with a big heart and even bigger ambition. A town where modern progress meets rich history, where the arts meet innovation, and where companies meet communities. A town to visit, to see, to breathe and to discover. Visit Bentonville – a new American town.”

Bentonville is the posterchild for the Walton Foundation’s vision for Northwest Arkansas, and it is the focal point of a regional community from Fayetteville to Bentonville connected by an Interstate, embracing 15,000 Walmart headquarters employees and the world through the regional airport.

All of the Walmart executives and members of the Walton family that spoke at the conference referenced the new Walmart headquarters campus that is under construction on the edge of Bentonville. The goal is a completely sustainable office campus that is open and accessible to the public, who can walk and bike on bike trails that run through the campus.

Part of the objective is for 10% of all Walmart employees to commute to work by bicycle every day. The Walmart campus, like a collage campus, is designed to blend with the community so you will not be able to tell where one stops and the other begins.

Walmart is the largest retailer, employer, and seller of bicycles in the United States. The Walton Family Foundation has been a financial supporter of PFB and bicycling’s role in economic development for well over a decade, but until the SHIFT’22 Conference has been in the background.

COVID-19 accelerated changing the world and the bicycle business. One of those changes is in leadership, another is in supply chains, and still another is in retailing. All are trying to keep up with the changing wants, needs, habits and demographics of consumers.

I do believe that PFB and the American bicycle business will migrate from Boulder to Bentonville over the coming decade because of the combination of support for bicycling, equity, inclusiveness, sustainability, innovation and reshoring.  None of this will be easy, but the third generation of the Walton family has expressed the desire to invest in what must be done to grow the bicycle business in America.

Early in the conference I took exception to the way PFB framed In America, and the post-pandemic reimagining of “manufacturing and assembly based in the U.S.” including fostering breakthrough innovation. Post-conference, I still do.

The session featuring “Innovators Driving Change Through Manufacturing” included Drew Medlock, CEO of Allied Cycle Works, Josh Richards, COO of Game Composites, and Arnold Kamler, Chairman & CEO of Kent International.

I know Arnold Kamler, and have the greatest respect for him and his company, which includes Bicycle Corporation of America (BCA), the largest American bicycle assembly plant located in Manning, SC. Walmart is BCA’s largest customer.

Allied Cycle Works is a DTC, high-end carbon fiber brand that has an excellent reputation and product that is in demand because it is hand-built in Bentonville Arkansas. Allied is owned by RZC Investments, a Walton company.

Game Composites manufactures carbon fiber sport airplanes located at the Northwest Arkansas regional airport. These are top-of-the-line, and expensive even by the standards of the stunt flying aficionados who line up to purchase them. Game Composites is owned in whole or part by the Walton family.

I first want to wish Arnold Kamler congratulations on his 50th year in the bicycle business!

Next I will point out the obvious: BCA is assembling 250,000 to 300,000 bicycles for Walmart annually in a modern facility that is capable of complete manufacturing, which means fabricating frames and forks, in addition to wheels and finishing, as well as assembling and packaging them in multiple shifts with capacity that could total 1 million units per year.

There are multiple reasons for not ramping up production, including frame and fork fabrication. While each can be overcome, particularly with the help of a retailer of Walmart’s size, Arnold will be the first to tell you that none of the solutions are easy, none were discussed at the conference, and all are years away.

The gap between the portion of the American bicycle market that Allied Cycles serves, and the portion that BCA serves, is where the business lives. It is also where it will have to adapt to change if it is going to survive.

The total lack of discussion of the innovations and creative thinking (the “aspirations”) that will be needed to actually achieve a combination of decoupling from Asian sourcing, near-shoring and reshoring, sums up why I still take exception to the way PFB framed In America and the post-pandemic reimagining of “manufacturing and assembly based in the U.S.”

