How a 3PL Can Prepare You for Chinese New Year Shipping

Perhaps the biggest annual challenge comes in the form of Chinese New Year, a huge celebration in which the industry of the whole country practically grinds to a halt for an extended period of time. Many international organisations have been caught out over the years by the disruption, and it can have a serious effect on order fulfilment and profitability.

This guide covers all the key considerations around Chinese New Year shipping and logistics. You’ll learn how Chinese New Year affects shipping, how long you’re likely to be impacted for, and how a 3PL partner can help you plan ahead and avoid disruption to your own business.

What and when is Chinese New Year?

Chinese New Year is the celebration of the start of a new year on the Chinese calendar, which is based around the position of both the Moon and the Sun in the sky, and is normally in late January or February. It dates back more than 4700 years, and as such is a core part of Chinese culture, not only in the People’s Republic of China but also for people with Chinese connections all over the world. Traditional celebrations, family dinners and decorations are central to the festivities, as is house cleaning that ‘sweeps away’ the old year and brings good luck for the new one.

How long is Chinese New Year celebrated for?

While Chinese New Year officially lasts for around a week of public holidays, the celebrations generally go on for much longer than this. Many people will take time off from New Year’s Eve, all the way through to the Lantern Festival on the 15th day of the new year. And as with Christmas shutdowns in the Western world, there will naturally be disruption and changes to normal processes either side of the holiday period, as operations wind down and then start up again.

Why is Chinese New Year so important to business?

As a major annual celebration for many people around the world, Chinese New Year is a significant event for global business – similar to how Christmas is in other parts of the world. Many retailers and brands offer discounts during this period to compete for sales, and demand for gifts and other goods can be particularly high. This has a considerable impact on fulfilment and supply chains for weeks, and even months, leading up to the event.

What is the Chinese New Year effect on shipping?

Many Chinese factories and businesses don’t just close for the duration of the Chinese New Year holiday – they will slow down or close for some time either side of it as well, sometimes for as much as a month. This means that shipping from China during Chinese New Year and the surrounding periods can be significantly disrupted or even impossible. Impacts can include:

Congestion in supply chains

Some businesses are better at planning ahead than others, and so there is always a last-minute rush of firms placing orders with Chinese suppliers and expecting them to be fulfilled before the shutdown. This means that the closer to Chinese New Year an order is placed, the greater the risk of it being refused, or the supplier running out of time to complete it before the holiday period. You may also find that the costs of using Chinese freight forwarders ramp up substantially at this time of year.

Breaks in communication

Factory shutdowns mean that there will be nobody at Chinese suppliers to communicate with. Additionally, they will be extremely busy either side of the shutdown, and may become very difficult to get hold of. If some problems arise on goods that you’ve already ordered, then it could potentially take several weeks to get someone to resolve them for you.

Variation in product quality

The shutdown can lead to many businesses rushing to make and ship out as many items as they can in the weeks before and after Chinese New Year; some even take on temporary staff to deal with the busy period. This can lead to the quality of goods to fall below the standard that would be expected at other times of the year.

Ongoing business impact

If Chinese New Year isn’t properly planned for and mitigated, the consequences for businesses relying on Chinese goods and suppliers can be severe. Order fulfilment can be significantly delayed or even rendered impossible if goods can’t be exported out of China in a timely manner. This can lead to customer dissatisfaction and refund claims that can impact on profitability, and even on cash flow.

How can you prepare for the Chinese New Year period?

As with any area of business, making preparations for the Chinese New Year effect on shipping is absolutely vital in order to reduce any negative impact. We recommend the following so that you can keep your business running smoothly:

Plan as far ahead as you can

Many businesses prepare for CNY shipping several months in advance. Communication is key: not only in understanding how easy it will be to contact suppliers at that time of year, but also to understand when suppliers intend to close and how early you need to get orders in. Ideally, you will already know the levels of stock and goods that you will need over the first quarter of the year; you can then prepare accordingly by making orders earlier than would be the case at other times of the year.

Maximise your supply chain options

Any business that puts all its eggs in one basket is vulnerable if something goes wrong. The 2023 controversy around Etsy was a perfect example of this, where sellers totally reliant on Etsy sales for their income were left unable to pay their bills after their payments were unexpectedly put on reserve.

