The Chinese year Huangdi 4716 – the Year of the Pig – Chinese New Year 2019

Chinese New Year 2019.png

Chinese New Year, also known as the Lunar New Year or the Spring Festival, is the most important of the traditional Chinese holidays. This year the first day of the Chinese New Year will be celebrated on Tuesday, February 5, 2019. Interfood is doing business in China for years now, has its own office in Beijing, and knows best what kind of production and transportation problems may occur. With this article we would like to explain what you can do to mitigate this risk and how to best prepare your logistic export process.

When is the Chinese New Year in 2019 and what does it exactly mean?

In 2019, the Chinese New Year will officially start on February 5th and 2019 is the Year of the Pig. The pig is the twelfth animal in the twelve-yearly cycle of the Chinese zodiac according to the Chinese calendar. People who are born in the Year of the Pig would have the following character traits: tolerant and understanding, sensual, peacemaker, enthusiastic, kind, sympathetic and truthful, fond of conviviality and good food, gullible, and naive.

The vast majority of Chinese companies and factories, as well as our office in Beijing, can be completely closed during this period. They do this because they want to give their employees enough time to return to home and family to celebrate this festive period in the company of their relatives, friends and loved ones.

Since many Chinese employees have moved from the countryside to the coastal areas in the past, a huge migration movement is taking place during the period of the Chinese New Year. More than 300 million employees travel from urban areas to their rural home. For the workers who have worked in factories all year round, these are the only weeks with their family. In their 'hometown' they see their friends who have also come from a far-away workplace. Chinese search engine 'Baidu' has released a heat map to visualize the migration movement.

Heat map migration movement - by Baidu

Heat map migration movement - by Baidu

Many companies and factories close their doors about 10 days before the Chinese New Year starts, even though the festive period officially lasts only one week. So they do this to give their employees enough time to travel home and be able to do their preparations. It means that companies and factories can already close on January 26, 2019. Before this date, there will always be a chaotic period during which everyone wants to send products to and from various ports with haste, before the country is about to shut down. A complete closure of the business has, of course, economic consequences, so today there are more and more companies and factories that remain open with a minimum occupancy.

In addition, we also have to take into account the travel time back to the coastal cities after the festive period. In many cases the Chinese New Year distorts the production and shipping schedules for about three weeks (sometimes even longer). Most companies and factories will open their doors again on February 18, 2019. You should expect a seriously reduced capacity.

Migration Chinese New Year - train station

Migration Chinese New Year - train station

The last, and not unimportant, phenomenon is that this period is often used to change jobs. So many employees do not return to their current job at all. As a result, factories have trouble finding new employees and carrying out production orders, which can lead to even longer production times and understaffing.

China is a major player in the dairy industry and an economic giant in the global export industry. The effects of the Chinese New Year have an impact worldwide, especially for companies that depend on imports from China. Interfood BV mainly exports to China, but even then the Chinese New Year has an impact on the business.

What can you do to optimally prepare your export to China for the Chinese New Year?

Thanks to years of international experience and knowledge of the dairy market, Interfood knows exactly how its supply chain can run as smoothly as possible. Below, we have listed six tips to optimally prepare you for export to China during the Chinese New Year. These six tips for export to China are actually always important, but become even more important during this festive period.

1. Realize what the Chinese New Year means

In the Netherlands it is hard to understand that companies can close for almost a month following a holiday. Certainly, we are also going on a holiday, but a company will never close completely. By recognizing that almost everything will close and that you have to take into account a seriously reduced capacity, you have the opportunity to plan better.

2. Make your logistic planning well in advance

Make sure that your shipments are planned well before the Chinese New Year and that good agreements have been made to endure the Chinese New Year period. You should aim to let the ships arrive well before the Chinese New Year, so that there is enough time to clear the goods. Sending the original export documents to your customers must also take place before the Chinese New Year as these documents are necessary for the customs clearance of the goods. This requires an advanced planning to minimize problems. The shipping period could possibly be longer because there could be several 'blank sailings', in other words a regular shipping boat that normally goes to China every week but is now out of service.

3. Maintain a strong relationship with your client or supplier

A strong (long-term) relationship with your customer or supplier is vitally important. If you are one of the newest contacts during this period of extreme activity, you could get less priority when it comes to handling the process. Therefore make the Chinese New Year negotiable at an early stage. Ask which measures have been taken or can be taken and how you can time the delivery as well as possible. Show interest and understanding and suggest possibilities.

4. Align with your own forwarder

To avoid delays you can choose to arrange the shipping process yourself and use a freight forwarder. Many forwarders have years of logistical experience in combination with the Chinese New Year and are familiar with the do’s and don’ts. Over the years, Interfood has built a number of strong relationships with our 'forwarders' and problems have rarely or never occurred. However, you can never fully capture this because they also depend on the shipping companies' planning.

5. Make a logistic planning for the period after the Chinese New Year as well

Above we already mentioned in the article that sometimes employees don’t return to their current job after the Chinese New Year. With a shortage of staff it can take a while before the normal production or shipping time is reached again. Make this negotiable in advance, ask for expectations and include this in your planning.

6. Ensure a written confirmation of all agreements made

It is very important that you have a written confirmation of the agreements made. Contract agreements should be clear, ensure that all export documents are in order (e.g. Bill of Lading, Certificate of Analysis, veterinary documents), plan the payments and always work with a proof of sending and / or receipt of documents. For example, the Bill of Lading is the shipping certificate of the goods issued by the shipping company with which the goods are shipped.

In short: The sooner you start planning for the Chinese New Year, the better the logistics process will be. You can never start the planning around the Chinese New Year too soon. We hope that these 6 tips will contribute to a successful plan and a solid strategy for the next Chinese New Year.

2019 - The Year of the Pig

2019 - The Year of the Pig

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