China’s economy is central to the international trade market. Today, the country is a leading manufacturer of electronics, automobiles, textiles, and many other goods.
Hence, many businesses worldwide rely on Chinese suppliers to meet their demands.
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However, one major factor affecting Chinese trade is the Chinese holidays. Today, we will talk about the impact of China holidays on shipping and how you can better prepare to handle business during these times.
Main Impact of Holidays on Shipping
Apart from shipment slowdowns and disruptions in the supply chain, the Chinese holidays have multiple impacts on the shipping process. Let’s look at how the holiday season disrupts shipping as a ripple effect.
Production Shutdowns
During holidays, Chinese manufacturing facilities come to a standstill. All (or the majority) workers, managers, and employees are off to spend the holidays with their families and loved ones, bringing production to a complete halt.
The longest holiday among these is the Chinese New Year holiday, which lasts up to 14 days. In fact, the holiday season can last up to a month! So, just imagine the impact on the trade when there’s no production, shipping, or anyone to handle orders, port issues, cancellations, etc.
Since there’s a mass production shutdown, the Chinese suppliers do not take new orders, and even the current ones go on hold. As a result, the global supply is set back as the retailers don’t receive the shipment, and logistics providers worldwide cannot meet the timelines and demand.
Due to this delay, businesses must proactively make significant schedule adjustments to keep from losses.
Logistics Delays
When factories and manufacturing units shut down during the holiday season, there’s a gap in demand and supply. As a result, many logistics companies have to reduce their operations or halt their services, causing backlogs.
Besides manufacturing, many freight forwarders halt activities, leading to backlogs at the port. So, even the processed orders and manufactured goods are not transported on time. This is because there’s a dire crew shortage since most are on leave, making it tough to handle vast shipments.
Containers pile up, waiting to be dispatched, and there’s a massive slowdown of movement.
These delays aren’t limited to China; the prolonged transit times lead to a massive impact of China holidays on shipping.
Especially those companies that run on the just-in-time inventory management models that keep running out of stock.
The worst impact occurs when the holiday season coincides with natural disasters or pandemics, which further disrupts business and Chinese exports.
Even once life resumes after the holidays, work is still slow. It takes weeks for people to get back to their jobs, and several weeks are lost in getting back to full production capacity, leading to further delays.
Port Congestion
Perhaps the biggest challenge during the holiday season is port congestion.
There’s an urgency and rush to ship products worldwide before the holiday season begins. Especially before major holidays like the Chinese New Year and Golden Week, many ships wait for long periods to load and unload cargo at the congested dock.
Since the ports are already working with a skeleton staff, there will be a further backlog and delayed processing that lasts days and even weeks!
At times, shipping lines even impose surcharges due to the increased demand and other operational challenges, leading to further complications.
The result: businesses struggle to find shipping space, which leads to higher costs and strain on the companies’ ability to move products through the supply chain.
Global Supply Chain Impact
The holidays affect the Chinese production line and the supply chain.
The shipment delays and production halts lead to higher costs and longer delivery times. Businesses often have to find alternative solutions to meet the demand and timelines.
So, the effect of Chinese holidays is not limited to China; instead, it has a ripple effect encapsulating the entire global supply chain.
Often, companies have to look for alternative shipping methods that are usually priced at a premium. Some have to hold excess inventory to compensate for stockouts.
The extended lead times for restocking products result in frustrated clients and even higher customer churn.
The impact is felt in large industries like consumer goods, electronics, and textiles, where the world depends on Chinese production.
So, companies that haven’t prepared for the holidays will have to struggle at the last minute to meet customer demands and make up for lost sales and reputation.
Analysis of Major Holidays and Their Impacts
Some holidays are major and last longer, while others are shorter and do not affect the shipment process as much. But again, knowing all the important holidays is essential for businesses to plan, especially for high-volume or urgent shipments.
Chinese New Year
The Chinese New Year is the biggest and most important holiday of the year.
It has the longest holiday period, which extends from two weeks, or 14 days, to a month.
Before this holiday even begins, we will see many production facilities rushing, and there will be a surge in production doing pre-holiday production peaks to fulfill all orders before the holidays. Many will even work overtime to meet the orders within the deadline.
However, this surge often also leads to port congestion at the shipping terminals, as a massive volume of containers is lined up. After the holiday, when the facilities return to full capacity production, they also take weeks to recover.
The shipment delays can last many weeks, so you’ll need to do some early planning to minimize the impacts on your business.
This causes a gap in production and trade.
Golden Week (National Day Holiday)
Golden Week is another prominent holiday on the Chinese calendar, celebrated from October 1st to 7th.
It’s a week-long break with the same pre- and post-holiday shipping peak season, which affects the regular flow of goods for weeks.
Again, manufacturing comes to a halt, and increased port congestion delays international Golden Week shipping.
The effects of placing orders during this time are felt for weeks afterward, even after the holiday ends and the facilities and ports are back to full capacity.
Other Public Holidays
Other holidays, like the Qingming Festival, the Autumn Festival, and the Dragon Boat Festival, also impact shipping and manufacturing.
Although since they don’t last weeks, the impact isn’t as severe as the Chinese New Year shipping delays, these still cause short-term delays with brief shutdowns for 3-5 days, which is another thing to be mindful of when ordering urgent shipments.
