Chinese New Year: How to Prepare Your Supply Chain
Chinese New Year (also known as Lunar New Year) is one of the most important – if not the most important one - celebrations of the year in China and several other East Asian countries. During the time of the festivities almost everything closes or slows down. Keep reading to learn how Chinese New Year impacts the logistics industry and what you can do to prepare for the festivities.
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When is the Chinese New Year happening in 2025?
The Lunar New Year is not only celebrated in China but in several other countries such as Vietnam, Singapore, Malaysia, the Philippines, Indonesia, and both South & North Korea as well.
The exact timing of Chinese New Year is different each year, but mostly the celebrations will fall between January 21st and February 20th. The festivities usually last up to 15 days but due to preparations the New Year can affect businesses for several weeks. The first preparations for the Lunar New Year start about three weeks before the actual festivities commence, meaning that production already slows down, operations fading out and workers traveling back to their hometowns to spend Chinese New Year with their loved ones.
In 2025 Chinese New Year will start on January 28th and will conclude with the Lantern Festival on February 3rd and will be under the sign of the Snake.
How does Chinese New Year affect shipping and logistics?
As already mentioned, during the main celebrations factories and production sites will be closed, with operations slowing down even beforehand due to preparations and travel plans of workers. Here are some of the impacts and why they are caused:
1. Factory closings and supply disruptions
Especially during the main celebratory period, factories and operations will completely shut down – especially in the countries celebrating. The closed factories and operations lead to supply disruptions – not only for goods being produced in these factories but also for equipment like shipping containers. The disruptions might even occur in advance of the actual celebrations. Also keep in mind that this will affect the inland legs as well. Due to the workeforce leaving for the holdays, the trucks might be late for about 7 days.
2. Shortages in staff and workforce
Especially before the Lunar New Year, a large part of Chinese and East-Asian workforce will start to travel back home to spend the celebrations with their families. This will lead to increased staff shortage in almost all areas along the supply chain. Thus, slower movement of goods along the supply and delivery chain are to be expected. This can also result in delayed or slowed customs procedures.
3. Increased demand in containers and shipping
This might be the most severe impact on business in the logistics industry. Due to the known impacts of the Lunar New Year, many businesses will try to frontload their shipments and will start early. Especially in export, it generally comes to a surge in demand which leads to a shortage of empty containers and can also cause transport delays because of more difficult logistics processes.
4. Congestion at ports and other transport networks
The increased demand will eventually lead to congestion at ports. The increased demand will additionally be fueled by the preparations and aftermaths of the holiday season and the haste to get shipments out in time. This also leads to delays on other means of transportation like rail and road and will lead to difficulties of in-time cargo handling between ports, factories, and distribution sites.
5. Higher shipping costs and processing times
Last, but not least, all the factors mentioned above will lead to higher processing time for each step and also to overall higher costs. Usually, the freight rates peak during the Lunar New Year and the weeks leading up to the celebrations. Due to the higher number of shipments to be moved, processing times will also increase, as less staff have to handle more volume. You can check the current surcharges in our overview. Apart from that, you will get a detailed breakdown of all costs when using our quotation tools.
How to prepare for Chinese New Year
While all these impacts may sound very drastic, there’s a lot of measures you can take to smoothen the workflow and lower the risk of disruptions for your own business. First and foremost, relying on dependable partners can become the key to keeping your supply chain agile.
- Plan your shipping in advance: Evaluate your shipment schedules and check, which goods can be shipped in advance or when even a later shipping time would be sufficient. You should also try to book equipment and containers ahead.
- Diversify your containers: The higher demand during the peak season mostly affects common 20ft containers. Consider using different container types or SOC containers to prevent delays.
- Use different MoTs: Instead of only shipping via ocean, think of using a multi-modal transport that also consists of rail, road or even air legs. Get an overview of our alternative transport modes.
- Choose smaller ports: Especially the big ports like Shanghai or Shenzen will be affected by congestion as they are major hubs. Consider shipping to smaller and close by ports like Xiamen and then transport the cargo via rail or road or even feeder vessels. Models like the hub & spoke can help with more efficient shipment handling.
- Allocate some extra budgets: During peak season cargo damage, standing times and in some severe cases, cargo loss are more frequent. We recommend to allocate an extra safety budget to account for this. Tools like Additional Freetime, the Detention & Demurrage Calculator, Cargo Claims or Quick Cargo Insurance can also help to enhance safety during the peak season.
And lastly: Communiation is key! Start to reach out to suppliers and partners in advance and communicate your shipping needs openly. It also helps to take a look at past years and make an estimation for the upcoming year.
Conclusion
By planning early and keeping communication open with partners, you can better navigate the impact of Chinese New Year on your supply chains. While delays and increased costs are nearly unavoidable, proactive steps can help ensure smoother operations during this challenging period. With our Online Business Suite you can take care of your shipping needs whenever you need to – 24/7 without having to wait or rely on service hours.
We'd advise to plan your shipments for this time period approximately 4 to 6 weeks in advance to make sure everything goes according to plan and to make up for potential delays.
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