Tomorrow is the Chinese May Day holiday, from 1 – 5 May, the country shuts down.

China has seven legal holidays in a year, including New Year’s Day, Chinese New Year (Spring Festival), Qingming Festival, May Day, Dragon Boat Festival, Mid-Autumn Day and National Day.

There are 4 less disruptive half day holidays, to celebrate Women’s Day, Youth Day, Children’s Day and Army Day.

But these holidays have a huge impact on production and transport from China. So if you trade with China, you have to consider planning around them.

The remaining dates for this year are  –

• May Day – May 1 – 5
• Dragon Boat Festival – June 25 – 27
• Mid-Autumn Day – starts on October 1 and goes into the week long
• National Day holiday from October 1- 8

 

Impact of Chinese holidays on transport from China

China is considered the “factory of the world”, and when it closes, this dramatically affects importers from around the world. Something we are all painfully aware of at the moment.

It is possible to prepare for it in advance, to avoid getting caught out by delays or increased rates. Note that each year the dates for the holidays in China change because they are dictated by the lunar calendar.

So the next big shut down will be for the National Holiday, on 1^st October, known as Golden Week this holiday lasts from October 1 to October 8, and during this time the factories are closed, and the number of transports is halved.

As in the case of the Chinese New Year, around the time of National Day, freight prices increase significantly. Large quantities of cargo accumulate in the ports, as importers are preparing for the upcoming holidays.

Before the holiday break, the sea terminals get overloaded, with everyone trying to load their goods hence the freight prices increase significantly.

When planning your shipment take into account the longer transport time due to these port delays and be aware that only those who can pay the highest prices will receive their goods on time. In some cases loads will not leave the port at all and have to wait until the end of the holiday season.

2021 Planning and Preparation

But looking ahead it is the Chinese New Year that has the most impact, creating a tense time when importers are placing larger orders to survive the long break, and the Chinese are in a hurry to send goods. This pressure can affect production with factories placing more importance on fulfilling large numbers of orders, rather than looking at technical specifications and quality control.

So preparation is vital to ensure the quality and delivery of your goods, they must be in the port at least ten days before the holiday, and the cargo should be booked a minimum of two weeks in advance.

It may seem early, particularly this year which hasn’t been able to get going, but now is a good time to start thinking about your Christmas supply chain if your goods are manufactured in China. Speak to one of our team for guidance, put in the key dates and plan around to achieve the best rates and avoid costly delays.

Sea Freight Update

Currently we are seeing a slight increase on sea freight rates from 1st May, as well as a number of blank sailings and merging services from mainland China ports to Europe.

Generally March vessels departed on schedule due to the backlog from China New Year and their shut down. However with the demand collapse and lockdown restrictions in place due to Covid-19 April and May will see significant drop in numbers even with the introduction of these blank sailings.

As the pandemic has progressed, blanked sailings have increased at different rates on different routes and have had a wider impact than just the main east-west trades. Recorded blanked sailings as a result of the coronavirus pandemic now stand at 456, of which 342 were on the main deep sea trade lanes.

But by viewing a rolling three-week average of announced blanked sailings, Sea-Intelligence noted that week 17 appeared to be the “peak impact” for the Asia-northern Europe and northern Europe-US east coast trades.

Other trades are expected to reach peak capacity removal in weeks 19 and 20.

Analysts at Platts also suggested that some container demand could start to re-emerge now that pandemic containment measures were starting to be eased.

“With some lockdown restrictions starting to lift, especially across much of Europe, there is hope in the market that there could be a boost in container freight demand, but this is likely to be a short-term rather than a more comprehensive outlook, as many importers and retail outlets are wary of a potential second-string of lockdown measures should coronavirus case numbers start to see more increases,” Platts said.

We are working with our global agents and all major shipping lines, keeping a close eye and continuing to shop goods for our clients.

Please contact one of the team on +44 (0)1622 237979 email sales@tps-global.com if you would like to discuss your shipping requirements.