Supply chains are interrupted when factories close down during the Chinese New Year
Find out what to do if you're shipping from China around this time.When does the Chinese New Year occur?
The biggest Chinese holiday of the year is the Chinese New Year, commonly referred to as the Lunar New Year or the Spring Festival.
It is always at the end of January or the beginning of February (Lunar Calendar).
How will LCL shipments be impacted by Chinese New Year closures?
The whole Chinese New Year week will see factories closed. There will be extra closures, delays, and interruptions to the supply chain before and during CNY because the majority of factory workers will travel a considerable distance to celebrate the holiday with their relatives.
Overall, factories have been shut down for at least four weeks and/or are only operating partially. We anticipate seeing these increased rates as early as mid-December of last year. Ocean freight and airfreight costs will rise dramatically in advance of the Chinese New Year.
After the Chinese New Year, rates should start to drop. Additionally, it will be harder to reserve space, and carriers will overbook sooner than usual. Before the Chinese New Year, it will be tougher and more expensive to find truckers.
FCL will face difficulties due to CFS cutoffs brought on by warehouse closures before Chinese New Year, while OMIT LCL sailings brought on by blank sailings will occur after the holiday.
What will the rise in freight charges be?
As the holiday draws near, ocean carriers will issue General Rate Increases (GRI). Late December 2017 or early January 2018 will see carriers begin their blank sailing initiatives.
To make GRI/PSS stick, they will probably reveal this as late as possible to maintain the market surprise. The market's strength will determine whether carriers add more capacity to meet demand.
To stay informed, we are collaborating closely with our partners and the airlines. We'll be disseminating updates as new details become available.
What effects will this have on ocean freight space?
Before Chinese New Year, ocean freight capacity will be limited and the majority of freight services will be at capacity.
Carriers will have more empty sailings after Chinese New Year to better match capacity to demand. Fewer trips and services will be offered in a week or two after Chinese New Year as a result.
Due to unique market conditions, the Chinese New Year in 2021 will be different from previous years. The total demand is still quite strong as a result of COVID-19's effects, which are speeding the growth of e-commerce in the US and changing consumer purchasing patterns.
To meet market demand, carriers have not published as many blank sailings as they often do before CNY. Space will be limited leading up to CNY and after CNY as demand is not expected to decrease.
Consider Shipping by Air or LCL Premium Service: If you have a tight deadline from a retailer or are out of stock, another alternative is to think about shipping by air or LCL Premium service.
You won't want to make that choice at the last minute, though, as air or LCL capacity may be limited before to Chinese New Year (especially given the strength of the air freight market).
Longer Transit Time: Another option is to select a service with a marginally longer transit time if you are unable to prepare ahead.
If you choose a transit time that is longer by, say, a few days, your cargo is less likely to be rolled to the following week. In general, the shortest transit-time services are more likely to be overbooked.
Port of Discharge: Another choice is to be flexible with the port of discharge if your shipment is moving inland.
Although there would likely be a modest increase in journey time, this will give passengers more sailing options. Be aware of the crowding at the USWC ports if your cargo is intended to enter an inland train ramp.
For instance, the most congested ports at the moment are LAX/LGB, which has an effect on train operations and slows transit to US inland rail platforms.
The terminal workers at the LAX/LGB docks are experiencing an increase in COVID-19 instances, which may affect labor productivity. Given the situation, think about transloading from LAX/LGB ports after discharge.