As to my prediction that PFB will migrate from Boulder to Bentonville, I think it is inevitable given the financial momentum. The bike shop channel of trade needs to rethink its relationship with all the other channels of trade for bicycles, and change with consumer wants and needs to adapt to Walton Foundation and Walmart leadership.

This includes the bike shop channel of trade standing up for why it is an essential part of the bicycle business, and what role it will play in the economics of profitability going forward.

Contact Jay Townley,


Human Powered Solutions (HPS) analysis points to e-bikes and micromobility, including e-scooters, as the future of sustainable transportation. We are committed advocates. This also means HPS is dedicated to the safe use and management of lithium-ion battery propulsion systems.

HPS Chief Technology Officer Mike Fritz has written protocols for bike shops about safe charging and storage of the lithium-ion batteries that are the power source for e-bikes, the emerging product category that has taken the American bicycle market and business by storm since the pandemic started in March of 2020.

Mike wrote these protocols for the National Bicycle Dealers Association (NBDA) because he and Heather Mason, president of the NBDA, recognized the potential hazard lithium-Ion batteries represent if they are not handled, charged and stored with care.

You can access the protocols for bike shops and consumers on the HPS and NBDA websites: /

As Mike has pointed out on numerous occasions, society has learned to safely manage gasoline, and we need to educate retailers and the consuming public about safely managing lithium-ion batteries. The majority of lithium-ion battery propulsion systems are well designed and configured. If managed properly they are perfectly safe. The added factor is the manufacturing of lithium-ion batteries, the quality standards applied to the process, and the testing and certification after manufacturing.

Heather Mason has reached out to HPS and Mike Fritz to provide technical expertise and input on the need bike shops have to properly manage lithium-ion batteries beyond the Call2Recycle initiative introduced by PeopleForBikes, including a series of informational and educational NBDA webinars providing the technical detail behind the protocols and best practices for bike shops.

One such webinar is scheduled for Friday, November 4. For more information and to register, visit this page on

Over the last 30 months, the subject of micromobility lithium-ion battery fires has popped up from time to time in the media, on trade websites, and in trade publications. The latest that prompted this article was published by NPR October 30 with the headline “Fires from exploding e-bike batteries multiply in NYC – sometimes fatally.”

HPS analysis indicates there is a safety problem emanating from a breakdown in U.S. regulatory and testing of lithium-ion power systems for e-bikes, and a lack of interest in the whole market and the complete community of interest by not educating beyond specified channels of trade. I will do my best to explain further.  

The caption to this picture from the subject article states: “New York City is on track to experience twice as many e-bike-related fires this year compared to last.”

HPS and the NBDA have been and are currently actively engaged with the New York Fire Department, New York City Council, UL, and Energy Storage Safety Products International, in researching and getting educated about the micromobility lithium-ion battery situation in New York City. HPS suggests the rest of the bicycle business should also be actively engaged.

We found early on that the consumer demand for take-out food orders and home delivery has created a gig work force estimated by Los Deliveristas Unidos (LDU), the representative association (, to be in excess of 65,000 self-employed workers who ride either an e-bike or an e-scooter.

HPS also found that the self-employed delivery workers are poorly compensated, and often live in high-rise tenements and subsidized NYC housing, often in crowded, extended-family situations. Fear of vandalism and theft force storage and charging of e-bikes and e-scooters into bedrooms and hallways that too often block exits.

These conditions are too often exacerbated by the self-employed gig workers seeking out the lowest cost e-bikes or e-scooters they can purchase, often consumer-direct on the Internet. Replacement batteries and chargers are also too often purchased online because of the low prices offered.

While this hasn’t been proven yet, HPS has a strong belief based on the facts we have found that low-cost (US$800 and below) e-bikes, and low-cost lithium-ion replacement batteries (US$500 and below), are suspect, and can have inherent quality issues. Introducing a battery or charger to a lithium-ion power system that is not properly integrated to that specific system is also inherently dangerous. In addition, refurbished and home-made lithium-ion batteries should never be used.

