A recent news article published in the Yahoo Finance states that Lunar New Year lull to make supply chain ‘even worse’ amid factory closures, port delays in China.
Further disruptions to global supply chains
The container shipping industry is bracing for further disruptions to global supply chains ahead of the Lunar New Year holiday and Beijing Winter Olympics, which are expected to lead to factory closures for an extended period in China.
According to a recent Container xChange survey of forwarders and shippers, more than half of the respondents expected the Lunar New Year holiday – from January 31 to February 6 this year – to make the ocean supply chain “even worse”. And most said the holiday would result in delayed transit times and fewer available containers.
While the Lunar New Year shocks are an annual occurrence, they are being compounded this year by the already-disrupted global shipping network, as well as by China’s insistence on maintaining a zero-tolerance approach to the coronavirus even as more transmissible variants have emerged.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Chinese new year holiday impact
“Predicting the impact of the Chinese New Year holiday in 2022 is rather more difficult than in previous years because China’s policies on internal travel are rather opaque,” said Johannes Schlingmeier, co-founder and CEO of Container xChange.
To prevent the spread of the virus, local authorities throughout the country have been urging residents to avoid “unnecessary” trips to their hometowns over the holiday.
The start of the Beijing Winter Olympics in early February, and the possibility of power cuts, is further clouding the ability of manufacturers to predict output levels, Schlingmeier added.
“There are a lot of uncertainties over the next few months,” he said.
According to the survey, two-thirds of shippers and forwarders expected output from Chinese manufacturers to decline significantly next month, and they were planning ahead by placing orders earlier.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Yahoo Finance