The Chinese New Year, also known as the Lunar New Year or Spring Festival, is one of the most important holiday periods in China. For shippers and businesses, it presents specific logistical challenges. Production slows down, operations are limited, schedules get disrupted, and transportation gets delayed, thus leading to significant supply chain disruptions.
When shipping, preparing for the Lunar New Year is crucial for businesses. Keep reading to learn:
- When is Chinese New Year (CNY) in 2024
- Impact of Lunar New Year on shipping and supply chain
- How to prepare your shipments for CNY 2024
Note: We’ll use the terms Chinese New Year and Lunar New Year interchangeably.
When is the Chinese New Year 2024?
One of the most important traditional Chinese holidays, the Chinese New Year or Lunar New Year, is celebrated in several East Asian countries, including China, Vietnam, Singapore, Malaysia, Philippines, Indonesia, and North & South Korea. The dates vary each year because it follows the lunar calendar. Usually, the new year falls between January 21 and February 20. The celebrations last for 15 days, culminating with the Lantern Festival.
Note that preparations for Chinese New Year start three weeks in advance – with factories slowing down, shutting operations, and workers traveling back to their hometowns to celebrate the new year with their families.
In 2024, the Chinese New Year will commence on February 9 (Friday). The main festival will fall on February 10 (Saturday). The festivities will conclude with the Lantern Festival on February 24 (Saturday).
What are essential dates during 2024 Chinese New Year for your supply chain?
Here’s a tentative schedule of what the Chinese New Year 2024 will be like:
Note: It takes 4-6 weeks for factories and port operations to return to normal levels after the CNY holidays.
What is the impact of Chinese New Year 2024 on my shipping business
As a primary trade centre, especially for ocean freight shipping, slowdowns in China affect the global supply chain. During the Chinese New Year celebrations, almost all factories and manufacturers in China halt their processes, ports limit their operations, and workers are unavailable – thus disrupting the entire supply chain and logistical operations. This means:
- Factory closures lead to disrupted supply
Many manufacturing facilities, particularly in China and other East Asian countries, shut down for an extended period, typically around two to four weeks. This pause in production disturbs the supply of goods and freight to global markets.
- Decreased workforce and halted operations
A significant portion of the workforce in the country takes time off during the Lunar New Year to celebrate with their families. They don’t return to work until 1-2 weeks after the new year. This leads to reduced staffing levels and potential labour shortages at ports.
- Increased shipping demand before the holiday week
In the lead-up to the Chinese New Year, businesses pull forward their shipping needs, which creates capacity crunches. There’s a surge in shipping demand, particularly exports. This leads to unavailability of containers, transportation delays, and increased shipping costs.
- Peak season means high congestion at ports
Due to peak season, port congestion is expected. Road, rail, and air transportation networks experience significant delays due to increased traffic and holiday-related workforce shortages. This affects the movement of goods to and from factories, distribution centres, and ports.
- Higher shipping costs and processing time
Increased demand and low supply lead to inflated rates. During the Lunar New Year, this means exorbitant freight rates and additional peak season surcharges. As freight volume is high, it also leads to higher time for documentation and customs clearance processes.
- Shortage of containers and vessels for exports
A shortage of empty containers continues to be a key source of disruption during the Chinese New Year – caused by a ripple effect of factors, starting with rising global demand and operational challenges.
How you can prepare your supply chain for Chinese New Year 2024 closures
Preparing and planning is the key to managing your logistics and supply chain operations to minimise the effect of the Chinese New Year on your business. Following a proactive approach becomes essential. Here’s how you can prepare your business during peak seasons while keeping your supply chain agile:
- Evaluate your logistics partners for reliability and resources
Assess your logistics partners’ experience, reliability, and track record in handling shipments during the Lunar New Year. Choose carriers with a history of successfully delivering freight in peak seasons and holidays with the highest efficiency and transparency. Check that your logistics service provider has the resources to handle the CNY 2024 demands and emergencies.
- Plan ahead and communicate your needs clearly
Keep the dates for the 2024 Chinese New Year in mind when planning your shipments. Talk with your logistics partners to understand their services, any potential causes for disruptions, and plan of action in case of delays. Ensure everyone is on the same page regarding your shipping needs, expected timelines, and freight charges.
- Pre-book containers or vessel space
Gauge your shipping requirements and secure vessel/container space with your carrier at reasonable freight rates well in advance. With high demand for transportation services around the holiday season, booking vessel space early can ensure your cargo gets prioritized.
- Leverage data for effective inventory management
Analyse past customer behaviours and historical order patterns during the Lunar New Year season. It can guide your inventory planning, helping you anticipate demand and ensure you have extra inventory to cater to your customers in case of shipping delays.
- Opt for smaller, multiple shipments instead of a full container load
When dealing with a substantial volume of goods around peak season, distribute your bigger shipment into multiple less-than-container loads (LCLs), each package with its separate bill of lading (BoL). This way, you can reduce the risk of shipping delays, as any delays affecting one container or carrier will not impact the entire shipment.
Tips to prevent shipping delays during Lunar New Year 2024
In preparation for CNY, delays in shipping are a major concern. But, with the right strategies, you can minimise disruptions and ensure a smooth flow of goods. Here are a few tips to maintain a reliable and efficient supply chain during the Chinese New Year 2024:
- Consider shipping through various types of containers
While 20ft containers are frequently used for shipping, it is also one of the lesser-available containers during peak seasons. So, diversify your freight by using different container types. You can choose 40ft standard, high cubes, or even side-door containers whenever feasible. These alternatives may provide cost-saving opportunities due to potentially lower rates.
- Diversify your modes of shipping
Instead of shipping only via sea, consider multiple transportation modes for freight – like air, sea, and land transport – and consider alternatives. This flexibility allows you to switch shipping modes, if one way faces unexpected delays during the peak season in Lunar New Year 2024.
- Choose ports with lower congestion and faster TATs
During peak season in CNY 2024, avoid shipping from the bigger ports (like Shanghai or Shenzhen), as they may have higher congestion and longer turnaround times. Discuss alternate routes with your logistics provider and ship from lesser-frequented ports (like Lianyungang or Xiamen), even if it requires slightly longer transit times.
- Manage your employees’ holiday schedules
If your operations involve regions celebrating the Lunar New Year, consider the availability of your workforce. Some employees may take time off, impacting the production and supply chain of your business. So, account for the holidays in advance, move faster, and stay on top of your shipping game.
- Maintain a contingency Chinese New Year shipping budget
Due to shipping delays, operational costs may add up quickly, like demurrage and detention. Also, cargo damage or container loss is frequent during peak seasons. So, always allocate some extra budgets as emergency funds during these times. This can help you address unforeseen issues without significantly impacting your operations or profitability.
Preparing your supply chain for the Chinese New Year 2024 is necessary to ensure smooth operations during this major holiday season. Proper planning and preparation, clear communication, and contingency plans are your allies. With the tips and strategies mentioned above, your business can survive and thrive during this festive period and sail smoothly!
At Maersk, we help you manage your supply chain and logistics by making it more accessible, more efficient, and more secure. So, while you take care of your business growth, we take care of shipping. Start shipping with Maersk!
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