With Chinese New Year approaching fast workers will travel throughout the country to return to their families and celebrate the New Year, with all manufacturing shutting down for the duration.
The country will celebrate from Feb. 15 -21 but most factories will stop operations until March 2.
For U.S. companies importing or exporting goods from/to China this can be a considerable challenge.
“Planning and preparation are key to effectively navigating and managing challenges that could occur during the Chinese New Year,” said Frank Guenzerodt, CEO of Dachser USA. “By implementing a few critical steps in advance of the holiday, shippers can avoid unnecessary bottlenecks and continue business with little or no interruption.”
One to two weeks before CNY, factories will speed up their production causing a surge of freight. During CNY they will close down completely. Production will resume after and be back to normal one to two weeks after the holidays.
There are two celebrations that occur during this time, the Official Holiday and the Traditional Holiday. It is due to this that some factories will finish earlier than others and take longer vacations. Some suppliers are off for more than a month.
Guenzerodt outlines what can happen during this time and how to prepare for it..
How CNY can affect your business:
--Longer production and quotation times: Production time will be delayed and quotation requests will be processed slower.
--Decreased staff: Some factory workers decide not return to their workplace after the holidays. This high turnover means that previously estimated production times may need to be extended.
--Production queues: The later that orders are submitted, the further back in the production queue they will placed. With one month worth of orders backed up, factories will first process orders from their preferred partners.
How you can prepare:
--Build up sufficient stock, considering a period of up to four weeks after Chinese New Year.
--Provide a forecast of your expected cargo to your shipper’s representative.
--Inform your shipper about your priority shipments, in case there are only very limited spaces.
--Reserve space on passenger flights for shipments which cannot be delayed. The rates are slightly higher but this measure will keep your supply chain running.
Holiday schedule for selected countries in the Asia-Pacific region
Mainland China – CNY – February 15-21
Hong Kong – CNY – February 16-19
Korea – Lunar New Year Holiday – February 15-16
Singapore – CNY – February 16-17
Indonesia – CNY – February 16
Taiwan – CNY – February 15-20
Vietnam – Lunar New Year – February 14-20
Malaysia – CNY – February 16-17