NBDA has started to publish a series of best practices for bike shops that integrate the protocols mentioned previously with practical business practices, such as asking all suppliers of merchandise and parts for certificates of insurance.

The October 30 NPR article opens with, “Four times a week on average, an e-bike or e-scooter battery catches fire in New York City.” It goes on to report, “Sometimes it does so on the street, but more often it happens when the owner is recharging the lithium ion battery. A mismatched charger won’t always turn off automatically when the battery’s fully charged, and keeps heating up. Or, the highly flammable electrolyte inside the battery’s cells leaks out of its casing and ignites, setting off a chain reaction.”

A lithium-ion battery fire literally destroys the battery, and this picture from the FDNY is captioned: “E-bike batteries are made up of numerous ‘cells,’ each a bit larger than an AA battery. If they are damaged and leak fluid, they can easily combust.” Advocating for testing and certifying to voluntary standards like UL 2849 would be a huge step in establishing a bright line between good and suspect lithium-ion battery propulsion systems.

As of Friday, October 28, the FDNY investigated 174 battery fires, positioning 2022 to double the 104 fires that occurred in 2021, and quadrupling the 44 from 2020.

This important data generated by the FDNY underscores the immediate problem, but does not tell the story behind the data, nor does it recommend lasting solutions. HPS and the NBDA will continue to work for and advocate for fair and equitable answers that guarantee all citizens of New York City will be able to continue safe use of e-bikes and e-scooters for transportation and to make a living.

We are asking the rest of the American bicycle business to join us!

Contact Jay Townley at


“The golden age of globalization that we experienced in the last 30 years since the end of the Cold War has ended clearly and we are entering a new era, a new era that will be marked by greater geopolitical contestation,“ said Singapore’s Deputy Minister for Finance Lawrence Wong at the Forbes Global CEO Conference September 26.

Singapore has been an important manufacturing location in Asia for Shimano bicycle components. The company established Shimano Singapore Pte. Ltd. in 1973, and a sales office for all of Asia in 1996.

Wong’s opinion was taken very seriously by the attendees at the conference, and the members of ASEAN, the Association of Southeast Asian Nations of 10 states including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, half of which have become source countries for bicycles as brands moved sourcing from China starting just before the pandemic.

Wong’s statement kept coming back to me since I first read it. The company I worked for, Schwinn, had reached out to the global supply chain during the Bike Boom from 1971-1974 to import up to 250,000 lightweight Schwinn-approved bicycles from Japan to supplement the 1 million bicycles it produced in the U.S.

After the Bike Boom and during the shakeout from 1975 to 1980, Schwinn found itself in a financial situation that resulted in totally shutting down domestic production and out-sourcing 90 percent of its products to Giant in Taiwan, taking full advantage of globalization.

Ten years later, Schwinn followed the Taiwanese bicycle industry and globalization in sourcing in China. Several bankruptcies followed Schwinn over the next 30 years, until the brand was acquired as a part of PON Holdings acquisition of Dorel Sports from Dorel Industries in October 2021.

When the pandemic started in March 2020, the American bicycle business was totally import dependent, and 95 percent of all bicycles sold in the country were imported, primarily from China. In other words, the American bicycle business was totally dependent on globalization and the global supply chain.

COVID-19 accelerated changes in both the world and the American bicycle business. I have described the industry of the last 20 years as a pleasant place that changed with the seasons, but with very little of any real disruption beyond that. Rick Vosper has accurately described the state of “perfect competition” that prevailed from 2000 to March 2020.

The bicycle business in the U.S. became comfortable with Chinese holidays and planned its activities, including model year changes, around the Lunar New Year. Lead time for finished goods was a consistent 45 days from date of a firm order to sealing the container at the factory. Ocean freight rates and in-transit times fluctuated within a narrow band of predictability, with the occasional labor dispute, storm in the Pacific or economic hiccup.