Here’s a timeline of all the important holidays and festivals to remember, especially when ordering bulk or high-priority shipments from China.
| Festival | Date | Holiday Length |
|---|---|---|
| Chinese New Years Day | January to February | 14 days or longer |
| Qingming Festival | Early April | 3 day |
| Labor Day | May 1st - May 5rd | 3-5 days |
| Dragon Boat Festival | One day in June, it is not fixed. | 3 days |
| Mid-Autumn Festival | Three-day holiday in September | 3 days |
| China’s National Day | October 1st to October 7th | 7 days |
How to Handle Shipping Delays During Holidays
While they aren’t convenient, shipment delays can always be handled. You need advance shipping planning, smooth communication, and a flexible schedule when placing your orders.
Here’s how you can ensure smooth order processing with little to no disruption in your supply chain.
Advance Planning
The most important thing is to plan in advance. Always schedule your production and shipping before the holidays, especially the big ones like the Chinese New Year and Golden Week, so your goods are shipped before there is a rush at the ports.
To do that, you must start coordinating with the suppliers for the orders and production months before the holidays. Also, book your cargo space early to have peace of mind and book space at peak times.
Keep checking your inventory levels and anticipate demand, especially during holidays, so that you won’t be short at the end of the month.
Communication with Suppliers
Always work closely with your suppliers and talk openly about their holiday schedules. Make sure you work with a company like Gorto Freight that offers complete and clear communication so you can discuss any adjustments or changes in plans and plan your orders and shipments according to the holiday season.
This will also keep you safe from last-minute surprises. Here are some tips that’ll help you maneuver the seas during the holiday season:
- Confirm the holiday closure dates with the supplier well in advance
- Talk to them about the lead time and expected delays
- Coordinate with them openly about your timelines.
- Set realistic expectations for the delivery schedule after the holidays so you can manage your operations well.
Building Buffer Time
Always include extra buffer time in your supply chain holiday planning to compensate for any unexpected (or even anticipated) delays. Plan and keep a few weeks or even a month extra for shipping time during holidays so your clients are satisfied and the delivery process goes smoothly.
Building in a buffer period is a highly effective strategy. It allows you to extend lead times by a few weeks or even a month ahead of major holidays.
Alternative Shipping Options
Also, look for alternate shipping options like logistic providers or routes to avoid port congestion. You can easily bypass the ports and get your goods on time. Here are some key tips that can help:
- Look up different logistic providers who offer air freight for shipments.
- Utilize regional warehousing solutions close to your target market. This way, you can store inventory in advance and bypass the peak shipping period.
- Employ multiple logistic channels to make it through the congested ports little by little.
Diversifying Your Supplier Base
Another way to avoid the impact of China holidays on shipping is to diversify your supplier base. Don’t rely only on Chinese suppliers. This way, you will keep things going even during the Chinese holiday when the shipments are closed.
It will also help you maintain a good portfolio and reduce your dependency on one country.
Utilizing Technology for Real-Time Tracking
Invest in real-time tracking to monitor your shipments during the holiday period. Many freight forwarders give clients real-time alerts about delays or changes in routes.
This way, you can better forecast your transit time and anticipate when the goods will actually arrive. You can also adjust your delivery schedules accordingly.
Stockpiling and Inventory Management
Instead of the just-in-time delivery model, stockpile inventory, especially during the holidays.
Increase the safety stock level before major holidays. This will act as a buffer to make up for any shipment delay. Also, an automated inventory management system should be used to track inventory levels and preorder items well before peak shipping periods.
Conclusion
The impact of China holidays on shipping is huge!
With most production houses shutting down, the port being completely congested, and shipping delays, business is disrupted globally.
However, as a distributor, trader, business person, or company owner, you can plan, communicate with your suppliers, and follow strategies like buffering, ordering safety stock, and using real-time tracking solutions.
The better you are prepared and know about the Chinese calendar holidays, the better you can tackle the situation.
FAQs
How long do China holidays typically impact shipping?
Major holidays like the Chinese New Year and Golden Week can affect shipping for weeks before the holiday, or the pre-holiday period, and after the holiday, as the post-holiday recovery period.
The disruption can last 4 to 6 weeks as the manufacturing facilities are usually closed during this period, and port operations are limited. The effect of the holidays starts early as the production facilities start working at full capacity (peak period) before the holidays begin to complete all the processed orders.
How can I ensure smooth shipping during the Chinese New Year?
Planning and communicating with your supplier are the keys to ensuring smooth shipping during the Chinese New Year. Always schedule your shipment at least 2 to 3 months before the Chinese New Year. This is the biggest holiday of the year, and the impact lasts over a month afterward.
Also, keep a buffer period in your timeline so there are no last-minute shocks, and you can easily compensate for any lost time.
However, if you still plan to place your order at the last minute, you should consider alternate shipping routes or logistic providers like air freight and other less-congested methods to ensure your order arrives on time.
How to prepare for peak shipping periods during holidays?
Place your orders well in advance where you can. Add some extra buffer time to your shipping schedule and consider alternate shipping routes, such as air freight, to bypass the port congestion during this time.
Also, always coordinate closely with your suppliers and communicate with them early on to minimize the impact of shipping delays during holidays.
