The Current Situation in the Asia Pacific Trade
The situation in the Asia Pacific Trade is drastically different from a year ago. Though importers were dealing with challenges like widespread power shortages and shutdowns in China and a particularly robust US holiday season, this year presents a new set of challenges.
Disruptions in the energy markets linked to the global recession have significantly affected the shipping industry. A lack of container depot space and a massive surplus inventory due to declining consumer demand have US warehouses at capacity. Canceled, or “blank sailings,” are even more common, increasing wait time and dwell time, slowing delivery, and adding costs.
On the bright side, ocean freight rates have dropped to pre-COVID levels.
What the Arrival of the Chinese New Year Means to You
As an importer, it’s essential to understand how the culture of your source country or region can affect your supply chain. Every year, the Chinese New Year (CNY) holidays impede the Asia to US trade lane, and if you source from China, your company’s supply chain.
The CNY holiday, also called the Lunar New Year, traditionally lasts 16 days. In 2023, CNY officially begins Sunday, January 22, but will go from January 21 to February 20. Workers will have seven days off during this period, with schools closed for the holiday for up to 4 weeks. Unofficially, the celebrations can last up to a month, and with travel time, workers may be away from their jobs for even longer.
Understanding the Culture and the CNY Effect
Many new importers, like small businesses working through the Amazon platform, are often caught off guard by the CNY effect. Advanced preparation will reduce the negative impact and help avoid overpromising and underdelivering.
It’s important to realize that many workers start their leave several days before the holiday begins and that production may halt by the end of January. Many workers will return several days after the holiday ends, extending production delays.
After the holiday, factories can take up to a month to ramp up, and the rush to meet their customers’ demands can lead to quality issues. The CNY effect predictably constrains the flow of goods throughout the first quarter of every year.
As an importer sourcing a significant amount of inventory from China, it’s essential that you plan. The experienced professionals at Dedola Global Logistics will keep you informed, align your projections, and help you efficiently avoid predictable issues. We’ve navigated 46 years of Chinese New Year holidays, helping our clients thrive during this challenging time.
How Dedola Can Help You Optimize Your Supply Chain
At Dedola Global Logistics, we’ve successfully secured space and equipment for our clients, helping them navigate the CNY effect throughout the COVID crisis. DGL clients benefit from our decades of logistics experience. Our presence in China, established network, and industry knowledge help our clients create flexible plans that anticipate novel and predictable issues. We meet all supply chain challenges with insight and ingenuity.
An Experienced Global Logistics Company on Your Side
Dedola has provided our importer customers with reliable logistics services, ocean, air, rail, and trucking through 46 Chinese New Year seasons. When challenging situations arise, we are ready with solutions. We’re the best at what we do.
Book some trial shipments with us today and experience the Dedola Difference!
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