While millions of people in China and elsewhere in Asia celebrate Chinese Year of the Snake On January 29, 2025, supply chain managers around the world may already be facing significant delays at ports and warehouses. Also known as Chinese New Year (CNY), this annual logistical déjà vu seems to bring new challenges to the supply chain every year.
This year is no different. Let’s take a look at three areas of supply chain volatility as we head into CNY.
Close-up of beautifully decorated dragon performing the traditional Chinese New Year Dragon Dance in Liverpool, January 2023.
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1) Possible invoices The new US president’s plans to impose tariffs on certain products at the start of his term may prompt many US companies to ship their products earlier than planned to arrive before the tariffs are triggered.
2) Strikes on the US East Coast and the Gulf Coastaccording to latest reportsmay happen soon if the contract is not ratified by both parties in time, resulting in further delays in delivery. Last October, strikes brought U.S. freight to a standstill and led to weeks of delays.
3) A weakened Chinese economy and sluggish consumer demand for goods, could lead to a possible increase in layoffs and thus labor shortages. As a result, increased production demand ahead of the Chinese New Year may not be fully met. This raises the question of how to keep internal productivity intact with fewer resources.
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For companies that rely on deliveries from China, it is especially important to be aware of and prepare for the typical phases of volatility surrounding CNY.
“Many Chinese manufacturing companies have retained fewer employees to fulfill fewer orders than before,” said Jason Chiu, GC Vice President and Head of Center of Excellence, SAP Digital Supply Chain. “However, increasing orders come for Christmas, New Year and Chinese New Year requirements.”
How can companies sourcing their goods and merchandise from China mitigate, sustain and even optimize the impact on their supply chains amid these celebrations?
Plan ahead and optimize inventory
The most important tip is also the most boring: plan ahead – not just for the period before, but also after Chinese New Year, as supply chains often recover in the spring. Inventory levels should be replenished to avoid potential production disruptions. Data-driven design tools and All included-Supported demand forecasts can help optimize orders. This minimizes the risk of being left with either mountains of products or – even worse – empty shelves.
Consider alternative delivery options
For urgent deliveries during the Chinese New Year supply chain disruption, companies should consider alternative transportation options such as ship-to-rail or an alternative ship-to-air combination.
Expand your supplier base
It is recommended to expand the supplier base and supplier network in order to have alternative options in case of interruption. And with the US President-elect announcing an increase in tariffs, more consideration should be given to relocating sourcing and manufacturing locations to other countries to offset reliance on Chinese suppliers.
Maintain relationships with suppliers
Building positive relationships with Chinese suppliers can make a big difference during Chinese New Year. Taking the time to congratulate your suppliers on the occasion or sending them a small thank you note can help you earn points. In the Chinese business world, guanxi – good relationships – count for more than you might think.
And remember the year of the snake: stay adaptable, think ahead and gracefully maneuver around bottlenecks. With smart design and a touch of serenity, Chinese New Year 2025 will not be a hindrance to your supply chains.
With that in mind: 新年快乐 xin nian kuaile!
Download the latest IDC report to learn how companies are using cloud technology to understand supply chain operations and business outcomes.
