Chinese New Year, also known as the Spring Festival or Lunar New Year, is one of the most important holidays in Asia and has a significant impact on global supply chains.
Although the official celebration lasts for a week, festivities often extend for several more weeks as people spend time on family reunions and preparations. This period also involves the closure of most factories and businesses, creating substantial logistical challenges worldwide.
Here’s everything you need to know about Chinese New Year 2025 and how to keep your supply chain operational during this time.
Key dates for Chinese New Year 2025
Chinese New Year 2025 begins on January 28 and lasts until February 4, marking the start of the Year of the Snake. However, its logistical effects start weeks in advance. Many businesses scale down production up to three weeks before the holiday, and normal operations may not fully resume until the second or third week of February, following the Lantern Festival (February 12).
Key factors of Chinese New Year
1. Celebration and significance
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- Chinese New Year is a time for family reunions. During the holiday, people visit their loved ones, launch fireworks, and participate in traditional events.
- This holiday impacts not only China but also other Asian countries such as Hong Kong, Macau, Taiwan, Singapore, and South Korea, though the official public holidays (non-working days) may vary.
2. Impact on Logistics
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- Factory closures: Production halts weeks before the official start of Chinese New Year, resulting in product shortages.
- Shipping congestion: The high demand before factory closures leads to port congestion, increased transportation costs, limited warehouse capacity, and potential shipping delays.
- Global supply chain effects: As China is a major production and export hub, disruptions have international repercussions.
- Prolonged impact: Labor shortages and reduced production capacity can persist for weeks after the holiday, causing delays in global logistics operations.
3. Key Industries Affected
The following sectors often experience significant disruptions due to extended closures and production delays:
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- Apparel and Textiles: Manufacturing of garments and accessories.
- Toys: Production and shipment of toys.
- Automotive: Vehicle assembly and parts manufacturing.
- Electronics: Production of components and finished goods.
Best practices and tips to mitigate the impact of Chinese New Year
1. Advance inventory management
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- Ensure you have sufficient inventory before the holiday. Review current stock levels and place additional orders if necessary.
2. Strategic shipment planning
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- Coordinate shipments in advance to avoid delays and consider using multiple modes of transport as a backup.
- Reserving space early can also help mitigate the cost increases common during this season.
3. Clear communication with logistics partners
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- Maintain constant and transparent communication with your suppliers and logistics partners to align expectations on timelines, costs, and services.
- A strong relationship with reliable partners can make a significant difference during periods of high demand, ensuring quick solutions to potential problems.
4. Flexibility in planning
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- Anticipate possible setbacks and adjust your strategies as needed.
- Diversifying routes and modes of transport, such as using less congested ports or intermodal methods, can help avoid bottlenecks.
5. Insurance Coverage
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- Ensure your shipments are covered against potential delays, losses, or damages during this period.
6. Historical data analysis
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- Reviewing patterns from previous years will help you make better projections for your inventory and transportation needs.
7. Emergency Budgeting
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- Keep a contingency fund to cover unexpected costs, such as additional fees for port congestion or cargo loss.
Chinese New Year can present challenges for global logistics, but proper preparation can help you minimize its impact. Consider and implement our recommended key actions to navigate this period successfully.