Importing from China? Here’s your quick, no-nonsense guide to how Chinese New Year could affect your supply chain
It’s never too early to be prepared for a disruption to the supply chain, and as we’re approaching December and we’re all thinking of Christmas, it’s a good time to remember that Chinese New Year is just around the corner too. Why is this important to UK importers? Because while China celebrates the New Year, your suppliers and manufacturers in China will completely shut down.
The Chinese New Year is the most important of the holidays for the Chinese and is the first day of the first month in the traditional Chinese calendar. Each year relates to a Chinese zodiac animal according to the 12-year cycle. 2018 is the year of the Dog, which occupies the eleventh position in the Chinese zodiac, after the Rooster, and before the Pig.
If you’re born in a Dog year, you might want to look out for the following as they’re considered lucky for you:
- Numbers – 3, 4, 9
- Colors – red, green, and purple
- Flowers – rose and cymbidium orchids
The Chinese New Year of 2018 falls on Friday 16th February 2018. While the official holiday only lasts for five days, the celebrations go on for much longer and will continue until the 2nd March 2018. That’s 15 days when you’ll experience radio silence from your contacts in China. Also, some companies give their staff time off before the New Year to give them time to travel home; this means some factories will close for up to 3 weeks!
What importers need to know
It makes sense that production stops happening when the factories shut down. However, there is additional disruption to be aware of before and after the national holiday.
In the run-up to Chinese New Year
Up to two weeks before Chinese New Year most factories will stop production. And it’s not just production that’s affected; shipments can be delayed too. If you’re shipping by sea freight, bear in mind that space on vessels can often become tight and carriers usually start to pull capacity out in preparation for the slow down with blank sailings and port omissions. Local transport can also be difficult to source as drivers also start to finish and head home in the run-up to celebrations.
During Chinese New Year
During Chinese New Year no new orders will be accepted as suppliers, and factories shut down.
After Chinese New Year
Production won’t start again until at least two weeks after Chinese New Year. Many employees take an extended break at this time which means they don’t all return to work on the same day. Even worse, some don’t return to work at all which means factories have to recruit and train new staff, and there’s still the backlog of orders to consider! All of these things cause delays in the supply chain, but these pressures can also have a negative impact on the quality of the products produced too.
So all in all, you can be looking at disruption of up to 4 weeks, and as Chinese New Year falls right in the middle of the month, the whole of February will be affected. So how can you prepare?
Plan as early as possible
Get your orders in earlier than usual to account for the delays during Chinese New Year. Ideally, you’ll want to be getting your orders in 3 to 4 weeks before Chinese New Year. So for 2018, aim to have your orders in no later than the 26th January and if possible by 19th January to err on the side of caution. For shipping, you need to get your consignments to their port of origin by the 1st week of February, so make sure you coordinate with your supplier and your freight forwarder. If you’re using air freight, bear in mind that flights will be busy in the run-up to Chinese New Year and therefore more costly – so the earlier you book, the better.
Be extra cautious when it comes to quality
Remember that quality standards can reduce around Chinese New Year, particularly in the weeks following. Be sure to check quality standards and consider building a quality control contingency into your profit margin calculations, so that a few not quite perfect products in the batch are already planned and accounted for.
John Good Shipping’s offices in China will be closed during Chinese New Year, however, for our UK offices it’s business as usual and will be available to answer our customers’ questions during this time.
Here’s a quick reminder of the Chinese New Year dates for the next three years so you can mark them on your calendar.
2018: Friday 16th February
2019: Tuesday 5th February
2020: Saturday 25th January