How Chinese New Year Disrupts the UK Supply Chain

Strikes and bad weather meant that the festive period of 2022 was flooded with disruptions that caused a backlog of issues for many UK businesses. However Chinese New Year is proving to be the most troublesome time for many of these businesses, especially those who fail to recognise the significance of the holiday.

Lunar New Year as it is also known, falls on January 22nd in 2023 and celebrations last two weeks until they end on February 5^th. The festivities are mainly centered around family, as people usually return home to see loved ones and sit down for meals with all their relatives. The theme of the festival is new beginnings as it marks the start of the spring season and the Year of the Rabbit on the Chinese Zodiac Calendar.

As bright and beautiful as the festival looks each year it’s knock on effects to the supply chain across the globe is not to be underestimated as it triggers one of the largest annual travel waves in the world. The carnage that is created by the festival starts around 2/3 weeks before as factories work flat out to complete orders before they close, and workers begin their travels early to be with family come the week of celebration. This means suppliers compete as prices for spaces on ships increase in the weeks leading up to the new year, failing to secure these spaces can lead to huge setbacks throughout the supply chain. While manufacturers will have no time or capacity to provide quotations or take on new orders in the weeks running up to Chinese New Year.

The hangover that follows the public holiday can last up 6 weeks as factories in China work to get back to their usual level of production after the two-week closures that occur throughout the festival. The reason for this is the workforce return to their factories slowly, while some of the workers never return to the job at all. Many people taking the idea to see the new year celebrations as a new beginning quite literally and find new roles or even changing career paths. 

These delays impact the world’s supply chain and our clients in the UK feel it as much as anyone. Our industrial and supply chain divisions also report that the quality of products can also reduce due to the factories putting pressure on their staff to get orders ready before they close, which of course has a negative impact. Many shippers in the UK will stock up their inventories before the festival starts to prepare for the 5/6 weeks of delays that transpire. However, some suppliers have resorted to finding alternative sources of transportation services for urgent shipments like air freight. Some of our clients have even started to employ staff at this time of the year to deal with the backlog that comes from the celebrations. 

The impact of the Chinese New Year on the whole world cannot be underestimated. Here at Streamline our Driving, Industrial and Supply Chain divisions are now fully prepared for the 8 weeks of disruption to container volumes dropping coming into ports and requirements to be low on the shipping clients but supplying diverse industries balances out the work force. The stress that is placed on our clients operations increase exponentially during this time, from increase of prices to a drop off in product quality. With more and more of the world’s production being centered in China, it feels like this isn’t just a trend but is becoming the norm and now becoming a key period in the logistics calendar.