Prepare for Chinese New Year: A Supply Chain Guide

As the festive season approaches, leading up to the the start of Chinese New Year 2024. Strategic planning is key to preventing disruptions in your supply chain during the two-week shutdown.

What is Chinese New Year?:

Chinese New Year (CNY), also known as the Spring Festival, is the most celebrated traditional Chinese holiday. It marks the beginning of the Lunar New Year and typically falls between January 21 and February 20. The festivities last for 15 days, with the most significant celebrations occurring on the eve and the first few days of the Lunar New Year.

This year, the CNY will start on February 9 (Friday); the main festival will take place on February 10 (Saturday). The festivities will conclude with the Lantern Festival on February 24 (Saturday).

Here’s a comprehensive timeline and factors to consider:

📅 End of January: Deadline for Shipping
To avoid delays, ensure your shipments are dispatched before Chinese New Year kicks off.

🚚 Early February: Workforce Departure
Be aware that around early February, the entire workforce typically departs from factories, impacting operations.

🎆 February 10th: Official Chinese New Year
The official start of Chinese New Year. Plan accordingly for the factory shutdown.

📆 End of February: Workforce Returns
By the end of February, the majority of employees are expected to return to work.

🌐 Start of March: Operations Return to Normal
Operations are anticipated to largely return to normal at the beginning of March.

🚢 Factors Affecting Goods Flow:

Shipping Delays – Reduced operations can lead to production and shipment delays.

Port Congestion – Increased shipping activities may cause congestion at ports.

Container Shortages – High demand and delayed returns may lead to container shortages.

Increased Shipping Costs – Freight rates may rise due to heightened demand and delays.

Supply Chain Disruptions – Factory shutdowns can impact the delivery of raw materials and goods.

Labour Shortages – Celebrations lead to temporary labour shortages affecting various industries.

Extended Lead Times – Orders may experience delays in production and shipping schedules.

Shipping Strategies For Chinese New Year:

To reduce the impact of Lunar New Year on shipping, businesses can take proactive measures:

Plan Ahead – Anticipate the increased demand and congestion by pre-booking containers or vessel space well in advance. CNY effects might take up to 6 weeks, so consider planning well ahead.

Stock UpConsider increasing inventory levels before the holiday season to avoid running out of essential products during the factory shutdowns and shipping delays.

Diversify Shipping Modes – Consider combining various transport modes – sea – air – land transports to increase flexibility. Having alternative modes can help mitigate risks associated with unexpected delays in another way.

Consider a variation in Container Types- In peak seasons, the standard 20ft containers may be in limited supply. To mitigate risks and enhance flexibility, diversify your freight by opting for various container types. Consider using 40ft standard containers, high cubes, or side-door containers when possible. This approach not only helps secure alternative options but may also present cost-saving opportunities with potentially lower rates.

Consider Less-than-Container Loads (LCLs) Break down a large shipment into multiple smaller shipments by opting for less-than-container loads (LCLs). This approach minimizes the risk of shipping delays, as any issues affecting one container or carrier will not impact the entire shipment.

Choose Less Congested Ports and Fast TATs – Instead of relying on major ports such as Shanghai or Shenzhen, which may experience higher congestion, consider exploring less frequented ports such as Lianyungang or Xiamen.

Communicate with Partners – Maintain open communication with suppliers, freight forwarders, and customers to manage expectations and provide updates on potential delays.

For any additional information or assistance, reach out to a member of the Westbound team. Plan ahead to ensure a smooth transition through this festive period.

If you have any questions regarding the above, then Westbound are here to help. So, please do not hesitate to contact us.