Preparing for Chinese New Year is more important this year than any year before…

As we head towards the end of 2021, we encourage you to pre-plan for the Chinese New Year that falls on 1 February 2022.

Celebrations traditionally last for 16 days, starting from Chinese New Year’s Eve on 31 January 2022 and culmination with the Lantern Festival on 15 February. As a result, factories will be closed, and we anticipate the pre-holiday rush will put transport and supply chain operations under extra pressure.

There is uncertainty about the impact of the upcoming Chinese New Year on current demand and capacity while markets continue to deal with Covid-19 restrictions and global port congestion, this compounded by an Electricity Rationing Policy that was recently introduced in many parts of China to reduce carbon emissions that has caused production disruptions with factories cutting or even halting output operation.

The 2022 Winter Olympics is also a factor, they are scheduled to take place from 4 to 20 February 2022 in Beijing. Although no official Control Policy has been published, and there is uncertainty what implications the event will have, we do expect security inspection levels and road control will be increased in certain areas further hampering the flow of logistics.

Considering all the above factors, it is important to work closely with your suppliers and plan for the period before and after Chinese New Year celebrations.  We encourage you to consider a deeper inventory than normal to support an easier end user delivery within your supply chain and prepare longer-term forecasts.