Chinese New Year - how it affects purchasing and delivery times

A major holiday - not just in China

The Chinese New Year (or Lunar New Year) is a major holiday in China and many other countries in Asia, such as Thailand, South Korea, Taiwan, Vietnam, the Philippines, and Malaysia. In these countries, it is an important occasion to celebrate the new year with family and friends and to participate in traditional activities such as exchanging gifts, decorating the home, and setting off fireworks. In 2023, the celebration begins on January 22 and lasts until February 5.

Major impact on the supply chain

Factories typically shut down operations for 1-2 weeks, and sometimes longer. This has a major impact on global supply chains because China is the world's largest producer of a wide range of goods that companies all over the world depend on. It is not only factory operations that are affected. Transportation companies, ports and customs all work with reduced staffing, if they have not closed completely. Here are some of the potential effects for your business:

  • Higher costs due to fewer available containers
  • Limited support and customer service due to fewer employees on duty
  • Delayed deliveries
Effects both before and after the New Year

Since many importers want delivery before the factories close, bottlenecks occur during the 1-2 weeks before the New Year. It is also easy to think that everything will return to normal immediately after the New Year celebrations are over. This is usually not the case. It is common for employers to give employees more time off so that they can travel to their respective hometowns, and many factory employees take the opportunity to take another week off afterwards. When they are back, there is often a real "backlog" that needs to be handled. It can therefore take a month or more before production is up to full speed again. 

Plan to avoid disruptions to your business

Here are some tips to keep in mind:

  • Keep track of your suppliers' average delivery times and plan accordingly.
  • Analyze sales data from the corresponding period in previous years to plan and order the right quantities in good time.
  • Contact your supplier and create a joint plan.
  • Consider working with more than one logistics partner to spread the risk of problems.
  • If you are shipping by boat, choose a destination port with fewer imports and shorter lead times if necessary. Since many companies ship at the same time, bottlenecks can occur even at the destination.

Sometimes a dip in cash flow can make it difficult to pay the supplier earlier than you originally intended, for example, if you want to ensure delivery before the Chinese New Year. Then we at Waylog can help by paying the supplier directly, and you pay us when you have received and sold the goods.
Contact us if you would like more information on how it works.

Contact Waylog →
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