CSCMP's Supply Chain Quarterly
January 19, 2020
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January 7, 2020

RETAINING SUPPLY CHAIN FLUIDITY AMID CHINESE NEW YEAR SHUTDOWNS

Proactive Preparedness Key For Non-Disruptive and Seamless Logistics

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Atlanta, GA — (January 7, 2020) — Chinese New Year (CNY) is one of the most impactful events to international trade. In 2020, January 25th will be the first day of CNY, known as the "Year of the Rat". The Lunar New Year is also celebrated in other Asian countries such as Vietnam and Korea also at the same time. This is typically a time when Asians travel and visit relatives to celebrate the festivities with loved ones. For instance, some 80 million Chinese workers, most from urban areas along China's coast, travel back to their rural hometowns.

Ahead of the holiday, suppliers doing business in Asia have long been in the midst of operational scheduling and planning how their continuity of trade will remain seamless during this period. The CNY holiday not only marks the beginning of a new year. This period also represents a complete shutdown of China's manufacturing infrastructure, when virtually all businesses and factories in China close from one to four weeks. All suppliers will wind down operations? one to two weeks? in advance of the holiday. In total, the holiday impacts about two months of production.

"With the upcoming Chinese New Year period, it is a time of many challenges for importers and exports. Proactive planning and preparation are key to effectively navigating and managing supply chain issues that could occur during this time; ensuring that freight is handled consistently and without interruption. At Dachser, we aim to minimize any impact to our customers." said Guido Gries Managing Director, Dachser Americas.

It is typical that freight volumes build just a few weeks before the holiday period, as factories will speed up their production, which will not resume until a week or two after the holidays. There are two events that occur during this time, the Official Holiday and the Traditional Holiday, causing some factories to stay closed longer. In fact, some suppliers remain shutdown for more than a month.

How your business can be impacted:
All business during CNY will face delayed production time, as will quotation requests.
Many workers will not return to their workplace immediately after the holidays, which means previously estimated production times might be extended.?

If orders are placed late, it is possible they will be placed further back in the production line.
With more than a month's worth of orders backed up to start with, factories will favor orders from their preferred partners.

Depending on Chinese sourcing, businesses should plan ahead:
Build up adequate inventory, considering a period of up to four weeks after Chinese New Year and even find out if your Chinese source has inventory in non-Asian locations, so you can use other supply chains.
Inform your forwarder about your priority shipments, in case there is limited space.?
Book shipments well in advance of CNY.

Reserve space on passenger flights for shipments that cannot be delayed. The rates are slightly higher, but this measure will keep your supply chain running.

Holiday closure schedule for Dachser's Asia offices:

Country Holiday Offices Closed Other Details
Mainland China Chinese New Year January 24 - 30
Hong Kong Chinese New Year January 25 - 28 Offices in Hong Kong may close at 4 PM
on January 24th
Taiwan Chinese New Year January 23 - 29
Korea Lunar New Year January 24 - 27
Singapore Chinese New Year January 25 - 27 Offices will close at 1 PM on January 24th
Malaysia Chinese New Year January 25 - 27
Vietnam Lunar New Year January 23- 29
Indonesia Chinese New Year January 25


"We have reviewed the critical steps that are needed to prepare for Chinese New Year with our customers well in advance. This proactive preparation helps to ensure that there is minimal disruption to their global supply chains." added Gries.

About Dachser USA Air & Sea Logistics: Founded in 1974, Dachser USA Air & Sea Logistics Inc. is the U.S. subsidiary of German-headquartered Dachser SE. The company is a leading global logistics provider employing 30,600 professionals in 399 locations and handling 83.7 million shipments annually. Dachser USA Air & Sea Logistics is headquartered in Atlanta with locations in Atlanta, Baltimore, Boston, Charlotte, Chicago, Cincinnati, Dallas, Detroit, Houston, Los Angeles, Miami, Minneapolis, New York and Phoenix. Dachser USA Air & Sea Logistics offers optimal access to international markets and ensures seamless integration of all import and export activities via air or ocean to and from Europe, Asia and South America. For more information, visit www.dachser.us

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