Chinese New Year 2024 - Prepare your business for the impact
Chinese New Year is fast approaching, and it will have a significant impact on the global freight market
The Chinese New Year, also referred to as Lunar New Year or Spring Festival, is one of the most significant annual Chinese celebrations. The upcoming Chinese New Year is the Year of the Dragon, falling on 10th February 2024, and running for 15 days until 26th February.
In connection with the celebration, a seven-day public holiday will be held between 10th February and 17th February. On any given year, the Chinese New Year impacts the capacity to and from China and, the Far East, in general. The usual consequences of this include long transit times, flight cancellations and void sailing programs, all of which have a significant impact on the global freight market for weeks after the Chinese New Year. This year will be even more challenging as the continued crisis in The Red Sea will begin to spill over into operational issues in China in the coming weeks. If you are not already considering this impact in your business planning, now is the time to do so.
This year, several extraordinary factors cause a great deal of uncertainty about what the impact of the upcoming Chinese New Year will be. When vessels depart Europe in the first half of December they are planned to arrive at the beginning of the peak season. This is to ensure that vessels are available to accommodate transportation of peak cargo but also, to transport large quantities of empty containers to feed the mass of export volume for the period.
Unfortunately, carriers were forced to re-route the vessels due to the crisis in the Red Sea. The majority of the vessels impacted were those intended to cover capacity requirements during Chinese New Year. As a consequence, we expect to see an exceptional demand for transportation of goods in a market that is characterised by limited capacity in terms of vessel space, as well as an acute lack of available equipment in the required geographical locations.
The impact to transit times is increasing exponentially for example: Ocean Alliance operates a weekly service between North Europe and China, with a transit time of approximately 38 days from Rotterdam to Shanghai in China. That transit has increased to 53 days. The empty containers due to discharge mid-January will now arrive too late so; we anticipate a late surge of shippers trying to source and stuff containers to meet with already stretched capacity.
We anticipate that the equipment shortage will impact Chinese export volumes in their entirety and, as a result, pressure on rates will be felt across all modes and trade corridors including (but not limited to) US, Australia, South America, and Europe.
As a consequence of the above, the increase in rates for Air and Sea transport is expected to continue and we will likely see the introduction of further Peak Season and Contingency surcharges in the coming weeks.
Plan ahead and consider alternatives
To prepare your business for the upcoming Chinese New Year, we recommend that you consider creating a forecast for a longer period of time. Planning should be considered for pre and post Chinese New Year, as the repercussions of the combined factors are expected to continue into the spring. Should drought continue to impact the canals, the ramifications might be felt the summer months and second half of 2024. For this reason, considering of a deeper inventory than normal could support an easier end user delivery in your supply chain post-Chinese New Year.
Finally, we encourage you to reach out to your local DSV office. We are here to assist you, and through our extensive global network and vast experience in navigating any market situation, our skilled colleagues can help you find alternatives and provide you with the best solutions for your business’ logistics needs.
To learn more
If you are already a customer to DSV and have any questions about your transport solutions or scheduled shipments from China, please reach out to your dedicated contact person at DSV.
If you would like to find out more about how DSV can support your logistics requirements through Chinese New Year and beyond, please use the form below to contact us.
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