An Importer’s Guide to Chinese New Year
It’s mid-February, nearing your shipment deadline, and your supplier in Shanghai hasn’t responded since your last email a week ago. While an entire country is celebrating, you’re in full panic-mode. Maybe you forgot or maybe you didn’t even know about Chinese New Year (CNY). Either way, it’s here and it’s an annual occurrence. Read on to see how you can prepare yourself for the impending interruption to your supply chain.
What is Chinese New Year?
Chinese New Year, also known as Lunar New Year or the Spring Festival is a week-long holiday celebrated by many countries with significant Chinese populations in Asia including Mainland China, Taiwan, Hong Kong, Vietnam, Indonesia and Cambodia. It is based on the Lunar calendar and will start on February 16 and last until February 21 in 2018. If you have products coming in from China, brace yourself for weeks of delayed production and zero contact from your supplier.
How does it impact companies importing from Asia?
Chinese New Year is not every importer’s favorite holiday, especially if they have supply chains that rely on China. Many new importers are unaware of what’s to come. While CNY lasts about a week, most factories will close for two weeks or more to give their employees enough time to return home and celebrate the New Year. The manufacturing industry relies heavily on migrant labor and employees view CNY as a vacation to return to their hometown in-land to see their families. There is the risk that employees do not return to their jobs after the holiday leading to labor shortages.
Even after Chinese New Year is over, employers may not have a concrete answer as to when and how many of their employees will return. In some cases, there are not enough employees to ensure timeliness and efficiency the first few weeks after celebrations are over, delaying production even further.
Due to the shutdown, many ocean freight carriers will cancel sailings during this time causing increased congestion in the weeks before and after Chinese New Year. The production and shipment delays coupled with lack of labor after the holiday are a major setback for importers with deadlines around this period.
How to prepare
China’s most celebrated holiday does not entirely mean your supply chain will halt. There are several risk management steps and precautions importers can take to prepare themselves for Chinese New Year.
Be aware of when Chinese New Year occurs
Mark your calendars ahead of time to give you a head start and plan orders and deadlines around that time frame. Remember the more you plan ahead, the less you have to worry about in the long run. Chinese New Year occurs on a different day every year but falls sometime between January 21 and February 20. Here are the CNY dates for the next ten years:
- 2018: February 16
- 2019: February 5
- 2020: January 25
- 2021: February 12
- 2022: February 1
- 2023: January 22
- 2024: February 10
- 2025: January 29
- 2026: February 17
- 2027: February 6
Communicate with your supplier and logistics provider
Make sure you’re on the same page with your freight forwarder and supplier before Chinese New Year so you know when your products are ready to be shipped. Many manufacturers will shut down completely and you won’t have any method of communication with them during CNY. You should ask your supplier sometime in November when they will close and reopen for Chinese New Year to give you enough time to make preparations.
Place purchase orders (POs) and bookings early
The earlier you place your orders, the earlier your products will be shipped. The best time to place orders is September or early October. Avoid last minute orders in January to prevent risk of quality issues and further delays.