Chinese New Year and its effect on the shipping industry

16th Feb
Chinese New Year

No-one in the shipping trade can afford to neglect the fact that it is Chinese New Year very soon. In 2018, the official New Year celebrations run from February 15 to February 21, so disruption can be expected either side of this period.

China is often known as the ‘world’s workshop’, where many of the goods that are shipped around the world originate from.

The impact of Chinese New Year is also greater than for many Western holidays. Not only is China a major player in the modern world economy, and not only does it have around one sixth of the world’s population, but the New Year holiday there can last a long time. Official Chinese New Year celebrations last for one week (five days in Hong Kong), however many factories and workshops are closed for as long as 15 days around this time, with the shutdown likely to commence prior to the official New Year date, and to continue until several days after the end of official celebrations. Production is likely to cease completely, and it is unlikely that emails sent to the factories will be replied to.

Even when the factories do re-open, many companies report that as many as one third of their staff remain absent. Some employees also never return to their former roles after the New Year break. There is a chronic labour shortage in China, and people know they will easily be able to secure alternative employment. Some people suggest it is often as late as May before the Chinese factory system returns to normal each year.

Companies reliant on Chinese goods may therefore need to amend their shipping schedules. They may need to make more orders prior to the holiday season, and to store items in inventory until the factories are up and running again. Ideally, orders should be submitted as early as possible so that any defects can be rectified before the holiday.

The best advice is for goods to be at port at least 10 days before the start of the official New Year holiday to ensure they are shipped before the break starts.

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