3 Reasons the Chinese New Year Celebration Affects Exports (and what you can do about it)

As we all know, Christmas and Thanksgiving in the U.S. can cause delays in business due to scheduled closures. But did you also plan for possible delays due to holidays observed in China? If you buy direct from China, you need to know exactly how these holidays affect Chinese exports.

We’ve covered the holidays celebrated in China before in “Chinese Holidays: An Overview of the Festivals Celebrated in China”, which explained how important the Spring Festival is. To recap, the Spring Festival (or Chinese New Year) is a significant holiday that can have a major impact on China sourcing and supply chains for corporate buyers. The holiday, which typically falls between late January and early February, marks the beginning of a new lunar year and is celebrated by over 1.4 billion people worldwide. 

The festivities last for 15 days and involve various customs and traditions such as giving red envelopes filled with money, decorating homes with lanterns and banners, and enjoying a reunion dinner with family and friends. As you may know, Chinese people, no matter where they are, still go back to visit their hometown when the New Year/Lunar Year arrives, despite how difficult booking travel and accommodations can be during this time. Some people even resort to riding motorbikes across thousands of kilometers because tickets for planes and trains are sold out! It is expected that about 2.89 billion trips will take place during this time. And they do all this to spend a few days with family members they seldom see throughout the year.

As a result of this, many factories and businesses in China shut down for a period of time, usually a week or more, in order for employees to travel home and celebrate with their families. This can lead to a slowdown of production and a delay in the delivery of goods, causing logistical disruptions for corporate buyers and businesses that buy direct from China. It won’t be “business as usual” for sourcing from China until after the Lantern Festival. During this time, expect the speed of office-related administrative work to be much slower than usual.

Potential Disruptions

When it comes to logistics, we always advise companies not to arrange shipment dates too close to the New Year or during the New Year for the following reasons:

-Factory closures: Many factories in China shut down for an extended period of time during the Chinese New Year, making it difficult to arrange for goods to be produced and shipped. This can lead to delays in the production and delivery of goods, causing disruptions in the supply chain and affecting the timeliness of export shipments.

-Limited transportation options: With many people traveling home to celebrate the holiday, transportation options can be limited, making it more difficult to arrange for goods to be shipped on time. There will not be an adequate number of vessels available for a lot of orders pending shipment during the New Year. The cargo may still be left behind if the vessel is too full, even if it has been scheduled in advance.

-Reduced workforce: Many factory employees and transportation workers take time off during the Chinese New Year, leading to a reduced workforce and potential delays in the production and shipping of goods. This can lead to difficulties in arranging export shipments and ensuring that goods are delivered on time.

How to Avoid Disruptions

To better manage your production and shipping schedules during the upcoming New Year, and to avoid the risk of delays, discuss these details about the New Year with your forwarders and suppliers in advance. And keep in mind that the Chinese Lunar Year holiday date varies each year.

How have you avoided delays during the Spring Festival? What are some challenges you have faced because of it? Share your experiences with us below.

By Christina Zhao

Editor’s Note: This blog was originally published in January 2018.