While the new year festivities have come and gone, for some, they haven’t even started. Lunar New Year is a widely celebrated holiday in many countries that follow the lunar calendar holidays. Many places celebrate the Lunar New Year, including Malaysia, Singapore, and China. The Chinese Lunar New Year is one of the most well-known lunar new years in the US, though that doesn’t mean it’s always on everyone’s minds.
With China being a pivotal exporter, a major holiday like the lunar new year can cause significant disruptions to your supply chain. That’s why we’re here to talk about what happens, what consequences you should expect, and what you can do to curb any negative effects. This way, we can stay alert and ready for whatever the new lunar year brings!
What Happens During Lunar New Year?
Since the new year is based on the Chinese lunisolar calendar, the date varies, falling between January 21st and February 20th each year. The Chinese New Year is considered one of the most important holidays to celebrate, so much so that it’s a week-long nationwide holiday in China. The entire country is off for the holiday, with only essential workers working at limited capacity.
With no one around to keep the supply chain going, many who rely on China for their goods face a massive halt. Many consequences follow from these circumstances, one of which is rising rates. Rates will rise early, even before the new year, as carriers must keep up with demand during the December holiday season.
Price increases will continue to rise until after the Chinese Lunar New Year, as many manufacturers and carriers rush to complete as many orders and shipments as possible. While China officially gives the nation a week off, many people typically take longer vacations. Usually, people are out for two weeks, sometimes even up to a month! With manufacturers, it’s usually safe to plan for a two- to three-week closure.
Many other countries in Asia, like Vietnam and South Korea, will also be closed during the Lunar New Year, though each country has its own rules about which days are off and who is allowed to take time off. With so many people taking off to see family, it takes time for supply chains to return to normal, usually around March.
Another consequence of the holiday will be blank sailings. With everything shut down in many parts of South Asia, carriers will decide to cancel voyages so that they don’t sail and lose fuel. They instead wait it out until they have enough capacity to make the voyage worthwhile. There will also be lots of congestion before and after the holiday, with many businesses trying to keep their inventory healthy as much as possible.
What You Can Do to Prepare
With all the challenges that arise, it can feel overwhelming to face this time of year. It’s especially understandable when you’re just recovering from the holiday season yourself. But while some aspects can’t be changed, such as pricing or closures, there are still steps you can take to mitigate this stressful time in the supply chain.
First is always communication. Frequent communication helps ensure that you know what’s happening between you and your manufacturer. Ask important questions, such as how long you will be closed for or when the last day for orders ship out, so you can better understand how the plant is doing.
Another tactic is shipping as early as possible to better avoid delays and fees. It’s typically cheaper to ship earlier, as there is less stress or rushing at these times. Usually, you would want to ship a few weeks before the start of the Lunar New Year, so make sure you are aware of your manufacturer’s close dates.
Keeping a well-stocked inventory is better than waiting until the last minute, when unexpected demand can occur. This way, having a built-up inventory can help keep your business more stable during the holiday season and reduce the risk of being sold out.
You will also want to consider other manufacturer options available to your business over the long term. Diversifying your supply chain can further mitigate these issues, allowing you to pivot to other suppliers and be safer when securing the inventory you need. Look into different manufacturers and consider which fit your business model, especially during the holiday season.
After going through a busy holiday not too long ago, it can be tiring to handle another major disruption to the supply chain. However, taking all of these variables into account and keeping these tips in mind, you will be more prepared to face and handle the holiday ahead. With a better handle on the disruption, Lunar New Year will feel like less of a surprise and more joyous, especially for those who celebrate!
