Logistic Trends & Events

How to prepare your supply chain for the impact of Chinese New Year

Chinese New Year, or Lunar New Year, marks the start of the biggest festive holiday in China. To ensure that you are prepared for this essential holiday in Asia, it’s important to understand the shipping and logistics challenges that the season can have on your business.

Yan Jing Fu, K Praveena, 24 October 2022

As people across China prepare to reunite with their families and loved ones to celebrate the season, factory closures and port operations in limited capacities can cause delays and disruptions in your supply chain management system. Read on to learn more about the impact on your logistics.

When is Chinese New Year 2023?

The date of Chinese New Year, also called "Lunar New Year" or "Spring Festival", changes from year to year according to the Lunar calendar. The coming Chinese New Year will fall on Sunday, the 22nd of January 2023, and celebrations will culminate on the 5th of February 2023, with the Lantern Festival. Signifying the beginning of the spring season, it also kickstarts the Year of the Rabbit on the Chinese Zodiac Calendar.

How is Chinese New Year celebrated?

China's most important festive holiday is a home and family celebration. Gatherings with relatives and loved ones around the dining table are customary. This tradition is reflected most prominently during the Reunion Dinner, held on the eve of Chinese New Year. During this time, family members rush home, sometimes from faraway places, to share one of the most important meals of the year with the people who matter the most.

How will Chinese New Year 2023 affect your business?

China has become a manufacturing powerhouse, leading the pack in product development. It has also risen to become a leader in the global export industry. The sheer magnitude of the nation's manufacturing and export operations across its various territories will come to a screeching halt during Chinese New Year, as factories can shut down close to a month before the festivities, resulting in potential disruptions in supply chains across the region.

What are essential dates during Chinese New Year 2023 for your supply chain?

Here's a helpful timeline of the Chinese New Year 2023 happenings for your reference to help you visualise the dates that may impact your business and which potential challenges for your business may occur:

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Factory Closures

Though the national holiday lasts only a week, factories tend to close half a month to a month before it. This is to allow factory workers, some of whom leave their hometowns for a whole year to make a living, extra time to spend with their families as per the tradition of the season. The closure of factories also means that goods will not be delivered from factories to ports. Hence, while you can ship to or from Chinese ports, you will not receive deliveries from suppliers once they shut down for the festivities. Placing orders in advance is advised.

Production shutdowns

Factory closures mean manufacturing operations will come to a screeching halt altogether. With the holiday beginning on the 21st of January 2023, expect production slowdowns to start in mid-December 2022. They will only return to normal on the 5th of February, after Lantern Festival. Manufacturers will have less capacity to provide quotations or take new orders in the weeks leading up to Chinese New Year, so it is crucial to organise your supply chain accordingly in preparation for these obstacles.

Reduced availability of containers and slots

Though ports in China will continue to operate as usual during the Chinese New Year period, they may function at a lower capacity. Ocean space will be tight, and many freight services may be full. With the seasonal shipping rush and suppliers looking to make bookings to avoid being affected by the Chinese New Year closures, containers may get filled up faster than usual. Space will become harder to secure as carriers will be overbooked earlier than usual.

Container Delays

Ports running at a lesser capacity can result in container delays. If you have orders to fill or deadlines to meet, it is essential to ensure that you get your timings right when shipping to and from China to avoid late deliveries.

Higher freight rates

Remember that freight and trucking services can get more expensive during this Chinese New Year. Rates will rise from December 2022 to February 2023 due to China's limited capacity and extended holidays.

How you can best prepare your supply chain for Chinese New Year 2023 closures

1. Plan your shipments ahead of time

Book your ocean freight ahead of time, at least 3-4 weeks before Chinese New Year. The sooner, the better, as it will ensure that your business continues to run smoothly throughout the festive season.

2. Organise your inventory to overcome delays or shortages

To ensure your business has an ample supply of products in stock, it is advised that you plan for the time before Chinese New Year and the period after. Effects of the festive closure may be felt up until spring. You may want to consider following up closely with your supplier on when your shipments are due to be ready. These dates can fluctuate during the period leading up to Chinese New Year, with factories running at full capacity.

3. Have alternatives

It may be a good idea to have alternative modes of transportation, for example, from ship to rail. Particularly for urgent deliveries or to meet tight deadlines.

4. Plan on time

Make sure you plan and book your shipments well ahead of time to avoid delays in receiving orders. As factories can shut down production almost a month before the week-long break, getting orders planned and booked well ahead of time is essential to avoid delays.

5. Work with a reliable logistics partner

Engaging the services of a trusted logistics partner with the necessary expertise and resources to help you clear of complications during the Chinese New Year period will not only ease the seasonal shipping stress but ensure that your products reach customers in time.

How Twill eases the stress for supply chains during Chinese New Year 2023

Twill is here to ease the stress during the festive period - with multiple features to make your logistics as simple as possible:

End-to-end logistics on a single platform

Twill provides you with a single platform for you to plan all your logistics needs. You can book, schedule, track and organise all your shipments in advance with an accessible, easy-to-use interface. Our instant daily rates give you added control to steer around any additional costs incurred during the Chinese New Year period.

What's more? You'll have the option to integrate solutions to help your journey run seamlessly. Our Customs Clearance and Value Protect offerings are here to take care of your products from start to end.

Check sailing schedules to help you plan ahead

Having access to a sailing schedule can speed up your organisation process tremendously. You can effortlessly check sailing schedules without booking when you use Twill's platform. Utilising Twill also puts you in touch with an extensive network of routes powered by industry leaders – Maersk. This assures you that your shipments are given the same priority as some of the world's most notable brands. We're not about size, every shipment matters to us.

Visibility throughout your journey

Doing all your planning on Twill gives you around-the-clock visibility of your cargo, we enable you to eliminate the need to engage multiple external vendors when doing your supply chain management. This helps mitigate complications during the transportation process while saving you manpower. You will no longer need to spend time and resources dealing with hectic paperwork during an already stressful logistics period.

Intermodal transportation provides you with alternative routes

Twill enables you to seamlessly transition your cargo from ocean to land. Our containers provide you with the flexibility to go from shipments to trucks or rail without having to make any hassle-free transfers or deal with multiple vendors to deal with different modes of transportation. This is particularly important during festive periods like Chinese New Year, as factory closures and production slowdowns could cause unwanted delays.

Stay up to date for supply chain trends in the Asia Pacific

You never know what is going to change in the trade landscape within Asia, especially during the bustle of Chinese New Year. Twill provides you with more than just services. We're here to provide insights on how to overcome supply chain uncertainties in the Asia Pacific. And in our knowledge hub, you can get further insights on supply chain trends in 2023 to ease your supply chain.

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