How to Prepare Your Logistics For Chinese New Year
China’s busiest time of year is fast approaching. Chinese New Year (CNY) is celebrated nationwide meaning all businesses around the country will close, including all factories. During this time all workers will travel throughout the country to return to their families and celebrate the New Year, with all manufacturing shutting down for the duration. For US companies importing or exporting goods from and to China this can be a considerable challenge.
“Planning and preparation are key to effectively navigating and managing challenges that could occur during the Chinese New Year,” said Frank Guenzerodt, President & CEO of Dachser USA. “By implementing a few critical steps in advance of the holiday, shippers can avoid unnecessary bottlenecks and continue business with little or no interruption.”
In 2018, the official dates for Chinese New Year are from February 15 to 21. However, most factories will stop operations until March 2.
One to two weeks before CNY, factories will speed up their production causing a surge of freight. During CNY they will close down completely. Production will resume after and be back to normal one to two weeks after the holidays.
There are two celebrations that occur during this time, the Official Holiday and the Traditional Holiday. It is due to this that some factories will finish earlier than others and take longer vacations. Some suppliers are off for more than a month.
How CNY can affect your business
Longer production and quotation times: Production time will be delayed and quotation requests will be processed slower.
Decreased staff: Some factory workers decide not return to their workplace after the holidays. This high turnover means that previously estimated production times may need to be extended.
Production queues: The later that orders are submitted, the further back in the production queue they will placed. With one month worth of orders backed up, factories will first process orders from their preferred partners.
How you can prepare
Build up sufficient stock, considering a period of up to four weeks after Chinese New Year.
Provide a forecast of your expected cargo to your shipper’s representative.
Inform your shipper about your priority shipments, in case there are only very limited spaces.
Reserve space on passenger flights for shipments which cannot be delayed. The rates are slightly higher but this measure will keep your supply chain running.