As most of North America is getting into the swing of a new year, the Chinese will soon be celebrating the beginning of a new lunar calendar. The "Year of the Dog," which begins on February 16, 2018, will bring about a standstill in manufacturing and freight movement in and out of the world's primary production center.
While the observance of the Chinese New Year (CNY) will last one week, the impact on international supply chains could cause disruptions from early February to early March.
For many seasoned supply chain professionals, planning ahead for CNY is a common practice that begins months in advance. However, there are many businesses that are just beginning to get their feet wet when it comes to understanding the intricacies of managing an international supply chain.
Let's take a look at a few important supply chain practices that you should keep in mind when preparing for CNY:
(1) Know Your Supplier's Production Schedule: Obtain an annual production schedule from your Chinese manufacturer. Operation down times will vary from supplier to supplier, ranging from one week to upwards of a month.
(2) Account For Delays: During the weeks leading up to and after the official celebration of CNY, business may experience delays in production. This occurs because many Chinese factories will be understaffed as workers travel long distances (often to other countries) to be with their families. Additionally, Chinese manufacturers often see a jump in production orders ahead of CNY as more cutomers plan ahead.
(3) Book Ocean Cargo Space In Advance: Even in the age of mega-vessels, the thirst for ocean cargo capacity cannot be quenched leading up to and during CNY. If you are importing from China, make sure to book space on a ship months in advance.
Failure to align your overseas production and shipping needs can quickly escalate into an emergency supply chain situation during CNY. For instance, failing to secure container space on a vessel for products that have been manufactured may result in the need to quickly find warehousing space in China until after CNY.
#ProShipperTip: While booking a full container load (FCL) will require advanced planning, importers that need less than container load (LCL) capacity may be able to find available space closer to the beginning of CNY. Averitt, for example, offers several LCL solutions from China and Asia in the weeks leading up to CNY.
In the end, the number one key to overcoming supply chain challenges, including CNY, is to plan ahead and work closely with your service providers. Identify state-side logistics and supply chain service providers that will be proactive with you. Your partnerships should help you to focus on growing your business rather than chasing after it.