You may have heard of the McDonald’s theory. It goes like this: where we have McDonald’s everywhere, the more we trade and invest in each other, the more we tamp down geopolitical rivalry and the less likely there will be contestation and war. This also served as a way to explain globalization. After March 2020, the McDonald’s theory became history and ushered in the end of the golden age of globalization with the pandemic induced by COVID-19, followed by the invasion of the Ukraine.

A fundamental change in the way the world works is underway, including product sourcing. Countries have not fully retreated into protectionism, but businesses are being increasingly influenced by geopolitical tensions leading to friend-shoring, near-shoring and re-shoring, all intending to shorten supply chains and bring manufacturing closer to consumers.  

It is ironic that Taiwan is still the center of the American bicycle business in Asia that leads China and the other ASEAN countries, while the geopolitical tension between Taiwan and China have triggered near-shoring, including interest in Chinese manufacturing enclaves in Mexico.

Some things that COVID broke can be fixed, but others are changed forever. The supply chain is still screwed up, primarily by China’s COVID zero-tolerance policy that has worn out its people with sporadic lockdowns affecting millions of people, workers and factories over the last 31 months, with no end in sight. Bicycle manufacturing facilities, component supply and raw materials are all affected, as are ports of entry and related U.S. logistics. The supply chain is one of the things that will be fixed, or at least will get better over time.

Lead time will be an early indicator of the supply chain getting better. I still marvel at the ability of the bicycle business to seemingly ignore the inventory that has been amassed in what I believe is every nook and cranny that the global bicycle supply chain has possessed, caused to be constructed, and has leased and rented over the last four quarters.

I have already related the observations of a friend who attended Taichung Bike Week and reported hoarding of components by OEMs. Firsthand reports describe domestic warehouses filled to capacity with finished goods, and recent specialty bicycle retail channel inventory reports of five units in inventory for every one being sold at retail. These trends are not showing up in the American trade press, but they do foretell what we predict is a shakeout that is already underway as lead times begin to melt away.

One of my HPS partners told me last week about a large dealer who recently sold all of their excess inventory of a top-tier component brand for about 10 percent over cost. The transaction was with another dealer who came in and handed over cash. The dealer who sold the components enhanced cash flow. The dealer who purchased the components has an opportunity to realize an above average profit and still sell below MSRP. This is an example of a component brand and its distributors having lost control in the marketplace, which is part of the definition of a shakeout.

Shipping costs from China to the U.S. have plummeted. Despite the erratic behavior of Chinese-based sourcing in the short-term, shipping costs for containers from China to the U.S. have plummeted recently. Ocean shipping companies have responded by cancelling dozens of sailings, adding to the uncertainty, although at a lower cost. It should also be noted that lower shipping costs will not reduce the landed cost of the goods already in U.S. inventory.

The New York Fed measure of global supply chain pressure, which is an index weighing delivery times, backlogs and inventories, is back down to levels last seen at the end of 2020.

Labor disputes still simmer. One of the rail worker unions has rejected the tentative agreement worked out by the Secretary of Labor and the White House, so there is now a renewed degree of concern about a settlement, dialing up the uncertainty.

There is still no labor contract between the U.S. West Coast ports and the dockworkers, and the Secretary of Labor reports a settlement is moving forward. There are also no current threats of work slowdowns or stoppages. However, this is another pain point on the uncertainty index. Stay tuned.

Warehousing has peaked in the sense that U.S. bicycle brand finished goods and aftermarket warehouses appear to be full to overflowing, as is contract and leased warehouse space. However, the demand overall has slowed, and the big players like Amazon are pulling back on expansion plans, as well as cancelling some warehouse and distribution center construction.

Inventory is too high. As we have said several times, bicycle finished goods inventory in the U.S. is high, but not balanced because certain models and categories are still either out of stock or in short supply. Top tier brands are informing their dealers that backorders still cannot be canceled, as they are taking in the shipments they could not cancel or change, and begin to roll out 2023 model offerings.

