Preparing for Chinese New Year

19 November 2019

Chinese New Year is approaching and it is time to act. With China experiencing mass factory and transportation hub closures for the holiday, it’s important to organise freight arrangements as soon as possible.

Although CNY is only a 5 day holiday, factories start to close up to 10 days prior to allow workers to travel home to celebrate the holiday with their families. Typically, Chinese offices and factories are closed for about 3 weeks, sometimes closures can last up to 40 days, and in some cases, workers see it as an opportunity to switch jobs and factories are left short-staffed, which can result in longer production times as factories work on replacing their workforce whilst working on any orders they received during the holiday period.

What can you do to ensure your supply chain runs smoothly when one of the world’s largest exporters shuts down for almost a month?

• Plan ahead; if you plan to get transportation booked – especially sea freight – at least 4 weeks prior to Chinese New Year and remember; the earlier, the better. Some factories close earlier than others to allow their employees to travel home in time for the celebrations.
• Ship all orders prior to CNY, plan your inventory and be sure to place any necessary orders with plenty of notice.
• Follow up with your suppliers on Cargo Ready Date, as these can shift frequently in the run up to CNY due to factories running on maximum capacity
• Forecast what you may need for the first 3 or 4 months of the new year. If you’re able to forecast how much product you’ll need for the first 3 to 4 months of the next year, you’ll have a leg up on ensuring your company has enough stock on hand to last you through CNY. 
• Have a plan for after CNY. As we outlined earlier, some factories will be hit with staff not returning after CNY. It could take weeks, even months, for the factory to get back up to normal production speed as they look for replacement workers. Having the forecast should help tide you over until the factories are producing at full capacity again.
• If you have a strict deadline, consider air freight, but remember that air capacity can be tight before Chinese New Year and will also require advance booking to avoid last minute disappointment
• If you are unable to plan ahead and book in advance, a longer transit time may be an alternative option to consider. As the fastest transit-time services are more likely to be overbooked or unavailable, selecting a transit time that is longer by a few days could mean that your cargo is less likely to be rolled to the following week.

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