Chinese New Year, also known as Lunar New Year, is the biggest holiday in China. This year, the holiday runs from January 21, 2023, until February 5, 2023. Before and during the holiday, manufacturing and export operations across most of the country will come to a halt as factories shut down. It is important, then, that your business is prepared for this disruption to the supply chain.

The Impact of Chinese New Year on Supply Chains

Like Christmas in many parts of the world, Chinese New Year is the family event of the year. Mainland China as well as Indonesia, Malaysia, North and South Korea, Singapore, and Vietnam all celebrate the Chinese New Year holiday. As people travel to their families, it has a big impact on the logistics infrastructure.

However, understanding the timeline of the Chinese New Year shutdowns can help your business best prepare for disruptions.

These are the big dates to keep in mind:

– New Year’s Eve: January 21, 2023

– New Year’s Day: January 22, 2023

– The Lantern Festival: February 5, 2023

Factories often close two to four weeks before the start of the holiday to allow workers to return to their hometowns to spend time with families. Manufacturers will have less capacity to take new orders in the weeks leading up to the holiday. Goods will not be delivered from factories to port during this time so placing orders in advance is the best idea.

While ports are open during Chinese New Year, they do not operate at full capacity. As a result, ocean capacity is tight, and containers may fill faster than usual. If you have orders that need to be filled, they need to be placed before shutdown occurs to avoid late deliveries.

How to Prepare for Chinese New Year 2023 Closures

Planning for the Chinese New Year will ensure that you have the right raw materials and products. The following tips will help your business get ready for the upcoming holiday.

Plan Ahead: Even though the Chinese New Year officially takes place for about two weeks, plan ahead for the time before and after. Planning demand ahead of time will make sure your company has enough stock. Orders should be placed well in advance of the holiday, with ocean freight booked at least 3-4 weeks before the Chinese New Year.

Optimize Inventory: If you can build your inventories in other locations around the world, you will not be left without stock during the holiday period. Inventory optimization can map projected demand with supply to mitigate delays and shortages. This is particularly important if you stock seasonal goods.

Monitor Quality Control: The Chinese New Year is the most optimal time to switch jobs in China, which can cause some complications. Not all workers return to their jobs at the same time and many workers do not return to their jobs after the holiday period. Factories must replace the workers that do not return quickly which means that untrained staff will be working the production lines until they get up to speed. This is a good time to watch quality issues coming from your manufacturer.

Explore Transportation Alternatives: Your usual modes of transportation might not be available but other sources might be. For example, shipping via ocean might have a longer lead time than a sea/air combination. Alternate sourcing strategies that use vendors outside of China during this time might be necessary to meet deadlines.

Manage Production Levels: Manage production levels throughout the holiday period keeping in mind that it takes a while before production is back to normal levels.

Work with a Logistics Partner: Using a trusted logistics partner with resources and knowledge of the market can help your business deal with the issues that come with Chinese New Year. 

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