Steer Your China Business Through CNY 2021s Logistics Challenges

The festive atmosphere around the CNY is not to be misjudged. The national “holiday mood” often contradicts the tremendous pressure felt by foreign managers. Put bluntly, from a business standpoint, the CNY poses challenges to almost all companies doing business in China. And this year, these challenges will be compounded and intensified by the presence of Covid-19.

CNY CHALLENGES IN 2021

  Work routine disruptions

Usually, the Chinese New Year is characterized by the world’s largest human migration. A wave that starts way before the holiday and continues in full force throughout the festivities. As a result, the workforce and output of domestic companies shrink dramatically. While employees can sometimes get a 12-day vacation, factories in China will usually be closed for an even longer period (stretching from February 6th-20th).

However, this year, Chinese authorities both on national and provincial levels have issued new regulations, encouraging people to avoid traveling.

  Cancellations & delays

Way before the “real” holiday starts, production and shipping processes are accelerated. Exporters and manufacturers rush to produce and ship as much as they can before employees are off to vacation and factories are closed for the holiday. This causes a bottleneck in ports and customs offices, so delays and cancellations start to take shape.

This year, the pandemic’s implications and preventative measures added have served to complicate companies’ supply chain management.

  Shortage of labor force

In the event that the rate of contagion begins to creep upwards again in China, the Chinese government is primed to issue additional regulations and protective measures to constrain the spread. One such regulation could be locking down high-risk areas and putting thousands of people in lockdown once again.

  Shortage of containers

While the global demand for goods is booming, and manufacturers working tirelessly to keep up, exporters have been left dumbfounded by a severe shortage of containers. Thousands of shipping containers are stuck in overseas ports, unable to return to China due to the suspension of shipping lines.

  Higher costs

The race for completing orders has also resulted in a 10%-50% increase in the prices of raw materials (such as plastic and steel). Also, the imbalance between China’s import vs. export capabilities and the consecutive shipment delays that have occurred outside of China have had the effect of skyrocketing shipping costs from China to international destinations.

QUICK TIPS

 Prepare your China Business 

for CNY

For companies doing business in China, creating a logistical plan and roadmap is crucial. Here are some tips to help you prepare, avoid delays, cancellations and headaches:

From all of us in PTL Group, we wish you 

a happy & prosperous new year!

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