The Chinese New Year, alternatively referred to as the Lunar New Year or Spring Festival, stands as the most important holiday in China, carrying immense cultural significance. However, for international freight forwarding companies, this celebration introduces distinct logistical challenges. During this period, production decelerates, operations face limitations, schedules experience disruptions, and transportation delays ensue, resulting in substantial disruptions to the supply chain.
For independent freight forwarders intending to ship cargo during the Chinese New Year, proactive planning is crucial. Before embarking on this preparation, it is essential to understand what to anticipate during the Chinese New Year in 2024. This comprehensive blog will provide all the necessary information to facilitate informed planning and enable adjustments to your logistical operations as needed.
How international freight forwarding companies can cope with the shipping challenges during Chinese New Year
An overview of the Chinese New Year
Chinese New Year (CNY), is a widely celebrated festival across several East-Asian nations, including China, Vietnam, Malaysia, Singapore, and both North and South Korea. The specific dates of this holiday vary each year, as they are determined by the lunar calendar. The festivities span a total of 15 days, encompassing both preparation and post-celebration periods. However, preparations typically commence up to three weeks in advance. This celebration is marked by the migration of factory workers to their hometowns, temporary closures of manufacturing plants, and a gradual decline in production activities.
Moreover, during the holiday itself, a significant pause in operations occurs. After the 15-day celebration, a gradual return to normalcy ensues. In the year 2024, the Chinese New Year is set to begin on February 9 (Friday). The main festival is scheduled for February 10 (Saturday), marking the peak of celebratory activities. The conclusion of the festivities will be marked by the Lantern Festival on February 24 (Saturday).
Possible impact of CNY 2024 on the supply chain
Being a pivotal trade hub, particularly in the realm of ocean freight shipping, any slowdown in China has a pronounced impact on the global supply chain. The Chinese New Year celebrations contribute significantly to these disruptions, as virtually all factories and manufacturers in China temporarily cease their operations. During this period, ports impose limitations on their activities, and a considerable portion of the workforce is unavailable due to holiday-related absences. These collective factors result in widespread disruptions across the entire supply chain and logistical operations, affecting timelines, inventory levels, and overall efficiency.
The anticipated peak season during the Chinese New Year brings with it the expectation of port congestion. The surge in shipping activities contributes to delays, impacting road, rail, and air transportation networks. In the weeks leading up to the CNY, securing cargo space will become increasingly challenging, with carriers experiencing overbookings earlier than the usual timeline. Securing trucking services will also pose difficulties before the Chinese New Year, accompanied by an increase in service costs. Preceding the holiday, challenges in Full Container Load (FCL) shipments are anticipated due to Container Freight Station (CFS) cut-offs resulting from warehouse closures. Subsequently, after the Chinese New Year, there will be challenges in Less than Container Load (LCL) sailings due to blank sailings. These factors collectively contribute to the intricacies and disruptions faced in the shipping industry during the Chinese New Year period.
Tips for independent freight forwarders to cope with the challenges
For independent freight forwarders engaged in regular shipments to/from China, proactive planning is essential to circumvent potential delays during the Lunar New Year holidays. Here are key tips to ensure a smooth logistical operation:
Early planning is key
Initiate your preparations well in advance by marking your calendar and devising a comprehensive strategy for the transportation of goods both before and after the Lunar New Year festivities. Given that this period can potentially halt access to manufactured items for up to a month, ensure you maintain additional stock well in advance.
Assess the reliability and resources of your logistics partners
Evaluate the experience, reliability, and track record of your logistics partners when it comes to managing shipments during the Lunar New Year. Opt for carriers with a proven history of delivering freight efficiently and transparently during peak seasons and holidays. Ensure that your chosen logistics service provider possesses the necessary resources to meet the demands and address potential emergencies during the Lunar New Year in 2024.
As a member of one of the best logistics networks globally, you can rely on the support of top-tier freight forwarders across various cities in China. When faced with heightened challenges during peak seasons, you have the advantage of reaching out to your Conqueror partners in territories in China, South Korea, Singapore, Malaysia, or Vietnam. Leveraging their extensive market experience, these partners can assist you in navigating market dynamics and finding optimal solutions.
Renowned as some of the best freight forwarders, Conqueror agents excel in helping you overcome challenges associated with the Chinese New Year (CNY), ensuring the seamless operation of your logistics. Their reliability and competence make them invaluable partners, offering precise insights into the situation, establishing insider connections, and devising innovative solutions.
Book space for your ocean freight shipments in advance
To meet your shipping needs during the busy holiday season, it’s advisable to assess your requirements and pre-book vessel/container space with your carrier. By doing so, you can lock in reasonable freight rates and ensure that your cargo is given priority. With the heightened demand for transportation services around the holidays, early booking of vessel space is a proactive step to guarantee the smooth and timely movement of your goods.
Choose multiple, smaller shipments instead of Full Container Loads
In the face of substantial volumes of goods during peak seasons, consider dividing your larger shipment into multiple LCL loads each with its distinct bill of lading (BoL). This strategic approach helps minimize the risk of shipping delays. If any issues arise that affect a specific container or carrier, the impact is contained, preventing delays from affecting the entire shipment. This method enhances flexibility and resilience in your shipping strategy.
Constantly communicate with your carriers
Establish continuous communication with your shipper well in advance, particularly in scenarios of limited space availability. Inform them about priority shipments and, if possible, provide a forecast of your expected shipment volume. When opting for air freight, secure space in the belly hold of passenger planes for time-sensitive cargoes. While the rates may be higher, this proactive step ensures the functionality of your supply chain and timely delivery of critical shipments.
Create a contingency shipping budget for CNY
In light of potential shipping delays and associated operational costs such as demurrage and detention, it’s advisable to maintain a contingency budget specifically tailored for the Chinese New Year period. Given the increased likelihood of cargo damage or container loss during peak seasons, allocating extra funds as emergency reserves becomes crucial. This strategic budgeting approach allows you to address unforeseen challenges without compromising the smooth operation or profitability of your logistics activities.