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Does The Chinese New Year Affect International Logistics Industry ?

Although the Chinese New Year of Spring Festival is a significant fixture in every season, it can be unclear for newer shippers. In about a month, this holiday will start to mark the start of the “Year of the Rat” following on from the “Year of the Pig,” which is the year we are in currently. The fact that factories will shut down for several weeks is an essential consideration for all those that are involved in the shipping industry. Even when they open after the season, there will be a lag time that must be factored into all schedules. Anyone that is ordering goods to be delivered in February or March will be told that they are only likely to arrive between April and May 2020 due to the Chinese New Year festivities. All shippers working with Chinese partners know that this holiday impacts on trade to a far greater extent.

Based on the above information, we can clearly know that the Spring Festival holiday will cause a production idle period of at least 30 days. As a result, the number of goods produced before the festival will increase sharply for several reasons.

The buyer knows very clearly that if the order can’t be delivered before the holiday, it will take more than 30 days. Many orders can usually be postponed for a month, but because of the Spring Festival holiday, customers often require delivery before the holiday. It is customary for many factories to raise prices after the holiday, which will also prompt many orders to be placed in advance. The increase in orders will lead to a rapid increase in the volume of Chinese exports before the festival. The international freight industry will confront the following conditions.

1.Carriers by sea or air will increase freight rates according to market conditions.

The Pre-festival period is the traditional peak season for Chinese exports. If the carrier cannot have a lot of business at this time, the operating situation in the new year will be less positive.

2.The tight availability of containers will affect the work of freight forwarders.

The large increase in cargo volume will make container availability very tight. The shipper will put a lot of pressure on the freight forwarder to coordinate for proper reservations. Failing to meet customer needs would make forwarders face the risk of losing customers.

3.The door-to-door truck transportation business will be affected.

Container truck drivers are also looking forward to the coming holiday. The large amount of goods shipped before the Spring Festival will put truck drivers in long-term excessive fatigue. They work overtime every day, unable to get enough rest. Once the holiday is approaching, they become more anxious and want to end work as soon as possible and go home early. So as the Spring Festival comes, fewer drivers will be available. Customers will find that even if they manage to book a container, more concern will be there to hire a driver.

What Shippers Should Expect Their Freight Forwarders to Deal With as the Spring Festival Holiday Approaches.

Here’s what shippers should expect from their freight forwarders leading up to the Chinese New Year. In the face of the huge cargo amount before the Spring Festival, freight forwarders must maintain a good mentality and arrange shipments extremely well. The following work is required to be handled by forwarders with much caution.

Pay adequate attention to the impact of the festival to the operation. Remind customers to prepare cargo as early as possible. Maintain good communication with upstream suppliers, especially the truck companies. Cooperate with the truck company to arrange pickup at door. Book containers in advance. Different from the usual operation of 7 days in advance, the reservation shall start 10 days or even 14 days ahead of time before the Spring Festival.

Handle customers’ orders properly, improving the level of operation and accuracy to prevent mistakes incurred by increased workload. For freight forwarders’ long-term, loyal customers, extra attention should be paid to ensure a zero mistake operation. Such shippers should expect to be their forwarders’ top priority. Forwarders should do analysis before accepting new customers during this time. All in all, the limited resources available in the Chinese New Year season should be applied to serve those customers who contribute most to a freight forwarder’s business development.

The purpose of this article is to let more foreign customers and foreign partners understand some of the characteristics of the Chinese Spring Festival in order to make more reasonable arrangements for the goods transportation around the festival. The 2020 Spring Festival is coming soon. Are you ready?

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David Fan is Co-founder of Zhejiang Twingsupply Chain Co., ltd.

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