Lunar New Year lull to make supply chain ‘even worse’ amid factory closures, port delays in China

Start of the Beijing Winter Olympics in early February and the possibility of power cuts are further clouding the ability of manufacturers to predict output levels

Industry expert says major problem facing global supply chain is that there is no time to recover before next shock hits

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While the global shipping network is no stranger to delays and shocks around the Lunar New Year, supply-chain disruptions are expected to be worse than usual during the upcoming holiday. Photo: Xinhua

Published: 12:00am, 28 Jan 2022Updated: 2:42am, 28 Jan 2022

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.

“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.

03:08

China’s Omicron outbreaks dampening Lunar New Year travels

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.

Lunar New Year lull to make supply chain ‘even worse’ amid factory closures, port delays in China

Start of the Beijing Winter Olympics in early February and the possibility of power cuts are further clouding the ability of manufacturers to predict output levels Industry expert says major problem facing global supply chain is that there is no time to recover before next shock hits

Start of the Beijing Winter Olympics in early February and the possibility of power cuts are further clouding the ability of manufacturers to predict output levels

Industry expert says major problem facing global supply chain is that there is no time to recover before next shock hits