How Chinese New Year Affects Your Business’s Shipping and Logistics

Jan 25, 2019

Millions of Chinese around the world will be celebrating Chinese New Year in the next few weeks.

With a significant amount of manufacturing, supply chains and logistics based in China, it’s important to note its impact on your supply chain especially if you manufacture or ship goods from China.

When is Chinese New Year dates in 2019:

  • Official dates: 5-6 February 2019

  • Observed times in China: 4-10 February 2019

  • In 1-2 weeks before Chinese New Year, factories tend to spend up production, after which they can stop work for up to an entire month

  • Production gradually resumes after and return to normal levels 1-2 weeks after the holiday

Want more dates like these? Check out our e-commerce calendar to plan your 2019.

Why you should expect shipping delays during Chinese New Year

Chinese New Year is THE festival for Chinese around the world, but especially in China. The country practically shuts down for 2 weeks as people travel cross-country to spend time with their families, buy new clothes and enjoy the festive season.

Of course, this phenomena raises questions from merchants relying on Chinese drop-shipping for their operations. In this article, we share the most important pointers to prepare you for the holiday season.

If your business relies on China for their goods, that means fewer working in manufacturing, supply chain or logistics to supply you with your items. Chinese New Year holidays last two weeks in China. Prepare for factories to shut down during the entire season. If not pre-planned properly, you may see significant delays while serving your customers in the first quarter of 2019.

This time is especially risky for businesses reliant on the spring and summer seasons for their peak season sales. What does the Chinese New Year period mean for your business and how your goods move through your supply chain?

Increased freight and fulfilment costs: Workers tend to be in a rush during the few days leading up to Chinese New Year. They will attempt to complete as many orders and freight demands as possible. Paying for employee overtime, overbooking of logistics carriers and other production facilities or imposing additional surcharges is common and might drive up costs and lower the quality of execution.

Longer transit times and slower movement of parcels: Factories can close up to a week during and logistics carriers (like SF Express) have more limited resources during Chinese New Year. Expect the flow of goods to slow down during Chinese New Year. Delays may even continue after the holidays, and you might see less progress on your parcels during this time.

Here are some things you can do to navigate the tricky holiday logistics season during Chinese New Year.

Plan ahead to avoid impact on your business

The way forward is smart and sensible logistics planning.

Forecast how much product you need for the first quarter of the year. Ensure you have enough stocks on hand to last through Chinese New Year.

Analyze your sales history from the last year. Work with your suppliers and logistics carriers to plan for supply chain disruptions.

Plan for the period AFTER Chinese New Year as production will be delayed due to workforce shortages. It may take weeks or even months for supply chains to get back to normal productivity.

Develop good relationships with your suppliers and logistics carriers

With Chinese New Year, carriers and suppliers will prioritise customer differently. Regular customers will be preferred over fair-weather or new ones. Customers with larger order volumes are prioritised over customers with smaller quantities. Inform your logistics carriers of your priority shipments and provide them a forecast of your expected shipping volumes

During Chinese New Year, the Chinese supply chain slows down drastically

Chinese New Year often draws comparisons to Christmas when assessing the impact of the holidays on the supply chain. However, there is one key difference. Chinese New Year is often the only holiday for many Chinese factory and logistics carrier workers, so don’t underestimate its potential impact on your supply chain if China is an essential part of your supply chain.

Prepare for the season by evaluating your shipping volumes needed from your logistics carriers and supply chain networks. Predict your actual shipping volumes and prepare accordingly with your carriers and customer service teams.

Don’t get caught off-guard by seasonal changes in supply chain and logistics. Check out our 2022 e-commerce calendar to plan your logistics efforts ahead of time.

For more exclusive reports, insights, and interviews on the latest updates in e-commerce and logistics, follow us on LinkedIn or join our community as a member.

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