Chinese New Year - The Impact on Global Supply Chains and Logistics
by Zaur Mansurov
This year, Chinese New Year (CNY) falls on 12 February. Chinese New Year, also known as Lunar New Year or Spring Festival, is China’s most important festival and the largest annual mass migration on the planet. It is the biggest and the most celebrated festival in China where people celebrate the beginning of a new lunar year with their families and friends. The week-long national public holiday has several consequences and impact on global supply chains and logistics.
In this article we will give you all possible insights of its impact on your supply chain and logistics, along with some recommendations on how to be best prepared.
The following information provides an overview of some key facts about the festival and the possible impacts on supply chain & logistics.
Main dates and additional info:
- 12 February: it is determined by the lunar calendar and its date changes every year – it signals the start of the Chinese Lunar New Year (this year is the Year of the Ox).
- This Chinese national holiday will this year begin on 11 February and will end on 17 February. Most businesses, including Bertling branches in China, will be closed and resume business on 18 February.
- Most factories and production sites might be closed for a longer period of time. Actual production might pause one week before the Chinese New Year, with some factories resuming a month after all celebrations.
- There are two celebrations that occur during this time, the ‘official holiday’ and the ‘traditional holiday’. As a result of this, some factories will finish earlier than others and take longer time off. Some suppliers are off for more than a month and each individual supplier could have their own closure dates (please always reconfirm with your suppliers on their actual holidays dates, as those might vary).
- This long holiday allows workers in the big cities to travel back to their hometowns for family celebrations and reunion. The ‘chunyun’ (spring migration) is the biggest mass movement of people in the world. Though it might not be the case this year due to the COVID-19 pandemic and restrictions imposed by local governments.
1.3+ billion people go on holidays at the same time – its impact on supply chain & logistics and some possible solutions:
- Preparation and Planning are the key elements. These are important because shippers and our customers should/must plan to build up sufficient inventory stock to cover their business needs for up to a month following the Chinese New Year holiday. For customers with higher volumes, it is equally important to communicate a forecast of your expected cargo to Bertling Logistics. This means you can ensure that we too can also plan ahead to support all your logistics needs.
- Shipments must be at the port of loading in China at least ten days prior to the start of the Chinese New Year – otherwise you might encounter unnecessary storage charges at sea and airports. In addition, all shipments must be booked at least two weeks in advance as space fills up extremely quickly. Shipments planned for shipping after the holiday will often ship a week after the port’s reopening.
- New Year celebrations in China can lead to delays to your shipments for up to one month. Inform Bertling Logistics about your priority shipments in advance or as soon as possible, in case there are only very limited spaces available.
- Longer production and quotation times: Production time will be delayed and quotation requests may take longer to process.
- Limited sailings and ‘blank’ sailings during this festive season, create a ‘bottleneck effect’ with shortage of available space and increased freight rates. Reserve space in advance for sea freight and transport cargo on passenger flights for shipments which cannot be delayed. The rates are slightly higher but this will keep your supply chain running smoothly.
- Due to the above mentioned closing period of manufacturing and other industries, there will be no productions from China for at least a week. Even though factories will be restarting gradually, operations will not resume to full swing immediately.
- Productions from other countries in Asia will also be impacted as some parts might come from China or the assembling processes are done there.
- Most shippers will stock up inventories that are sufficient to cover the Chinese New Year period, this leads to a pre-holiday cargo rush; it will also take some time after the festival to normalise the market conditions.
- Moreover, the holiday also impacts other countries in South East Asia which means further implications to your transportation needs across the entire region. Accordingly, many businesses will look to pull forward their shipping needs which in turn creates capacity crunches and congestion issues in the lead up to Chinese New Year.
To avoid unnecessary and costly delays, product shortages and price hikes on freight services, we strongly recommend you place bookings well in advance. Reach out to us and feel free to discuss all your logistics needs, so we can offer the best way to prepare and maintain your supply chain & logistics are uninterrupted and run smoothly throughout the Chinese New Year. Freight forwarding and logistics experts at Bertling Logistics can guide, assist and help you to plan for your needs. We deliver our promise.
Holiday schedules for selected countries in the Asia-Pacific region:
- Mainland China – CNY – February 11th-17th
- Hong Kong – CNY – February 12th-15th
- Korea – Lunar New Year Holiday – February 11th-15th
- Singapore – CNY – February 12th-13th
- Indonesia – CNY – February 12th
- Taiwan – CNY – February 11th-16th
- Vietnam – Lunar New Year – February 11th-16th
- Malaysia – CNY – February 12th-13th
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