CHINESE NEW YEAR 2021: LOGISTICS CHECKLIST FOR YEAR OF THE OX
INTRODUCTION:
When speaking about global
production and transport volumes, specific events tend to cause an upsurge in
demand and create a peak season for delivery and operations. As a result, for
the duration of the lunar New Year, a holiday celebrated by thousands and
thousands of people particularly in China and Southeast Asia, mainly in
Thailand, Malaysia, Singapore, and Indonesia, worldwide demand surges.
For logistics businesses
and individuals that depend upon them, the lunar New Year can mean tremendous
delays to shipments that could negatively affect the supply chain.
HOW DOES IT AFFECT BUSINESSES?
DELAYS IN TRANSPORT AND RISING FREIGHT COSTS
Chinese New Year starts on
February 12, 2021, and ends on February 26, 2021. This holiday period leads to
an abrupt shutdown of all production for almost a month: Production is halted
one or two weeks before and after the Chinese New Year’s Eve. Closed factories
along with the unavailability of staff to work on orders can have a huge impact
on production, causing these delays to continue for some time even after the
festivities as the re-opening of factories is a gradual process, not only in
China but many surrounding Southeast Asian countries as well.
REDUCED PRODUCT QUALITY
Even though when factories
reopen after the Chinese holiday, workers take time to return to work or never
return at all, because of a shortage in the number of skilled workers there
lies a significant chance of manufacturing lower quality on production lines.
The manufacturers are more likely to ship the inferior products along with the
rest of your order and ultimately, you may end up paying for a run of lower
quality products without much recourse.
RECOMMENDATIONS
PLANNING AHEAD
MGH Logistics recommends
you ask your suppliers when their offices and factories will be closed
throughout the holiday and consider other manufacturing locations. Many other
countries in Asia do take time off for the New Year yet there are still some
manufacturers who continue operations in several countries. Hence, if your
inventory needs to be shipped and delivered on time during the Chinese New Year
shutdown, check with your supplier to enable you to have some of your
production moved to another location. Besides potentially saving you during the
Chinese New Year, this is also a wise business choice; best not to keep all
your eggs (or your entire supply chain) in one basket.
CHOOSE A MULTIMODAL SERVICE TO AVOID HIGHER RATES
Ask your freight forwarder
for the option of using a multi-modal transport service that combines different
modes of transportation such as the sea, air, road, and rail. This enables the
business to still attain some benefit with slightly longer transit times as
compared to the regular services with faster transit times that tend to get
overbooked.
NEVER PAY A DEPOSIT JUST BEFORE THE SPRING FESTIVAL
In China, the most common
time for manufacturers to wrap things up and close forever is Chinese New Year,
hence we would suggest not paying a deposit just before the holiday, as your
factory may intend to close permanently and not inform you.
CONNECT WITH YOUR SUPPLIERS
The entire transportation the framework includes shipping, trucking, and warehousing, so a break in any section of the supply chain does not impact your output. One recommendation is to build strong relationships with expertise freight companies to receive priority treatment during a huge backlog and enjoy added leverage by better meeting the needs of your customers.
NEED HELP IN SOLVING ANY LOGISTICS ISSUE?
You could always contact
us to help solve all your logistics needs:
Contact@mghgroup.com
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