How will the Chinese New Year affect the logistics industry?
The link between Chinese New Year and your business
Ah, Chinese New Year. The holiday that is observed by almost a quarter of the world’s population. However, if you’re part of the other 75%, the festivities would most probably go by without you noticing. Businesses that rely on import and export, to and from China will be on their toes due to the significance of the upcoming holiday, especially how largely it affects international shipping.
Don't belittle the impact of CNY
The impact Chinese New Year has on businesses is not limited to production facilities. Chinese Customs and local logistics providers are no stranger to the imminent disruption the holiday causes. Even international freight forwarders, whom are primarily based in China, will experience the disruption. Businesses that rely heavily on imports from Chinese manufacturers will be hit the hardest if this situation is not managed properly.
Impact of CNY on the International Freight Industry
Chinese New Year is one time where these workers are able to go home and spend time with their families. To accommodate for this mass human migration, factories close and cease production well before the holidays begin. This leads to a production idle period during and after the holidays. Thus, the number of goods produced before the holiday may increase drastically to compensate for the down period. This sharp increase in production may potentially lead to a huge spike in the volume of Chinese exports.
Here are a few issues that the international freight industry could possibly face:
- Increase in freight rates
The pre-holiday period is the traditional peak season for Chinese exports. Carriers will have the upper hand and may use the holiday as leverage to increase their prices according to market conditions. However, some forwarders may probably be willing to pay the premium just to have their shipments fulfilled on time without delay.
- Tight availability of containers and issues at Chinese customs
The sudden surge in cargo volume might result in a deficiency of available containers. During the CNY period, ports are usually filled with containers as everyone wants their container to get on the next ship. Shippers are likely to put immense pressure on freight forwarders to coordinate for proper reservations. All freight forwarders, including the largest, most well-connected ones, may face issues getting cargo through ports or airports and onto a vessel, even with a confirmed booking.
Custom authorities usually only take two to three days of break during the festivities. However, they could implement a holiday procedure that will undoubtedly, increase processing times. Slower processing times will translate to higher risk of goods missing transportation in or out of China. If your shipment is rolled, be prepared to face some delays.
- Trucking services will be affected
The large amount of containers that require transportation will take a toll on truck drivers. During the festive period, many drivers often return home to celebrate the lunar new year with their families. The remaining truck drivers will thus likely be overworked in order to meet existing demand.
Ways to deal with the CNY period
To ensure that the Chinese New Year holiday does not negatively affect your business, take note of the following:
- Pay adequate attention to the impact of the holiday season operations and make changes if necessary
- Manage your orders and jobs efficiently, improving the level of accuracy to prevent mistakes incurred by the increased workload
Important Information this CNY
To assist you with planning ahead for CNY, Haulio has consolidated some useful information for your reference (Note: Information are accurate as of time of posting, and may be subject to changes.
How Can Haulio Help You?
Haulio is Singapore’s largest network of container trucking services. With an outreach of more than 80% of Singapore’s hauliers, comprising of >2,000 prime movers and 20,000 trailers, be assured of trucking services when you need it.
Conversely, if you’re a trucker, register with Haulio to get access to trucking jobs!
References:
- Universal Cargo – How Does the Chinese Spring Festival Holiday affect the International Logistics Industry?
- Unicargo – Help! The Chinese New Year effect – production and shipping from China during the Chinese New Year
- Shipa Freight – International Shipping and Chinese New Year: Considerations for your business
