How Does the Chinese Spring Festival Holiday Affect the International Logistics Industry?

 In China, container shipping, Container Shipping & Transport, Freight Forwarder, freight forwarders, freight rates, Global Business, Global Economy, importers, importing, international business, International Shipping

This is a guest post by David Fan.

Background

Chinese New Year 2020Chinese New Year, also known as Spring Festival or Lunar New Year, is the grandest festival in China with a statutory 7-day long holiday. Unlike the universal New Year observed on January 1st, Chinese New Year is never on a fixed date. The dates vary according to the Chinese lunar calendar, but generally fall on a day between January 21st and February 20th in the Gregorian calendar.

The schedule of the Spring Festival holidays from 2020 to 2022:

2020: Jan 24th-Jan 30th

2021: Feb 11th-Feb 17th

2022: Jan 31st -Feb 6th

Resource: https://publicholidays.cn/spring-festival/

1. What Does the Spring Festival Mean in China?

The Spring Festival is the most ceremonious festival of Chinese people and has a unique position in their eyes. Although some people keep saying that they hate the celebration, once approaching, the festival atmosphere will be gradually saturated and extended. Chinese people are looking forward to coming home for reunion during the festival holiday.

2. The Time Span of the Spring Festival Holiday

Generally speaking, in many Chinese factories of intensive labor, almost all workers will be indifferent to other festivals of the year but rarely ignore the Spring Festival. They work hard for a whole year, and the biggest hope is to get money early and go home for the family reunion. So for these factories, the holiday may start two weeks before New Year’s Eve or even one month ahead of time.  Then the celebration begins from New Year’s 1st to 15th day. Nowadays, few factories can resume work after the statutory holiday. If work resumes on the 16th day of the first month, factory owners will be very grateful. One month after New Year’s Day, factories can resume normal production capacity. Therefore, the time span of the Spring Festival holiday is at least one month and, at the longest, two months.

3. What Is the Impact of the Spring Festival on the International Freight Industry?

Based on the above information, we can clearly know that the Spring Festival holiday will cause a production idle period of at least 30 days. As a result, the number of goods produced before the festival will increase sharply for several reasons.

  1. The buyer knows very clearly that if the order can’t be delivered before the holiday, it will take more than 30 days.
  2. Many orders can usually be postponed for a month, but because of the Spring Festival holiday, customers often require delivery before the holiday.
  3. It is customary for many factories to raise prices after the holiday, which will also prompt many orders to be placed in advance.

The increase in orders will lead to a rapid increase in the volume of Chinese exports before the festival. The international freight industry will confront the following conditions.

1. Carriers by sea or air will increase freight rates according to market conditions.

The pre-festival period is the traditional peak season for Chinese exports. If the carrier cannot have a lot of business at this time, the operating situation in the new year will be less positive.

2. The tight availability of containers will affect the work of freight forwarders.

The large increase in cargo volume will make container availability very tight. The shipper will put a lot of pressure on the freight forwarder to coordinate for proper reservations. Failing to meet customer needs would make forwarders face the risk of losing customers.

3. The door-to-door truck transportation business will be affected.

Ocean Freight PortContainer truck drivers are also looking forward to the coming holiday. The large amount of goods shipped before the Spring Festival will put truck drivers in long-term excessive fatigue. They work overtime every day, unable to get enough rest. Once the holiday is approaching, they become more anxious and want to end work as soon as possible and go home early. So as the Spring Festival comes, fewer drivers will be available. Customers will find that even if they manage to book a container, more concern will be there to hire a driver.

4. What Shippers Should Expect Their Freight Forwarders to Deal With as the Spring Festival Holiday Approaches

Here’s what shippers should expect from their freight forwarders leading up to the Chinese New Year. In the face of the huge cargo amount before the Spring Festival, freight forwarders must maintain a good mentality and arrange shipments extremely well. The following work is required to be handled by forwarders with much caution.

  1. Pay adequate attention to the impact of the festival to the operation. Remind customers to prepare cargo as early as possible.
  2. Maintain good communication with upstream suppliers, especially the truck companies. Cooperate with the truck company to arrange pickup at door.
  3. Book containers in advance. Different from the usual operation of 7 days in advance, the reservation shall start 10 days or even 14 days ahead of time before the Spring Festival.
  4. Handle customers’ orders properly, improving the level of operation and accuracy to prevent mistakes incurred by increased workload.

For freight forwarders’ long-term, loyal customers, extra attention should be paid to ensure a zero mistake operation. Such shippers should expect to be their forwarders’ top priority. Forwarders should do analysis before accepting new customers during this time. All in all, the limited resources available in the Chinese New Year season should be applied to serve those customers who contribute most to a freight forwarder’s business development.

The purpose of this article is to let more foreign customers and foreign partners understand some of the characteristics of the Chinese Spring Festival in order to make more reasonable arrangements for the goods transportation around the festival. The 2020 Spring Festival is coming soon. Are you ready?

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David Fan

This was a guest post by David Fan.

Author Bio

David Fan is Co-founder of Zhejiang Twingsupply Chain Co., ltd. He has been in the freight forwarding industry since 2001 and has rich experience in container shipping from China to locations worldwide

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