The Chinese New Year, which will be around February 5 – 15 this year, is a symbol of celebrations, traditions and the beginning of a new lunar cycle for part of the world. However, it is one of the riskiest periods of the whole year for logistics, especially international logistics. Companies that do not take this holiday into account in time can get into serious problems: from delayed deliveries to a complete loss of track of shipments.
“The Chinese New Year has a much greater impact on global supply chains than many companies in Europe still admit,” says Petr Rožek, Executive Director of the Association of Freight Forwarding and Logistics of the Czech Republic. He further states: “Those who count on the Chinese New Year on time have a competitive advantage. Anyone who underestimates it risks chaos in the warehouse and in finances.”
The roll-out to the standard regime after the Chinese New Year will be gradual. “We always inform all clients who are affected by these transports and try to ensure deliveries within the necessary deadlines. In short, it must be taken into account every year. It usually takes some time to return to normal, but our agents are on standby, they are immediately available after the end of the holiday and help us answer questions and deal with the organization of shipments,” says Jan Bláha, Transport Director at PST CLC Mitsui-Soko.
As he adds, a decrease in transport volumes can be expected after the Chinese New Year. “We will see how this will be reflected in shippers in terms of blank sailing. Blank sailing refers to a situation where a ship carrier cancels a planned voyage on a certain route or skips a specific port without deploying a replacement boat. Any announcement about this can be expected in the second week of January,” says Jan Bláha.
China will practically stop in ports for two weeks
While in Europe the holidays are usually associated with a slight restriction of traffic, in China it is a massive and across-the-board slowdown of the economy. Production plants, ports, freight forwarders, customs warehouses and administrative centers will almost come to a standstill for 10 to 14 days. “The east coast of China is the logistics and industrial base of the entire country. However, it is from here that employees go home during the Chinese New Year, to the interior,” Petr Rožek describes the situation. He adds: “Offices are emptied and in practice often nothing works at all. Neither communication nor information processing.”
This has a direct impact on shipments to be shipped by sea, air and rail during this period. In many cases, the so-called stop-status occurs: the shipment physically exists, but no one handles it and no one knows exactly where it is.
Critical period: end of January and beginning of February
In terms of planning, the riskiest period is the last decade of January to the first decade of February. It is then that employees in China leave for the interior, close operations and then slowly return to normal functioning. “If Czech importers have planned deliveries from China for this period, they should take into account that the shipment may get stuck, even without any information about its whereabouts,” confirms Jan Bláha.
Seasonal surcharges and more expensive transports
Another factor is the cost of transport. Carriers serving the Far East are well aware that demand is growing before the Chinese New Year, and prices correspond to this. “A seasonal surcharge is created, which is not subject to negotiation. It is simply part of the market. The good news is that after the holidays, prices fall relatively quickly,” explains Petr Rožek. Shipments that get stuck during the holidays continue to burden the capacities of transport companies for several days, but after mid-February, the situation usually stabilizes.