With this said, it now appears that brands and suppliers have dramatically slowed and adjusted orders and in-bound shipments, and are focusing on reducing the inventory they have built up since the last quarter of 2021 and into the first half of 2022.

Inflation is also driving global markets, economies and consumer demand. The Institute of International Finance calculates that inflation is now driven by the energy shock from the Ukraine war rather than the cost of supply disruption.

The bicycle business stands out as an early indicator of reduced consumer demand beginning the last quarter of 2021, at a time when consumer purchasing was shifting from goods to services, but remained robust in the face of the highest inflation in decades.

Jennifer Bisceglie, CEO of the supply chain consultancy Interos, says it’s about buying behavior. “First, consumers don’t need the same hard goods: they’re back doing travel, they’re back to buying services. The second is there’s so much uncertainty in the economy and there’s inflation. The third is that companies are sitting on inventory and so there isn’t the same throughput.”

What this amounts to is that bicycle brands and their dealers paid the highest prices they have ever paid for finished goods, as well as the highest cost of shipping that they have ever paid, and many of those goods remain in warehouses unsold because consumer demand has receded to the lowest level since, we are told, 2015.

Shakeout is a term used in business and economics to describe the consolidation of an industry or sector, in which businesses are eliminated or acquired through competitive pressure. 

HPS is of the opinion that the American bicycle business has entered a shakeout that could last from three to five years. This coincides with the end of the golden age of globalization, and the new era of realignment and reconfiguring bicycle business supply chains to supply networks or supply ecosystems, as Alan Beattie, author of the Trade Secrets newsletter, has opined.

Shakeouts can often occur after an industry has experienced a period of rapid growth in demand followed by over-expansion by brands and retailers.

In short, a shakeout is a business situation in which people lose their jobs, and companies go out of business, because of economic difficulties.

There is good news in the new adult bicycle riding participants who started cycling for the first time on the bicycles they purchased during the pandemic. However, purchases have slowed appreciably, and there is no indication of when they will either resume or increase.

The NBDA consumer research published this year has provided insight into both the new adult cyclists and returning adult cyclists. Future consumer research conducted by the dealer association will bring clarity to the questions of what bicycles adults will purchase and when going forward.

E-bikes have changed the rest of the game. What the current NBDA consumer research does clearly show is that e-bikes have changed and expanded bicycle design and style, one-step distribution focusing on direct to consumer (DTC), as well as sophistication and technical complexity, including risk management of electrical propulsion systems.

Just as the golden age of globalization is ending, and that “pleasant place that changes with the seasons” fades away, the American bicycle business is entering a new era of supply networks or supply ecosystems, propelled forward by e-bikes and the new bicycling consumer that they have brought to the marketplace.

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I had planned a different subject for this month’s newsletter article, but after several phone and Zoom conversations over the last two days, I find myself compelled to write about a topic I haven’t visited in at least two decades — a full blown shakeout in the specialty bicycle retail channel of trade.

Shakeout is a term used in business and economics to describe the consolidation of an industry or sector, in which businesses are eliminated or acquired through competitive pressure. It may also refer to a situation in which many investors exit their positions, often at a loss, due to uncertainty in the market or recent bad news.

Shakeouts can often occur after an industry has experienced a period of rapid growth in demand followed by overexpansion by brands and retailers. Large, diversified companies are often most able to endure a weak business climate and can benefit from shakeouts.

In short, a shakeout is a business situation in which people lose their jobs, and companies go out of business, because of economic difficulties.

On June 29 a BRAIN article informed the bicycle business that “Saris Cycling Group, a victim of the ‘COVID whiplash,’ restructures for sale.” That was three months ago, almost to the day. In between we have been informed of companies laying off employees, reducing staff and cutting overhead, but nothing that could be considered extreme.

However, I believe that is about to change, and not for the better. In the last 48 hours we have heard of brands and suppliers that can’t collect past-due invoices from bike shops, and bike shops that are laying off staff and cutting expenses because they have excess inventory and are not able to pay their bills.

