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The celebrations in China around Lunar New Year can throw a wrench into even the most resilient supply chains. Factories shut down, orders increase in anticipation, and transportation companies try to juggle the demand with a reduced workforce.
If you’re relying on goods manufactured in China—or simply shipping through ports in the country—we’ll show you what to expect during the Lunar New Year / Chinese New Year celebrations. We’ll also give you some ideas for mitigating the impact within your operation.
What is The Lunar New Year in China?
Lunar New Year represents the start of a new year in the lunisolar calendar—one that uses both the moon and the sun as reference points.
In Chinese tradition, Lunar New Year falls on the second new moon after the winter solstice. Although the exact year that Lunar New Year was first celebrated wasn’t recorded, current estimates suggest that the practice of celebrating the new year in China goes back about 3,500 years.
What are the different names for the same event?
- Lunar New Year is a celebration common to several different Asian cultures who keep a lunisolar calendar. Each culture has a set of traditions for their celebrations. For example, the Vietnamese call their celebration Tet Nguyen Dan. Its dates often coincide with China’s Lunar New Year, but not always.
- Chinese New Year often refers more specifically to the Chinese cultural practices surrounding Lunar New Year celebrations, including honoring one’s ancestors, spending time with family, giving monetary gifts in red envelopes, and setting off fireworks.
- Spring Festival is what you’ll hear this celebration called in mainland China. The name was officially adopted after 1949.
When Is the Lunar New Year Celebration?
In 2023, New Year’s Day will fall on January 22. The official public holiday begins with New Year’s Eve on January 21 and lasts through January 27.
2023
January 22
Public Holiday: Jan 21-27
2024
February 10
Public Holiday: Feb 9-15
2025
January 29
Public Holiday: Jan 28-Feb 3
However, don’t expect factories to close promptly on January 22, 2023 and re-open on January 28, 2023. Let’s explore why…
What Happens During the Lunar New Year Celebration in China?
Celebrations & Public Holidays
Lunar New Year is the most important event in the Chinese calendar. In the time surrounding the New Year, celebrations in China revolve around:
- Recognizing the beginning of a new year—and the arrival of spring.
- Symbolic acts to scare away Nian, a mythical beast who was said to attack on the eve of the New Year. It’s said that Nian is afraid of noises and the color red—hence the firecrackers and copious amounts of red you’ll see during the festival.
- Honoring one’s ancestors and spending time with family.
That last bullet is especially important where factories and the transportation industry are concerned.
During Lunar New Year, there’s an absolutely incredible human migration as hundreds of millions of Chinese travel to visit family for this significant celebration. (It even has a name: Chunyun, or “spring transportation.”) For comparison, take a look at the number of Americans who travel during the U.S. holiday season. It doesn’t come close to the number of people who travel around China for Lunar New Year.
- China, Lunar New Year – 415 million
- United States, Thanksgiving – 55.3 million
- United States, Holiday Season – 115.6 million ¹
Those 415 million people include Chinese factory workers and supervisors, plus workers across the transportation industry: truck drivers, port workers, dockworkers, ship personnel, etc. This obviously has a huge effect on factory and transportation operations across the country.
Factory Shutdowns
Although the public holiday officially lasts seven days, many factories shut down for two, three, or even four weeks. During these times, production halts and communication with factories will be spotty—if you receive an answer at all.
Additionally, many factory workers choose to switch jobs after the Lunar New Year, which means production may be slow to ramp up. Bonuses are often handed out just prior to the holiday. If a worker is planning to look elsewhere, they’ll often do so just after Lunar New Year. Some factories are left scrambling to replace workers as they resume operations after the holiday.
Because of these factory shutdowns, many businesses pre-order extra inventory to get them through. You can expect the weeks leading up to Lunar New Year to be busy as factories try to accommodate all of the extra orders.
Increase in Shipping Demand & Rates
As orders pile up before (and after!) Lunar New Year in China, shipping demand also rises. Carriers raise rates an average of 15-20% in response to the extra demand. Additionally, although many shipping companies, ports, and airports remain operational during Chinese New Year, they’re often
- Working with a limited roster of personnel
- Looking at a reduced number of sailings and flights
- Mostly focused on critical shipments.
In other words, during Lunar New Year celebrations, expect some blank sailings, higher freight prices, longer transit times, and slower responses to inquiries before and after the holiday.
COVID: The X-Factor
China’s shifting policies to combat the spread of COVID-19 add another element of unpredictability to this busy season. It remains to be seen how the country will react—and what role Chunyun travel season will play—with regard to the spread of the virus. If your business relies exclusively on inventory from China, you may consider diversifying your suppliers to reduce potential impacts. You’ll find more on this topic in the final section of this article.
How Long Do Celebrations Last?
Traditionally, celebrations last for 16 days. They begin on New Year’s Eve (January 21, 2023) and conclude on the 15th day of the new year with the Lantern Festival (February 5, 2023).
However, you can expect effects long before and long after those dates. For many, these Lunar New Year journeys are a once-a-year trip to see family who may live 1,000 miles away—or more. As a result, workers may leave early or stay longer to make the trip worth it. All in all, disruptions of about a month are fairly common.
How to Mitigate the Supply Chain Impact
Now that you’ve gotten a good sense of what to expect in terms of supply and shipping around the Chinese New Year/Lunar New Year celebrations, let’s talk about what you can do to reduce the impact on your business.
Plan & Pre-Order
Unlike many other supply chain hiccups, Lunar New Year is 100% predictable, so you can plan for it. Ideally, you’ll have a good handle on past sales and demand, which means you’ll be able to forecast your inventory needs. Stock up in advance so you have enough inventory to get you through. However, it’s important that you…
Diversify Your Suppliers
The pandemic revealed the dangers of concentrating all of your suppliers in a single area—or a single country. When COVID ravaged a particular area, some businesses were left without inventory for months. If you haven’t already, consider sourcing your inventory from another country, in addition to China. Diversifying your supply chain can help make your business more resilient in the face of disruptions—or COVID flare-ups severe enough to close factories.
Note: Other countries in Asia do take time off to celebrate the new year. The Tet celebration in Vietnam, for example, means some factories close for ~14 days. Hong Kong, Taiwan, Singapore, and other destinations also observe the holiday. However, the celebrations are longest—and have their largest impact—in China.
Don’t Forget Air Freight
If you need to restock items quickly before Chinese New Year, talk to your freight forwarder about air freight options. It won’t be cheap, but it’s faster than ocean freight, and it might be exactly what you need to make it through until your chosen supplier is up and running again.
Need Help Getting Your Inventory Before Lunar New Year?
Talk to our international freight experts! We’d be happy to help you find the best options to get the inventory you need to keep your supply chain running smoothly. Just reach out, and we’ll help you put together a plan that’s right for your business.
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