Logistics Trends & Events

A very different Chinese New Year 2022: How will container delays and shortages affect your business?

Chinese New Year is just around the corner, which means a busy period is approaching for an already-strained logistics sector. We explore which 3 essential logistics key facts you need to know now.

Anna-Sophia Metzel, Curtis Doyle, 06 October 2021

What you will learn in this article:

  1. What is Chinese New Year, and when is it?

  2. Chinese New Year logistics: 3 things you need to know now

  3. Can I ship containers to or from China during Chinese New Year 2022?

  4. What is the impact of Chinese New Year on shipping in 2022?

  5. How will the Chinese New Year differ in 2022?

It has been a long year for the logistics and supply chain sector. With intense pressures that are seemingly never-ending, you may be counting down the days until 2021 is behind us. But as we enter the final months of the year, a crucial period is approaching.

No, it’s not the pre-holiday rush in preparation for Black Friday, Cyber Monday; Thanksgiving or Christmas – although they’re all important! The final months of this year mean Chinese New Year is close – and after the year we’ve experienced, being prepared will be more important than ever. And with that, the biggest rush for container shipping is approaching.

What is Chinese New Year – and when is it?

Chinese New Year – which is also known as the Lunar New Year or Spring Festival – is China’s most important festival and one of the biggest holiday celebrations in the world. The date of Chinese New Year is decided by the lunar calendar and changes each year. This year it begins on February 1st, 2022 and marks the beginning of the year of the Tiger!

The holiday marks the end of winter and the beginning of Spring. Families are getting together to mark the occasion with events and celebrations across the country. In a typical year, almost 500 million people make journeys within China to be with their families – and in 2021, despite the impacts of Covid, almost 100 million people still travelled.

February 1st will mark the beginning of a week of public holidays, with many businesses and industries closing for the duration – although preparations for this begin weeks before. And this will make the period extremely busy and challenging once again – also for logistics.

Chinese New Year logistics: 3 things you need to know now

Almost all factories and manufacturers in China close during the Chinese New Year celebrations. And these closures last for at least the week of the public holiday. However, the impacts can be seen weeks before, as factories work flat out to complete orders before they close, and workers begin their travels early to be with family come the week of celebration.

That means manufacturers will have no time or capacity to provide quotations or take on new orders in the weeks running up to Chinese New Year.

Following the public holiday, it can often take four to six weeks for these factories and manufacturers to get back to their normal production levels. This is because workers are slowly returning to factories, and it takes time for production to return to total capacity – while some don’t return at all, instead of seeing the Chinese New Year break as a chance to change careers or find another job.

While this is undeniably a difficult time for any business to be navigating the world of logistics, there are 3 essential logistics key facts you need to remember:

  1. Factories need time to ramp back up: Even though factories might only shut down for one or two weeks, it is important to manage expectations beforehand: prepare for factories to be back to normal only after a month. Shutdowns are usually followed by mass demand from businesses that need to make up for the two weeks’ worth of delayed products.

  2. Product quality before and after the holidays decreases: When factories reopen after the Chinese holiday, workers may not come back simultaneously, and sometimes not at all. When workers don’t come back, factories must replace them quickly, which leads to lower quality and untrained staff working on production lines. That means many products will not be adequately produced, and you should increase your product inspection efforts in the months and after Chinese New Year.

  3. Supply chain forecasting is key: Given that 2020 and 2021 were unlike any other years – also in logistics – it is crucial to prepare your supply chain for Chinese New Year 2022. Ideally, you want to prepare your cargo ahead of time, and you will need to calculate extra time to make sure your cargo arrives on time. That’s why we have compiled an easy-to-understand guide to supply chain forecasting.

Can I ship containers to or from China during Chinese New Year 2022?

Yes, you can – China’s ports continue to operate almost as usual during the Chinese New Year period. However, they may be operating at a lower capacity and ‘as usual’ isn’t quite the same in a year of container shortages and cargo delays. The disruptions that have impacted international logistics are likely to be still affecting these ports come February 2022.

As well as this, the closure of factories means no goods will be delivered from factories to ports. So, while you can ship to or from Chinese ports, you won’t be able to get deliveries from your suppliers after their doors close. We recommend our dedicated local shipping section for more information if you want to ship from and to China.

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What is the impact of Chinese New Year on shipping in 2022?

Even in an average year, Chinese New Year would cause plenty of pressure on supply chains and logistics – and we would still be advising you to be prepared. However, this has been far from a normal year, and the intense constraints and pressures being felt across the industry are going to have an impact. Only for trucking, the demand in China is set to rise 10% ahead of the holidays.

In our latest update from the Asia Pacific region, we looked at the current situation in detail – but here are some of the headlines to be aware of:

  • The fallout of a pandemic-effected supply chain, shortages of drivers in key markets, and surging demand have all impacted schedule reliability and vessel capacity. Unfortunately, as a result, we’re limited to provide ocean freight bookings on several routes, especially from China, right now.

  • A shortage of empty containers also continues to be a key source of disruption across Asia – caused by a ripple effect of factors, starting with rising demand around the world, together with operational challenges in turning empty containers around to make them available again.

  • Freight rates are already at all-time highs, but as demand continues to rise, they can be expected to increase again. This is particularly true in the year's final weeks, as last-minute bookings are made in time for Chinese New Year.

All of these pressures are likely to get worse as Chinese New Year gets closer – because businesses around the world will be making their preparations and vying for vessel space and container capacity. That makes it all the more important to get your business and logistics planned.

For more insights and updates like this, take a look at our other recommendations in our Knowledge Hub.

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