If you are dependent on one Chinese supplier, or if all your suppliers are Chinese, then keeping your supply chain running smoothly through Chinese New Year can be extremely difficult. Broadening your horizons and having options of alternative suppliers outside China – even if only temporarily – can help you avoid any disruption.

Keep a close eye on your inventory

Connected to the previous two points, inventory management becomes even more important during an unusual period such as this. You may need to buy and store significantly more stock than you would normally do, so that you have enough to sustain normal order volumes during the period affected by the shutdown.

While this may come with additional storage costs as you scale up your warehousing capability, it can still work out cheaper if it means you can avoid the high shipping costs in the run-up to Chinese New Year. Access to flexible storage and warehousing provision is therefore vital.

Check product quality even more closely

As mentioned in the previous section, the quality of goods manufactured in China can often take a dip in the periods either side of the Chinese New Year shutdown. You obviously don’t want to send out substandard goods that customers will be unhappy with, so it’s important to cast a particularly close eye over any goods before you send them out. If you order in your goods well in advance, then you have the time to send back any items that are faulty and organise replacements without getting stuck in the last-minute order logjam.

Look for external help if required

A lot of the admin involved in Chinese New Year logistics can be very complicated. It involves detailed understanding of how Chinese businesses work, clear lines of communication with suppliers, and the ability to adapt and change normal operations to keep supply chains running smoothly all year round. Many businesses find this difficult to manage in-house, especially when they have everything else in their organisations to worry about, which is where the help of an external partner can be so valuable.

Why work with a 3PL provider for CNY shipping?

In order to remove all the stress from organising Chinese New Year shipping, many organisations that import goods from China choose to outsource to a third-party logistics (3PL) provider.

A good 3PL provider will take on all the administration involved in the import and delivery of your Chinese-sourced goods, from arranging the shipping of the goods in a timely manner, through storage in a fulfilment centre, to sending the goods out to customers effectively and efficiently. But a great 3PL provider, on top of all these practical services, will also give you comprehensive support along the way:

Experience and expertise

3PL providers will have years of experience of dealing with shipping, logistics and fulfilment all over the world. As such, they will be well-versed in dealing with how Chinese New Year affects shipping, and what needs to happen to mitigate the potential consequences. Their economies of scale can also help you benefit from better freighting rates, and possibly shorter lead times when procuring goods during busy periods.

Planning and advice

3PL providers should work closely with you to understand the specifics of your business, the types of goods that you import from China and sell, and how deeply you could be impacted by Chinese New Year. Based on this information, they should then be able to help you formulate a plan around advance ordering of stock, alternative supplier choices and inventory management, so that your business continues to run as normally as possible.

Flexibility and scalability

A key part of working with a 3PL provider is being able to access fulfilment centres and storage facilities that are flexible and scalable to your needs, without any major cost implications. You should be able to expand the storage space you pay for, to cover the extra stock you need to buy in to cover the Chinese New Year shutdown, and then contract it again once that stock has been sold. This maximises the cost efficiency of your stock storage and ensures you don’t have to pay for storage space that you only need for a small part of the year.

At ILG, we specialise in helping businesses like yours handle fulfilment needs in peak seasons such as Chinese New Year and Christmas. Find out more on our year-round approach to planning and execution, and how we can help you maximise profitability, customer satisfaction and supply chain performance.

FAQs

What if I don’t have any direct business dealings with China?

China is such a globally influential force in goods and shipping that Chinese New Year has knock-on effects on businesses all over the world. Even if you don’t work with any suppliers or companies in China directly, it is still worth exploring ways to mitigate the impact of Chinese New Year. Seeking the advice of a 3PL partner to understand your position is a good place to start.

Is Chinese New Year always on the same date every year?

No. The first day of the Chinese New Year celebrations is always on the date of the new moon between 21st January and 20th February: for example, 29th January 2025, 17th February 2026 and 6th February 2027. Understanding the variation in these dates is essential for planning ahead each year, especially when Chinese New Year is relatively early and therefore only a few weeks after Christmas and the ‘Western’ New Year.

Is Chinese New Year observed in countries other than China?

Yes. Notably from a logistics perspective, Taiwan also observes extended public holidays for Chinese New Year, and so will also pose some challenges if you deal with Taiwanese suppliers. Chinese New Year is also celebrated in many other southeast Asian countries, such as Malaysia, Singapore and the Philippines, but generally only as public holidays of one or two days.