You probably already know this, but the specialty bicycle retail channel of trade in the U.S. is the only channel selling bicycles through two-step distribution. The brands buy bicycles from original equipment manufactures’ (OEMs) mostly located in Asia, and pay them by letter of credit or wire transfer. They then receive and warehouse the bicycles, sell them to retailers, and are paid or extend credit, and are paid according to the terms of that credit agreement.

While there are variations of the other bicycle distribution systems, they are typically some form of one-step distribution whereby the retailer purchases from the brand owner, who in turn may have the bicycles produced by a contract OEM, but the payment is generally some form of LC or wire transfer with the bicycles shipped to the retailer’s warehouse or store.

I don’t mean to bore you with these one and two-step distribution details. I only reference them because they represent the greatest financial difference between the bicycle retail channels of trade in this country. They are the economic reason a shakeout is so devastating to the bike shop channel of trade.

The mass merchant channel of trade (Walmart, Target et al), have already gone through their pain of excess inventory, and made their order adjustment upstream in the form of order delays and cancellations because they deal, for the most part, directly with the companies that own the brands, who in turn manage the OEMs.

The specialty bicycle retail channel of trade, on the other hand, has not dealt well with its excess inventory issue because the brands that deal with the OEMs have maintained their distance from the thousands of small, and for the most part, independent bike shops that sell their bicycles to consumers.

The financial wrecking ball, known as a shakeout, is between the specialty bicycle retail brands and their dealers, with the pain of laying off staff, downsizing, having to sell, liquidate or go into bankruptcy, spreading upstream to brands and downstream to bike shops.

Unfortunately, the financial winter that is coming could not be avoided once the bullwhip effect had led to hoarding up and down the specialty bicycle retail channel of trade. Some of the pain could have been ameliorated if the brands had communicated and been honest with their retailers and established plans for paying down debt and merchandising bicycles with the best possible profit margins for everyone in the supply chain.

As for the American industry association, it has in our opinion already pivoted to the mass merchant channel for financial support. This doesn’t mean walking away from the specialty bicycle retail channel and brands, but it does mean recognizing the reality of the shakeout that has just begun. If you want confirmation, check out the complete list of current sponsors of the upcoming SHIFT 22 BLC in Bentonville, Arkansas, this coming month.

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Back on September 12 I finalized my airline reservation to and from Bentonville, Arkansas, a midsize community that I had only read about and learned a little about from my daughter, a long-time Walmart employee, who a decade ago was selected by her store to attend an employee event for associates, all expenses paid.

My interest is the upcoming PeopleForBikes SHIFT 22 Conference October 18-20 that I will be attending with my partner, Mike Fritz, representing Human Powered Solutions, a member of PeopleForBikes.

Imagine my surprise September 19 when I did my daily reading of publications and articles (online, I might add). I found Alan Murray, CEO of Fortune, started his column with, “I was in Bentonville, Arkansas last week for the first time in 15 years, and was surprised to find what a lively little town it has become.”

He points out that “Much of the credit for Bentonville’s renaissance, of course, goes to the Walton family, which has invested heavily in the town, including building a world-class museum – Crystal Bridges…”

In that museum, Murray found Walmart founder Sam Walton’s 10 rules of business posted on the wall. Because he felt they “…still seem to strike all the right chords,” he listed them in his column, and I am providing them here:

  • Commit to your business.
  • Share your profits with your associates.
  • Motivate your partners.
  • Communicate everything you possibly can to your partners.
  • Appreciate everything your associates do for the business.
  • Celebrate your successes.
  • Listen to everyone in your company.
  • Exceed your customers’ expectations.
  • Control your expenses better than your competition.
  • Swim upstream.

I respectfully suggest there is a lot to be learned from these 10 rules of business, and the Crystal Bridges museum is on my list of places to visit while I am in Bentonville this month.

