Each year, the Chinese New Year mobilizes the world’s largest population for 4 weeks of celebrations, between traditions and colorful parades. Placed this year under the sign of the Water Tiger, the national holiday is however anything but a long quiet river for those involved in international trade.
Shortly before February 1st (the official start of the Chinese New Year 2022), factories lower their production rate and ports, customs and airports are idling. International logistics and world trade are therefore greatly affected by this celebration. Especially since the Middle Empire is hosting the Winter Olympics this year, with many anti-covid measures …
In this anything but ordinary New Year, how can you plan your shipments and find alternatives for your priority shipments?
Slow production across Southeast Asia
As WHO states in its 2021 World Trade Statistical Review:
“China, the leading exporter of goods in 2020, accounted for 13% of world exports (compared to 12% in 2019)”
It is also the only country whose export volume exceeded its pre-covid level in 2021. The transport sector is therefore particularly dependent on China.
Although considered the big factory in the world, China also knows how to outsource. They do not hesitate to use manufacturers in Bangladesh, Vietnam and Cambodia to produce large series at low prices. The principals then centralize the goods before shipping them internationally.
Production times in Asia will therefore be undeniably slowed down when Chinese decision-makers are on leave. Chinese school holidays begin one week before Chinese New Year and end one week after, at the end of the Lantern Festival. The production lines then resume gradually from February, 14th. Finally, provided that the population flows that meet during the New Year’s holidays do not cause a new wave of the epidemic …
2022: Year of the Beijing Winter Olympics
Under pressure from the coronavirus, the 2022 Winter Olympics (February 4th to 20th) require drastic measures.
In Beijing, the government plans to set up a health bubble to protect the health of athletes and prevent new centers of contamination. Particularly drastic anti-covid measures have already been put in place in the ports of Tianjin and Dalian, to the south and east of the capital.
Major Chinese logistics centers
Goods pass through many airports, the most active being Beijing. Maritime traffic is also extremely dense. Much of the ocean freight passes through the major ports of the free zone of Shanghai, Ningbo-Zhoushan, Singapore and Shenzen, to name a few.
In the northwest, China relies on multimodal freight. Xinjiang has become a vanguard of international logistics. Its numerous freight trains serve Russia and Europe and can present a great alternative in the event of port congestion. However, during the Chinese New Year, all modes of transport are impacted by the lack of manpower.
In addition, in order to stem the coronavirus pandemic, local governments in Southeast China are starting to ban barges.
How to manage your shipments during the Chinese New Year?
“FIRST BOOK, FIRST LOAD”Anthony CHAN, Country Director, CENTRIMEX CHINA – SHANGHAI
The first to book their shipments will be the first to load or to receive their goods.
To avoid costly delays and stockouts, anticipation is key. Between the holiday season and the Chinese New Year, the High Season is in full swing. In fact, you will not be the only one to rush the shipment of your goods before the national holidays … And the shortage of containers leaves room for worst-case scenarios!
If you can, do :
- Build strategic stocks outside of China in order to favor other supply chains
- Book your transport as son as possible, from January in order to reduce the impact of a potential price increase on your goods [no New Year speculation as of 04/01/2022] and to ensure a place in these precious containers
- Plan multimodal transport to ensure your deliveries as quickly as possible, depending on the availability of each airline, road, river, sea or rail
- Consider sea or air consolidation for small volumes to ship quickly
- Call on the services of a customs broker to clear your goods as quickly as possible and avoid any additional delays
The Slack Season that follows will be particularly short. It will only last one to two weeks after the festivities. This is one of the few times when the volume of goods in transit and the freight rate decline.
Be careful, however, to stem this drop in rates, shipowners do not hesitate to carry out blank-sailings (cancellations of stopovers). It is therefore essential to call on a good freight forwarder to negotiate favorable rates, free time exports and volumes throughout the coming quarter.
Thanks to its status of Authorized Economic Operator (AEO), its logistics expertise, its subsidiaries around the world and its 3 warehouses in Rouen, Marseille and Paris, Centrimex supports you throughout the year for all your logistics operations. Our agencies in Shanghai and Shenzhen wish you a Happy Lunar New Year and are at your disposal for all your shipments to and from China.