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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