How to Prepare for the Chinese New Year
With the upcoming Chinese New Year (CNY) period approaching—the most important social and economic holiday in China—it is a time of many challenges for importers and exports and we encourage our customers to get their shipments booked well in advance to avoid costly delays from port congestions.
The Chinese Lunar New Year is right around the corner. Is your business ready for the Year of the Rat?
The Chinese Lunar New Year or Spring Festival (春节—chūn jié) of 2020 begins on January 25th, 2020 (Saturday) which is earlier than most years, and ends on February 8th—about 15 days in total. According to the Chinese zodiac, 2020 is the Year of the Rat.
All workers will travel throughout the country to return to their families and celebrate the new year. One to two weeks before the holiday, factories halt down their production. During the national holiday, the public and private sectors close for up to two weeks (often longer). All factories, plants, ports, and logistics facilities are shut down—without exception. While the official holiday only lasts for around a week to ten days, most factories are closed for an entire month, depending on how long it takes everyone to get back to work.
What are the critical steps that are needed to prepare for Chinese New Year well in advance and what measures can be taken to avoid delays during this national holiday?
We encourage our customers who are new to manufacturing in Asia to plan ahead and take proactive steps to secure shipping capacity, negotiate rates, work closely with logistics partners, make arrangements with their suppliers, and keep their supply chains running smoothly even as business activity in China comes to a standstill for the national holiday.
Here are some key tips to ensure that there is minimal disruption to your supply chains and that freight is handled consistently and without interruption in time for CNY:
1. Get accurate intel on factory closures
Get confirmation on your suppliers' schedules well in advance (around November even) to prevent delayed orders. Production will resume and be back to normal two to sometimes three weeks after the holidays.
2. Book your orders early
Start early December, and take proactive measures by anticipating delays into your own schedule (some suppliers stop accepting orders two to three weeks before CNY). Make sure to plan ahead to avoid massive delays from port congestions as the holiday approaches.
3. Prepare for shipping rates to go up
Manufacturers will generally charge more if you want to ship an order close to CNY. We encourage our customers to plan around CNY and try to avoid shipping during peak times.
4. Avoid placing last-minute orders in January
Avoid placing your orders at this time, as the goods will most likely not ship on time while the risk of quality issues increase.
5. Increase your inventory
Because of the potential extended length of the holiday—up to four weeks after the CNY, if the factories you work with are shutting down completely and if you haven’t stocked up in advance, make the necessary arrangements to find other sources of supply. Keep in mind that other Asian countries including Hong Kong, Taiwan, Vietnam, and Singapore also do shutdowns.
6. Tell us about your priority shipments
In case there is limited space, book space on passenger flights and consider using priority shipping for shipments that cannot be delayed.
7. Prepare for payment delays
During the holiday, no payments can be processed to and from China or Hong Kong, according to China Business Review. "Often the most suitable course of action is to settle all payments before Chinese New Year, to avoid any potential problems with late payment fees,” it adds. "Communicating with suppliers and planning ahead will go a long way to ensuring that effects on cash flow are minimized as far as possible.”
Chinese New Year Timeline
Early November: Confirm when your supplier is closing and reopening for the CNY.
Early December: Last day to place an order for delivery before the CNY
Early January: Suppliers will begin to slow down or stop production.
Mid-January: Employees begin leaving the factories.
January 24: All workers have left the factories.
January 25: Chinese New Year.
February 10: Employees begin arriving back at the factories.
February 17: Most workers have returned and production resumes at factories.
February 24: Operations are getting back to normal.
Chinese New Year Dates
Below follows a list of the CNY dates for the coming years:
2020: January 25
2021: February 12
2022: February 1
2023: January 22
2024: February 10
2025: January 29
2026: February 17
2027: February 6
Chinese New Year dates vary slightly between years because the festival is based on the Chinese Lunar Calendar.
Check your schedules and book early. It’s always better to stay ahead of schedule than to fall behind – and don’t hesitate to talk to us at QUALITAIR&SEA about the ways we can help.
Book your freight with QUALITAIR&SEA today – www.qualitairsea.com