During the Chinese New Year (CNY), celebrated by China and other Asian countries such as Vietnam, Singapore, Malaysia, the Philippines, Indonesia, and North and South Korea, businesses, including factories, will close their doors to welcome the wooden snake, corresponding to 2025.
For companies that rely on Asian suppliers, understanding and preparing for this period is critical to avoiding costly disruptions.
This pause in activity is affecting the planning of many logistics companies and is exacerbated this year by the phenomenon of container shortages and the lack of air and ocean capacity to meet the high demand from importing countries.
Asia’s role in global trade
China and other Asian countries play a dominant role in international trade. China alone is responsible for nearly 30% of the world’s manufacturing output, exporting from electronics to textiles. With many factories and logistics operations in this region, disruptions can ripple through supply chains worldwide.
Current market developments are causing a significant shortage of logistics capacity in Asia. As Chinese manufacturing is almost completely disrupted, shipping lines, cargo airlines, and railroads are canceling and/or reducing departures during the holidays.
How the CNY impacts logistics
Preparations for the Chinese New Year begin three weeks in advance, and it takes 4 to 6 weeks for factories and port operations to return to normal after the holidays.
- Factory shutdowns: During CNY, factories close for 1-2 weeks or more, impacting production schedules and lead times.
- Shipping bottlenecks: The rush to ship goods before the holiday causes significant congestion at ports.
- Labor Shortages: Migrant workers often take extended vacations, delaying the resumption of production after the holidays.
- Freight rate fluctuations: Demand for shipping capacity spikes before the holiday, driving up freight rates.
Key Challenges
- Disrupted supply chains: Delayed production leads to inventory shortages.
- Increased costs: Increased shipping costs and potential surcharges can strain budgets.
- Planning Uncertainty: Unpredictable timelines challenge demand forecasting and supply chain resilience.
Best practices for managing CNY disruptions
- Plan ahead: Place orders well in advance to avoid last-minute delays.
- Buffer Inventory: Maintain safety stock to account for supply chain slowdowns.
- Partner with reliable carriers: Secure shipping space early to mitigate rate increases.
- Communicate with Suppliers: Maintain clear communication about schedules and production plans.
- Leverage Technology: Use supply chain visibility tools to monitor shipments and inventory levels.
How a trusted logistics partner makes a difference
Navigating the complexities of the CNY requires expertise. A logistics partner like The ILS Company offers:
- Seamless cross-border logistics solutions.
- Real-time tracking to ensure supply chain visibility.
- Strategic warehousing options to mitigate disruptions.
FAQs
1) When does the holiday start?
Chinese Official Holidays: From 28th, January to 4th, February. Back to work on the 5th, Feb.
Factory Holiday Schedule: According to our understanding some factories are on holiday from 20 January to 14 February.
Our Holiday schedule: From 28th, January to 4th, February on holiday. We’ll keep checking our emails/WhatsApp during the holiday.
2) Will freight rise before the Chinese New Year?
This is probable because the peak shipping season is before the Chinese New Year. Shipping companies will increase the price before the holiday.
After the Chinese New Year is the low season, shipping rates will stay at a low level in February.
3) Will the space, truck, and equipment be tight before the holiday?
Yes, there’s no doubt about this one. All of these problems are the inevitable result of peak shipments. Many cargoes are ready to deliver before the holiday.
4) Does the Carrier roll over the container? For urgent cargo how do you avoid it?
There will be a lot of container rollover during the holiday because shipping companies accept overbooking (100%–200%). Booking space in advance can reduce the probability of rollover.
For urgent cargo, you can notify us when sending instructions, we will proceed with booking space with the vessel in better transit time and send an email to the Carrier to apply for not rollover our containers.
Conclusion
Chinese New Year highlights the interconnectedness of global supply chains and the importance of proactive logistics management. By partnering with a trusted expert like The ILS Company, you can ensure smooth operations even during peak disruption periods.
Our best suggestion: Booking in advance as much as possible. Arranging booking in advance has a lot of benefits
- Ensure space.
- Reduce the chance of rollover.
- Avoidance of increased logistics costs at the origin.
- The truck can be booked in advance to pick up empty containers.
- Ensure that the cargo will be shipped before Chinese New Year without any delay.
Are you ready to strengthen your supply chain? Contact The ILS Company today and secure your operations against CNY challenges.