Chinese New Year, the biggest and most important holiday in China which typically takes place in January or February every year, always seems to impact international shipping activities all around the world. It is celebrated not only in China, but in other Asian countries like Cambodia, Thailand, Vietnam or Singapore. Beyond Asia, CNY also affects businesses in countries in Europe and America because this holiday plays a critical role in international shipping rate changes, particularly for the trade lanes from Asia to the rest of the world.
CNY in 2017 will start on January 27th with the Spring Festival Eve, followed by the Spring Golden Festival week holiday from January 28th to February 2nd. During this important period, businesses and factories close for at least a week, since their workers take this period to visit their families to celebrate and welcome the new year.
Before the holiday period, all factories rush to complete productions and release shipments almost at once, which results in a shipping capacity lower than demand and freight overpricing. Most of the time, carriers charge premium fees in exchange for a promise to put the cargo in the vessels or airplanes, although CNY 2016 was an exception since there was over capacity –yet with rate increases. If premium fees are not paid, the cargo is probably rolled to the next departure date, even if you have received a booking confirmation. It might be better to accept the rate increases and pay them.
During CNY the holidays, no business is happening, so no communications with China can be expected. No cargoes are released.
It is said that after the CNY holidays, factories have to face the worry of not knowing whether their workers will return, as they might just stay at home. This has a direct impact on the effectiveness of the factories’ production after CNY, and therefore it affects the delivery of your needed products in the months of February and March.
The question is: How to avoid problems surging from CNY holidays? As simple as it may sound, the solution is to plan ahead. For this, you can take into consideration the following points that will help you with the CNY chaos:
Get a confirmation on your suppliers’ schedules
Your suppliers might be forced to shut down early, because they depend on their own suppliers to complete productions. This explains why different factories close on different dates. Find out their schedules in advanced to prevent delayed orders.
Place your orders and book your international shipping around Chinese New Year in time.
Your orders should all be placed by now, if your average production takes 30 days. If shorter, you can still place an order, but do not let it rest: request the international shipping booking in advanced with the preliminary details of the cargo. Remind your supplier constantly about the shipping dates, to ensure the production is completed on time before the shipping cut-offs.
Get a double confirmation of your international shipping booking.
At least one week before your cargo’s departure date, confirm the space availability with the carrier –this way they are reminded they have to keep the space for you. Furthermore, confirm the production with your supplier. If the productions does not seem to be ready for the shipping date, request a shipping rescheduling immediately.
Do not place last minute orders in January.
You will bear the risks of low quality production and lack of shipping space.
If needed, communicate with your contacts in China 7 days after the CNY eve.
Even when operations are completely stopped during the CNY holidays, some administrative tasks could be handled if you contact the respective representatives. Probably they will not be back in the office, but they might be available to answer some emails or phone calls if you need some administrative help.
Do not make deposit payments before the CNY
Unless you trust your supplier completely. Some factories never open again. As said before, some workers decide to not return to their workplace after CNY, and the same situation can happen with factories.
International shipping around Chinese New Year will always require paying rate increases. However, if a strategic planning is done through the year, inventories could be stocked enough until more production is imported from China again in march and April with lower freight rates.
As 2017 is already here, we hope you are ready for another year full of opportunities. Start with moving your goods now, because CNY is just 4 weeks away. Good luck!