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COVID-19 and the pandemic accelerated the changes in our world over the last 31 months. Getting back to “normal” is no longer possible. Going forward there are some things that COVID broke that can possibly be fixed, but others are either changed, or gone forever.

President Biden has declared the pandemic over for America, but as those of us in the bicycle business know, we are still caught up in a COVID economy and supply chain that begins in a China periodically strangled by an ongoing zero tolerance policy that locks down millions of workers, and disrupting thousands of factories and supply chains for weeks at a time.

In this new global economy, the bicycle business has quickly adapted to increasing costs and inflation, but now must cope with decreasing and shifting consumer demand and preferences and a glut of inventory.

Yogi Berra’s quote (whether he actually said it or not) is very relevant in that the bicycle business is giving off every indication right now that it really doesn’t know where it is going, other than headed for an apparent shakeout.

Starting with the supply chain that is still messed up, the business is doing nothing to sort out the misleading lead times that are currently being quoted and communicated to both retailers and consumers.

At this writing, we are at the end of September and about to begin the fourth and final quarter of 2022. The “official” lead times are still out into late 2023 and early 2024, with some new componentry pushed to early 2025. We submit that this, at best, is simply not correct, and is detrimental to fixing that which can be fixed in the supply chain.

Recent visitors from America to the recent Taichung Bike Week tell us that they have observed what appears to be “hoarding” of componentry on the part of Taiwanese OEMs.

We also have first-hand reports indicating that while “official” lead times are still out months, if you come to an OEM with a legitimate LC-backed firm order, they can shorten and improve delivery lead times substantially.

We know of a brand that needed several hundred of a component to service a recall, and the supplier was able to guarantee shipment from Asia in about two weeks.

The point is the bicycle business is doing nothing to communicate the truth about lead times to the trade or consumers. Doing so would assist most brands, suppliers and retailers in fact-based business planning, replenishment and merchandising.

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Alan Murray, chief executive officer of Fortune, wrote this past week about a new book by Bill George, former Medtronic CEO, written with millennial entrepreneur Zach Clayton. It’s called: True North: Emerging Leader Edition.

Murray interviewed Bill George and asked him why this new millennial edition of True North was needed. George’s response was “We are witnessing a massive change in leadership from the Baby Boomers who have dominated for the past 30 years, to emerging leaders, which include Gen X, Millennials and Gen Z. The Baby Boomers’ style of command-and-control leadership is dead. Younger employees simply will not accept it or they will quit, which has contributed to the Great Resignation.

“Emerging leaders are moral leaders who are guided by a strong sense of purpose and values. They seek alignment with organizations whose purpose and values are congruent with their own. They focus on empowering their teammates and coaching them to reach their full potential.

“They practice a fully inclusive style of leadership, appreciating others for who they are regardless of external differences such as gender, race, religion, national origin or sexual identity. They have led through the crises of the past two decades and are better prepared to lead through today’s multiple, intersecting crises. They are committed to meeting the needs of all their stakeholders, and willing to take stands on moral issues, based on their purpose and values.”

I don’t know about you, but this long response sent chills up my spine. I was born in 1943, so I am slightly older than the Baby Boom generation. I know Bill George wants to sell his book, but his observation that we are “…witnessing a massive change in leadership from the Baby Boomers who have dominated for the past 30 years, to emerging leaders, which include Gen X, Millennials and Gen Z ” is exactly where the U.S. bicycle business is as it emerges from the pandemic-driven surge that has changed the business forever.

Recent announcements of company and brand leadership changes give proof to this change in leadership including the recent announcement by Outside Interactive that 37-year-old Alan Crisp has been appointed vice president and general manager of its Cycling Group, including Bicycle Retailer and Industry News.

As the Resident Futurist at Human Powered Solutions my job is to sort through emerging trends and see where they fit, like a puzzle piece, in the future. Bill George has identified an emerging leadership trend that has embraced the U.S. bicycle business as it struggles to absorb and understand unprecedented changes and shifts in consumer purchasing, design and use demographics and preferences.

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