Crypto News: Supply Lines: Chain Reaction

During the pandemic, people worldwide rediscovered biking, relishing any chance to get out of the house while avoiding commuting on crowded subways.

As bicycle sales in Europe jumped, retailers that had grown dependent on Asian suppliers struggled to meet demand. For Emre Ozgunes, that presented an opportunity.

He's the general manager of Carbon Team, a Portuguese manufacturer of carbon-fiber frames for bicycles that cost €5,000, ($5,400) or more, and is betting he can gain an edge over producers in Asia by offering faster delivery times.

Ozgunes says Carbon Team can deliver frames within six months of receiving a client's design, while for an Asian competitor it would take three times as long.

Portugal in 2019 unseated Italy to become Europe's biggest bicycle manufacturer, though its 2021 production of 2.9 million bikes remains behind what producers in Asia exported to Europe.

Europeans bought as many as 1 million carbon frames last year, but fewer than 30,000 were manufactured in the region, according to Conebi, a trade group for European bike producers. By 2030, Conebi predicts, up to 20% of carbon frames sold in the region could be manufactured there.

Aiming to become Europe's biggest maker of carbon frames, Ozgunes says production will jump to 18,000 frames in 2024 from 3,500 last year.

In some respects, Ozgunes remains dependent on lengthy supply chains. The carbon fiber he uses is produced in Japan and then shipped to Italy for processing before coming to Portugal. He says that while he has seen some hiccups in obtaining a few specialized types of carbon fiber, the arrangement hasn't created any insurmountable obstacles.

For Ozgunes' bike-maker customers, things are more complicated. Even if the frame is made in Europe, components typically come from Asia, and it can take as long as two years to get many of those items, so Ozgunes says some clients are looking for producers closer to home.

He says one European bike maker had to cancel an order of 300 frames for delivery in January because it couldn't get parts.

"Clients aren't only thinking about frames," Ozgunes says. "Even if Carbon Team is the fastest supplier in the world, that's no use if they don't have components."

— Joao Lima in Lisbon

Cruise business | The Port of Los Angeles is kicking off plans to boost its cruise-related business as the number of sailings bounces back to levels not seen since before the Great Recession. The hub has already seen a post-pandemic cruise-industry rebound, with 229 cruise ship calls in 2022, the most since 2008. The port estimates that number will rise to 250 by 2026, and will include larger ships with more passengers. Each ship that calls at the port generates $1 million for the local economy, it said. The proposal would add an outer-harbor cruise terminal and redevelop the port's existing inner-harbor facility. The announcement for the project, which would cost more than $600 million and be funded by public and private investment, comes as cargo volumes plummet. Comments for the draft request for proposals are due March 3.

US-China relationship | The US keeps saying it wants to set a "floor" under the relationship with China. Its recent moves against Beijing and new pressure from Congress make achieving that look increasingly unlikely.
Foreign trade challenge | China's foreign trade environment is "extremely severe" and the outlook for investment is also challenging this year as the global economy slows and faces uncertainty, according to Ministry of Commerce officials.
Shipments detained | The US is beginning to detain imports of aluminum products suspected of being made through forced labor, particularly from China's Xinjiang region, according to one of the world's biggest shipping firms.
Job cuts | FedEx is cutting global officer and director jobs by more than 10%, the courier's latest cost-saving measure as economic concerns and waning e-commerce weigh on demand for package delivery.
Storm disruption | Nearly 300,000 homes and businesses in Texas are without electricity as a winter storm dumps ice across the region, downing power lines and disrupting flights.
Gauge falls | The US manufacturing downturn deepened last month, fueled by a further pullback in orders and factory production.
Illegal trade | With egg prices surging in the US, some Americans are trying to lower their grocery bills by buying them south of the border. The only problem: It's illegal to bring them back into the country, and now seizures of eggs at some US-Mexico border crossings have surged more than 300%.

Back to normal | Old Dominion expects its volume to pick up as early as March and could resume typical seasonal patterns after grappling with volatility from pandemic-fueled supply-chain challenges, Bloomberg Intelligence says. The company's growth should continue to outpace the market, given its position as a leader in less-than-truckload services.
Past peak | Global potash prices, down 25% in the fourth quarter, could slide further in the first half as farmers curb consumption and inventories build, signaling a supply-chain refill, Bloomberg Intelligence says.
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