Steps To Prepare Your Supply Chain For The Chinese New Year
Staff | M.E. Dey & Co.
When is Chinese New Year 2019?
Chinese New Year, also known as the Lunar New Year or Spring Festival, is the biggest Chinese celebration of the year. In 2019, Chinese New Year (CNY) will take place February 3rd-9th.
What will Chinese New Year closures look like?
Chinese New Year has a significant impact on international shipping because factories, ports and many other businesses close down as workers travel long distances to spend time with family and friends. Most operations are closed the entire week of Chinese New Year but additional delays and disruptions often occur in the weeks before and after.
The majority of workers in China’s eastern industrial areas are migrants from distant rural areas in the west. As a result, Chinese operations typically seize a week prior to the Chinese New Year to allow for the extended holiday travel. In the weeks following the holiday, businesses never know how many of their laborers will return since many seek new opportunities and higher wages during this time; expect at least a 2-3 week delay following the holiday celebrations as businesses work to operate at maximum capacity.
How does the Chinese New Year affect shipping and rates?
In anticipation of the holiday, ocean and air freight rates will increase significantly. Rates should start to normalize 1-2 weeks after Chinese New Year. Additionally, space will become more difficult to secure and carriers will be overbooked earlier than usual. Trucking will be also difficult to secure before CNY and services will be more expensive.
How can I prepare for the Chinese New Year?
To lessen the financial impact to your business it’s strongly advised to plan ahead. Consider increasing production in the months leading up to the holiday by taking stock of how much inventory is needed in January/February and spread that amount over the months previous. In the weeks leading up to the Chinese New Year, check in with your suppliers more frequently to ensure deadlines and quality standards are met. Timelines can often shift during this time and unfortunately quality may also suffer since factories are working tirelessly to fulfill orders before departing for the holiday.
From a logistics standpoint, book your transportation at least three weeks prior to the Chinese New Year. If shipping multiple containers it may be beneficial to diversify among several bills of lading. This way, if a shipment is delayed it won’t impact all of your containers. If working against a tight deadline or you are running out of stock, consider shipping by air. More often than not, however, the fastest transit-time services are overbooked during this time of year. If you can afford some flexibility, consider a service with a slightly longer transit time to lessen the chance of your cargo being rolled over to the following week.
In addition to planning ahead and exploring alternative shipping methods, the next best way to prepare for the Chinese New Year is to increase communication with your international partners and hire a reputable freight forwarder to help navigate the waters during this hectic time of year. With over 100 years of experience and a robust global network, M.E. Dey & Co. offers a full range of logistics services to ensure your domestic operations run smoothly. To learn more about how we can help visit our Contact Us page to get in touch or Request Quote to start planning your international shipments.
We wish all of our friends, partners, and customers a happy and healthy new year.