How port congestion has impacted one company specifically
As the pandemic continues, more and more people are turning to home workouts. Peloton bike orders have rocketed, but delivery delays are a major problem. Andrew Cox and Seth Holm break down why these delays are happening and how it’s affecting business.
But first, it’s time for “you care or nah?” and the first topic up for debate is Marc Lore’s departure from Walmart. Holm thinks the company has made major strides toward becoming an e-commerce giant and Lore is only capitalizing on expanding his resume.
Another electric vehicle SPAC has emerged, with Lion Electric planning to focus on electric school buses; both Holm and Cox care, especially with a Biden administration plan to put more electric school buses on the roads.
Next up is the recently announced import ban from a specific province of China, and both guys care about it. The Trump administration announced this ban of cotton and tomatoes from Xinjiang province due to allegations of use of forced labor for production.
Fiat Chrysler and PSA Group have merged into Stellantis and Holm says this is a good merger to watch, but Cox thinks differently. Cox says due to the majority of the manufacturers in Stellantis being in the European market, the merger will not have a large impact on the U.S. market.
Lastly, industrial production beat predictions for the last weeks of 2020, and both guys think this is a great indicator of economic health, especially for the transportation sector.
Now to problems at the ports: Backlogs of freight are still “exorbitant,” according to Cox, and Peloton is just one company that has seen major impacts from shipping delays. Peloton customers started seeing delays as early as November before the holiday season.
Holm says the company was not prepared for the extreme demand for its treadmills and bikes, quoting people 10-12 weeks for delivery. Customers are now being notified on their original delivery date of deliveries delayed sometimes up to two months.
Peloton is playing a blame game, placing fault on its last-mile services XPO and J.B. Hunt. Holm says some of the blame also lies with manufacturing in China, but with the port problems as well.
Cox says this is detrimental to the brand as Peloton “fights for a place in consumers’ lives,” as the at-home workout craze might dwindle as people get vaccinated and return to normal exercise life.
You can find more Great Quarter, Guys recaps and recaps for all our live podcasts here.