International Shipping and Chinese New Year: Considerations for Your Business
Chinese New Year (CNY) is a holiday observed by almost a quarter of the world’s population, but if you are in the other 75%, the festivities might come and go without you ever noticing.
However, if your business is in its first year of importing from China (or exporting to China), the Chinese New Year is going to mean a lot to you, especially when it comes to international shipping.
The bad news, if you haven’t prepared yet for CNY 2019, is that it’s a little too late to do so. The good news is that the information in this article will help you avoid running into future problems with shipping around the Chinese New Year holiday.
Don’t Underestimate the Impact of CNY
It’s important not to think of Chinese New Year as being anything like the holidays with which you are familiar. Christmas for example, can be disruptive to international shipping processes, but CNY is an entirely different beast. Chinese tradition is strong, so much of the nation's business activity halts for the entire holiday period, but that's not all.
Because the main industrial centers in China are on the coast, many workers are migrants, who leave their homes, located throughout the vast country, to spend the year in the coastal cities.
New Year is the one time these workers get to go home, so to accommodate this mass migration, Chinese factories cease production well before the holiday begins. For example, in 2020, factories will close by January 18th, around a week in advance of the start of CNY on January 25th.
Therefore, if you rely on imports from Chinese manufacturers, your last production run before CNY will need to be completed by the end of December at the latest. However, even this may be leaving it late, as explained in the next section of this article.
Customs Clearance, Freight Forwarders, and International Shipping
The business impact of Chinese New Year is not limited to production facilities. Service industries too are affected—and that means Chinese Customs and local logistics providers. Even international freight forwarding companies, if they are based primarily in China, will experience disruption.
For this reason, it makes sense to pull your production forward as far as possible if importing. The same is true for exports, as your Chinese market will be no more active concerning procurement and receiving over the holidays than factories will in meeting overseas customers’ orders.
So let’s now take a closer look at how CNY affects various elements of the Chinese export and import processes
Road Transportation to and from Ports
If you haven’t got your shipment to a port (or from a port to your customer in China) at least two weeks before the Chinese New Year day, there is a real risk that it might not move until after the holiday. While some road transport firms will operate during this time, they will have fewer resources than usual.
Even if you can get your shipment transported in the final run up to the holiday, you should expect the freight rate to be considerably higher than usual. Those truck drivers that continue working do so only because they know they can earn a premium.
Chinese Freight Forwarders
Whatever any Chinese international freight forwarding company may tell you, their services will not operate normally over the New Year period.
Few local forwarders have transportation assets of their own, so they have little control over the physical movement of freight or the prices charged for trucking to and from ports.
Chinese ports are also incredibly congested in the last few weeks before the holiday, so all but the largest, most well-connected freight forwarders can struggle not only with road transportation, but also with getting your cargo through the ports or airports and onto a vessel or aircraft, even with a confirmed booking in place.
Customs Clearance at Chinese Ports and Airports
Of course, before your Chinese exports can exit the country, or your imports are released for onward transportation within China, they must clear customs at the Chinese port or airport.
Although the customs authorities only take two or three day’s break at the peak of the festivities, they will implement a holiday procedure that increases processing times.
A slower customs process adds to the risk that your goods will miss the flight or sailing on which your freight forwarder booked them. If your shipment is rolled, expect it to be some days before your freight forwarder can find available space on another vessel or aircraft.
What Can You Do to Avoid CNY International Shipping Problems?
The truth is, there’s no good way to manage international shipping to or from China in the weeks leading up to CNY, or during the holiday itself. The one positive aspect is the fact that port congestion clears quickly after New Year, because over the two peak holiday weeks, no new cargo will arrive in the docks or airports.
Nevertheless, if you want to ensure that the Chinese New Year holiday does not negatively affect your business, the only guaranteed way is to take the following two critical steps:
- Secure your final inbound or outbound shipment way in advance of the holiday.
- Make your orders large enough to include a buffer quantity sufficient to see you through the industrial logjam, remembering that you may need an extra 30 to 40 days of inventory. While the ports clear quickly after CNY, factories take much longer to ramp up to full capacity.
Choose the Right Shipping Partner to Avoid Frustration
Finally, at this time of year more than any other, it can pay to work only with a large and reputable international freight forwarding company that has access to a broader range of resources and assets than local providers can offer, and can maximize your chances of completing shipments on time.
As part of your preparations for Chinese New Year 2020, consider registering on the Shipa Freight platform. We can simplify the international shipping process for your business, and hence ease your preparations. It’s never too early to begin planning, so why not sign up today?
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