How to avert the production and shipping delays in CNY? When running a business that relies on goods imported from a foreign land, it is important to keep its traditions and holidays in mind. This rule strongly applies to the Chinese New Year, which is a holiday celebrated across mainland China. People living outside China may not know about the holiday; however, for businesses and importers working with Chinese suppliers and wholesalers, it is a holiday that needs to be marked in red on their calendars!
People importing from China often ask us, “what’s the whole deal about CNY? It’s just a holiday like Christmas, right?” Well, the answer might not be as simple. It is an important Chinese holiday that involves extensive travels and spans over a whole month. This means that you can expect a production halt and delays in shipping and manufacturing for several weeks.
This shutdown can affect a business drastically. Hence, it’s essential to plan ahead and be prepared for it in advance. This year Chinese New Year is on January 25, 2020. So, just when you return from the Christmas and New Year Break, manufacturing companies in China will go into holiday hibernation for as long as two months.
The experts at Minden International have prepared this guide with some handy tips so you can avert delays due to Chinese New Year like a pro! Continue reading and learn how you can welcome the “Year of the Rat” without facing any delays!
Expect Delays during Chinese New Year
The first step to avert delays due to Chinese New Year is to know what to expect.
Since your business depends on production and shipping from China, Chinese New Year will definitely affect you. Chinese New Year is a public holiday that is celebrated across the country, and your workers in China would travel to celebrate CNY with their friends and families. The holiday period would last for at least 2 weeks, and production will be stopped. A lot of workers leave before the holiday starts and may return late.
Also, do not expect to hear from your Chinese suppliers or management staff, either. It is very likely that you won’t be able to reach them or contact them in any way during this period. It’s a total shut down, and you’ll only be able to get in touch with Chinese factories once the holiday is over.
Remember that the situation may not be ideal after the holiday. A possibility to keep in mind is that many workers will decide to stay back in their villages and would not bother returning back to work, which new workers will be hired to replace them as soon as possible. If the new employees are not proficient and lack training, you can also expect degradation in product quality. These new workers will take time to understand the processes and the product requirement.
Shipping delays are also common due to the Chinese New Year. The Chinese market has attracted a number of foreign businesses, all of which will be pushing to get their products shipped before the holiday. As a consequence, shipping overload can occur, and it could further delay your shipment. You can now make your plan while keeping this entire scenario in mind.
Mark Your Calendar and Plan Ahead
To avert CNY delay, you’d better mark the CNY schedule in your calendar. The Chinese New Year will be celebrated on January 25, 2020, and the production will start feeling its effect before this date. So, it’s high time that you start planning. Here are some important dates that should be marked in your calendar this year. Here is a holiday schedule of CNY 2020.
By mid-January, employees will start leaving work and start traveling to their hometown to celebrate the biggest festival in China. There will be no employee left in the factory by January 24, i.e., the Eve of the Chinese New Year. For two weeks, no work will be done, and you’ll have to wait till early February until you’ll hear back from your Chinese supplier. By mid-February, most workers would have joined work, but it will take a week more for everything to get back to normal.
Understand that the festival follows a lunar calendar, and dates for upcoming years will be predicted accordingly. If the products that you are sourcing from China take 15 days or more to get produced, the production should start at least a month before the Chinese New Year. Do not plan any production 10 days before or after CNY.
Plan ahead by rummaging through your past records and revenue details. Increase your inventory ahead of time and manage it efficiently. Early planning is crucial if you wish to avert delays due to Chinese New Year like a pro.
Beware Of the Deadline of Loading Cargo
Whether you are buying from Chinese suppliers or from any of these top 13 China sourcing websites, make sure to check their shipping schedule. Usually, international courier services stop working 2 to 4 days before the holiday period. If the cargo is being shipped by FCL/LCL, it should be shipped 3 to 4 days before CNY to reach you on time.
Make sure to note down the deadlines for the order you have placed with any of these sourcing websites, as well as the deadlines for the loading cargo. Ask the supplier if the products will be shipped before the holiday or not, as some agencies may not ship the products before CNY, even if they are in stock.
We would advise you not to take any chances by loading the container at the last moment. Start a bit early, and make sure your order is loaded ahead of time. Doing so will help you steer clear of a number of unexpected problems, including being stuck for custom inspection in China. Not only will you receive a delayed order, but you will also be paying the demurrage charges.
Most importers are rushing to get their goods shipped a week before the Chinese New Year, and the shipping fee increases as well. If the cargo is not shipped before the deadline, it will be shipped one week after CNY. The following week is hectic, as all the detained cargoes are shipped out ASAP. Shipping charges would then drop down to the lowest until April.
Will Your Business Be Affected By CNY?
Here’s some good news: Not all businesses will be affected by the Chinese New Year. The size of your business is a determining factor. If you are importing products from China in small quantities and the production takes not more than a week, you can take a sigh of relief.
Chinese New Year won’t affect small quantity importers, and if you are one, you should simply ask your suppliers for their holiday schedule a couple of weeks before. Small factories are not responsible for bulk orders and will shut down after the big factories. This means a trading company or small quantity dealer would continue to work and close just a couple of days prior to the actual holiday.
While small businesses won’t face production delays, they might face a problem in the form of products running out of stock. There’s no way these products will be available before CNY.
Think Before Placing Orders
Chinese suppliers sometimes ask their clients to place orders in advance just to be safe. This means that you’ll be ordering the products before CNY, and the production will start when the workers return. The supplier will offer you the same price and complete your order first thing after returning. Placing an order in advance to avoid the price increase after Chinese New Year might sound like a great way of saving money, but is it?
If the supplier is working with you for a long time, this is a great suggestion, and you should go for it. However, a smart sourcing agent would advise you against it if you don’t know the supplier well. Here’s why: If you are placing the order before the holidays, you’ll be asked to pay a deposit in advance, and the deal will be sealed. There is a chance that there will be suppliers who would not increase the rates after the holidays. So, you should reconsider and not make any hasty decisions.
Plan What to Do During the Holidays
Just because production is halted in China doesn’t mean you have to sit idle. Even if you ignore the days before and after the Chinese New Year, you have exactly two weeks in which you will not hear from your Chinese supplier. Since there’s nothing you can do about this situation, you can focus on your business in your own country.
Prepare a plan for these two weeks. Use these 15 days to align your objectives and plan everything that you need to do after the holiday period. You can also keep some work, especially for this period, and make the most of this opportunity.
As we have already shared, the CNY’s statutory holidays would last longer than the officially announced days. Shipping companies would take 2 to 4 days before becoming fully functional, and the factories would not be back to normal until 5 to 10 days after the holiday. Keep in mind that the workers have traveled to their hometowns, and it will take time for them to travel back.
You will get a clear picture after the factory reopens, and 10 days have passed. Also, take into account the rehiring that will take place in this duration.
Be Prepared For the Price Change
One important change that you should be prepared for is the change in price. The price of the product may increase after the holiday, and it should not take you by surprise. Certain associated costs, like those related to production, labor, and raw material, increase, which, in turn, causes the product’s price to increase.
But why? The Chinese New Year holds a unique significance for the Chinese people. The New Year is considered a new beginning; hence, the new price! This new price is not necessarily higher than the previous rate. Some suppliers would offer you a lower price after the holidays. So, when they return from the holidays, do not forget to ask about it!
We hope these tips will help you avert delays due to Chinese New Year like a pro! But if you are looking for some additional help, our team is ready to assist! We offer our expertise to businesses of all sizes and help them in importing products from China. Get in touch with our sourcing agents and let us provide you the one-stop export solution!