Western countries mark the start of the year on January 1st, and few businesses are surprised when shipping is slow around this holiday. However, small businesses that rely on Chinese suppliers often discover that shipping delays are more common towards the end of the month rather than the beginning. If this is unexpected, it can disrupt business operations significantly, leading to the expenses associated with late order fulfillment and unhappy clients.
China celebrates the Lunar New Year (also known as the Spring Festival) each year, and most companies shut down for a week during the holiday. Manufacturing companies in particular are often located on the country’s east coast, and they are staffed by migrant workers from the middle and western regions. These employees go home during the Chinese New Year holiday, which results in a lengthy period during which no work can be done.
The date of the Chinese New Year changes from year to year based on the lunar calendar, which means small business owners must plan ahead to ensure continued operations during this period. The deadlines to place orders before the holiday blackout must be adjusted annually. In 2017, China will officially usher in the Year of the Rooster from January 27 to February 2, but many people celebrate for a full 10 days. Typically, suppliers will not produce samples or accept new orders less than two weeks before the Chinese New Year.
Chinese New Year Shipping Challenges
Because there is little or no manufacturing taking place nationwide, orders placed just before or during this period will either be fulfilled after the festival, or they will suffer from significant quality issues. With workers anxious to wrap up outstanding orders so they can begin their journey home, it is common for product errors and defects to slide by when they would otherwise be caught and corrected.
Proactive supply chain managers include Chinese New Year shipping delays in their long-term vendor management planning, and they assume that they will have little or no contact with any Chinese partners during the Chinese New Year. After everyone has returned to work, the orders will be piled up. In some cases, manufacturers have fewer workers to complete the increased workload, as it is common for people to use the time off during the Chinese New Year to find a better position. Suppliers simply can’t be sure how many employees will return after the holiday. As a result, it could be several weeks before shipping schedules get back to normal.
Planning Ahead for Chinese New Year Shipping Needs
The best strategy is to discuss business needs with suppliers well in advance of the holiday period to fully understand individual production schedules. If orders are typically quite large, it is wise to plan orders for 30 to 45 days before the Chinese New Year. Smaller orders don’t require the same lead time. Plan to get these orders in approximately one month before the Chinese New Year.
Generally speaking, businesses that have their product in transit three weeks before the Chinese New Year can feel fairly confident that all necessary items will be received as expected. Bear in mind that manufacturers are shipping massive orders before the holiday, and shipping companies regularly overbook their vessels. Adding an extra week to the standard two-week shipping time allows for any delays. If necessary, consider paying the extra cost to ship a partial container if it is not possible to get a full container in time. Better to incur the extra shipping cost than to do without product critical to the business.
Emergency Shipments During Chinese New Year
Unfortunately, even the most experienced businesses can’t always calculate their needs many weeks in advance, and there are circumstances when a critical shipment is needed during the Chinese New Year. While most of the ports are open, transportation companies are operating at full capacity. It may be possible to book space to move product that has already been produced, but the cost is likely to be prohibitive. If you need money to grow or maintain your business, you should consider a business loan during this time.
Most Chinese companies set expectations clearly: They are simply not available during this holiday period. The best alternative is to seek an interim supply of the necessary item from another source. Under these circumstances, domestic manufacturers are often able to fill the gap temporarily. This solution can be expensive, so the primary goal should be to plan for supply needs during the Chinese New Year well in advance of the holiday.
The Chinese New Year marks a fresh start nationwide, and workers return to their jobs with renewed energy after the long break. Any significant pricing or process changes are likely to be made just after the holiday, so small businesses should confirm contract details before committing to new orders. This prevents unwelcome surprises on invoices.
Finally, when speaking to partners in China before or just after the holiday, take the opportunity to wish them well in the new year. Appropriate sentiments for business relationships include “I wish you success in the new year” and “I wish you happiness and prosperity in the new year.”
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