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Like many celebrations that were either postponed or curtailed last year due to the global pandemic, the joyous celebration of the Lunar New Year in 2021 will likely take a different approach as countries worldwide continue to grapple with the negative impacts of COVID-19.
Also called Lunar New Year, the annual festival in China and Chinese communities around the world begins with the new moon that occurs sometime between January 21 and February 20 according to Western calendars. Festivities last until the following full moon.
How Long Will it Last?
With an official date of February 12, 2021, Lunar New Year will last about 7 days. Under normal circumstances, the festivities impact supply chains for weeks or even months, with the country celebrating the Year of the Ox in 2021. Factories are shuttered as workers return home for the annual celebration, whose lasting impacts often include shipment delays, quality issues, and even lost packages.
“This holiday period is generally considered a time of fun and celebration for the people of China. However, for manufacturers who rely on China’s manufacturing supply chain, it often serves as a time of stress and frustration,” Triad Magnetics points out, noting that most of the country is shut down for the entire event.
“Additionally, many Chinese workers take the holiday as an opportunity to explore new job options,” it adds. “As a result, Chinese manufacturing facilities are left with unfulfilled production jobs and unfilled job positions, both of which lend to longer lead times for manufactured parts and products.”
Tackling the Logistics
Logistically speaking, Lunar New Year can create major headaches for importers and exporters who often spend months in advance preparing for the potential impacts. Even when the holiday is over, it may still take Chinese factories one to two months to return to normal operations. This is due to an increasing trend of employees unexpectedly not returning to work, Triad explains.
“Following the Chinese New Year holiday, workers explore alternative job options, making this period traditionally the peak season for job-hopping in China,” it says. “Historically, more than 25% of manufacturing employees do not return to work after the Chinese New Year. The vacant positions result in slower post-holiday production operations.”
Strong Partnerships and Good Communications
While it may be too early to predict exactly how the 2021 Lunar New Year will play out for the world’s importers and exporters, there are some steps that all companies can be taking now to shield themselves from the impacts.
Along with working to keep their own workplaces safe and their employees healthy, companies can take this time to plan out their logistics and transportation needs for the next few months. By sharing these insights with their logistics partners now, shippers can secure freight capacity in advance while also working around the lengthy holiday period.
Now is also a good time to reconfirm your suppliers’ schedules (particularly for those shipments coming from China), place orders in advance, and reassess forecasts for the next few months. Expect the unexpected, anticipate longer shipping periods, and be ready to fork over a little more money to cover the cost of shipping.
“Open up the lines of communication with all of your business partners and make sure everyone is on the same page and aware of the potential disruptions that could occur,” says Peter Nordstrom, Executive Vice President Head of Ocean Services – Americas Region, DB Schenker. “Build relationships with partners like DB Schenker, which will help you lay out contingency plans before the event occurs and then recover quickly once the holiday is over.”