Chinese New Year Logistics

2024 is the year of the Dragon. According to the Chinese zodiac, the dragon symbolizes power, luck, and success. 

Retailers who produce in China need a little extra luck on their side this time of year since Chinese New Year(CNY) brings a complete pause in manufacturing to a nation responsible for 28.7% of global manufacturing output.

On the production side of things, that includes numerous headaches for businesses during the week including:

• Factory shutdowns
• Order backups
• Shipping delays
• Worker turnover

It also includes some market opportunities like:

• Big apparel purchases
• Spikes in food and beverage spending

What should you expect this year? As a business headquartered in Hong Kong, we’ve been helping businesses navigate the CNY hustle for a long time. We’ve created a handy guide below on what’s to come during this year’s national holiday.

Read About CBIP's 4PL Adaptable Logistics Solutions

How Chinese New Year Affects Logistics

Like most traditional Chinese holidays, Chinese New Year is based on the traditional lunar calendar. Since most of the world currently runs on the solar-based Gregorian calendar, this means the dates for Chinese New Year will change from year to year. 

This year’s CNY will begin on February 10th.

While officially only a week long, the CNY festivities can continue all the way until the Lantern Festival on February 24th. Workers typically have 2 weeks off, meaning production and shipping will totally shut down from February 10th to February 24th, with slowdowns before and after those dates.

You’ll need to plan accordingly — use this timeline as your guide:

End of January-Feb 1: Make sure to stock up on enough inventory to get you through the next month before the end of January, as this is when factories start shutting down production.

February 2-9: Around a week before the new year, employees begin leaving work. By Chinese New Year’s Eve (February 9th), all employees have left the factory. 

End of February: Most employees have returned, but production still takes time to ramp back up to normal

Early to mid-March: Most production returns to normal

Apart from the downtime period, here are 4 common supplier situations that occur during Chinese New Year.

1. Factory shut-downs

While CNY is technically only a week long, many factories shut down operations for as long as two weeks to allow time for travel. This two-week break — plus the spin-up time required after workers return — results in an extended period of reduced production.

 Make sure you’re stocked up before the season hits!

2. Resupply order backups

Due to the up-to-two weeks of lost productivity, a backlog of orders is certain to develop as businesses request to restock their depleted merchandise. It can take a long time for order volumes to return to normal. Delivery times can also be expected to slow significantly following the holiday.

3. Shipping delays

Regardless of international trade, most Chinese ports close down during the CNY holiday. 

However, China’s ports are some of Asia’s primary shipping hubs. That means logistics in the whole region may face massive delays, price hikes, or both. If you operate a business in Asia, you should proactively check with your logistics provider to see how they plan to mitigate the situation.

4. High worker turnover

For many Chinese people, the new year symbolizes fresh beginnings and a time for change and new opportunities.

 That means — you guessed it — employee turnover. This can lead to staffing shortages during a time of particularly high demand. In a pinch, some businesses may bring in untrained replacement staff to fill vacant positions. 

This can impact product quality and cause further delays.

RELATED: Where to Look For E-Commerce Warehousing in China

What are people buying during CNY?

Chinese New Year traditions often result in an uptick in consumer spending not typically seen during ‘normal’ months.

Major activities for Chinese folks on CNY include:

• Eating large, home-cooked meals with family
• Gifting money in small red envelopes called hongbao
• Visiting the graves of ancestors (usually to burn paper offerings or leave snacks/candy)
• Cleaning their houses in preparation for the new year

New year, new clothes

Especially popular gifts for family members during CNY are New Year Clothes. 

Traditionally, these were a special type of traditional clothing bought as a gift for the New Year. Today, however, most Chinese people have swapped out traditional-style clothes for more trendy outfits. 

This is a huge opportunity for clothing brands — and an important time for them to get the marketing right for their Chinese customers. This year, luxury brands Gucci, Marni, and Valentino have even created their own Year of the Tiger collections to entice their growing Chinese markets to buy for the new year.

Work with a logistics company that understands Chinese logistics (so you don’t have to)

You don’t have to rely solely on the luck of the dragon to guide your business through this CNY.

As logistics specialists with experience navigating the Chinese New Year and its pitfalls, we at CBIP Logistics have exactly what your business needs to start the new year off strong.

At CBIP, we’ve operated in China for nearly a decade and have a network of connections on the ground prepared for anything that comes your way. We’re always looking for innovative businesses like yours that want an insider connection when taking on the Asian market.

As a 4PL firm, we help you create a bespoke logistics service. We can do that because we don’t own our own ships and warehouses. Instead, we connect your business with our network of contacts based on your unique needs.

Want to change how your goods are warehoused or handled down the line? Unlike the big providers, we can work with you to stay at the times and price points you want. 

Interested in shipping adaptably this year? Fill out a form on our website and we’ll give you a call to tell you exactly what we can do for your business.