Along with feasts, fireworks, and the coming together of relatives, one of the Chinese New Year traditions is the giving of red envelopes with money inside, often handed out to children. There is a Chinese New Year tradition in the supply chain, and it’s the often costly congestion that occurs around and during this celebratory time. The 15-day festival, which is celebrated in China and throughout Eastern Asia, rings in the new lunar year. The event usually begins in the latter part of January and wraps up in the first week of February.
Because the Chinese government mandates that businesses close for Chinese New Year, manufacturers and logistics service providers must shut their doors. Workers in China get at least seven days off–some as many as 15–to celebrate the holiday with family. This break makes for a tricky time in logistics because of China’s importance as a center for global manufacturing.
This article looks at the effect of the holiday hiatus on freight claims, also known as cargo claims, and what having freight claims management software can do to help shippers stave off the Chinese New Year complications.
While the holiday lasts 15 days, the burden of Chinese New Year 2023 for shippers can last almost a month. That’s because the problem is threefold:
Let’s take a closer look at each one.
Knowing that there will be government-mandated closures for a week or more, manufacturers scramble to complete orders ahead of the holiday so that clients can get what they want before the closures. That means a greater volume of goods needing to be shipped, putting a heavy burden on docks, warehouses, and logistics departments. From 2011 to 2020, the China Containerized Freight Index, which measures export volumes from China, on average, increased by 3% in the seven weeks from week 10 before Chinese New Year to week three before Chinese New Year, according to Niels Rasmussen, the chief shipping analyst at BIMCO.
As mentioned above, the manufacturing plants completely close for one week or more due to mandates. But shipping transport facilities remain open during that time, sometimes with smaller crews. One problem, though, is that no goods can be delivered from the factory to the nearest ocean or air shipping facility. Those products remain stuck at the factory until the workers return.
Also, no quotes will be reviewed during that time at the factories.
It might be a slight overstatement to say it is business as usual once the break is over. After the Chinese New Year, shippers must grapple with a slow return to full production. Also, when workers travel home to their native provinces, some stay there and begin working at another factory. So factories return to production with a reduced workforce and must spend time recruiting and training new staff. Another concern is that ports are often overwhelmed with a sudden glut of shipments because manufacturers are trying to make up for the lost time.
As all parties are hurrying up to stay ahead before the Chinese New Year and attempting to catch up after the holiday, there is a likely chance of seeing more damage claims at the factories, manufacturing hubs, and transportation facilities. Shortage claims are also a repercussion of factory workers rushing to reach quotas. At the ports, employees often deal with an overly large volume and can be overwhelmed by the shipments, leading to some being misallocated and left at the port.
Around the Chinese New Year, many logistics providers shut down their operations, and communication throughout the supply chain becomes improbable, if not impossible. This is where on-demand access to transport documents is extremely helpful. With on-demand access, shippers can keep up with all their shipping documents even though they cannot communicate with logistics partners based in China.
Organizing freight claims documents can be a hassle and time-consuming. But with freight claims management software, you don’t have to search through Excel spreadsheets or multiple files stored in a drive or a dropbox. FreightClaims.com’s software platform allows you to manage all your freight claim documents in one place and reduces workforce time with fill-in-the-blank templates that reduce repetitive tasks. Analytics and reporting help develop a clearer view of freight claims processes by using a streamlined dashboard to make it easier to visualize where each claim is within the freight claims process.
Many in China and other countries see Chinese New Year as a joyous time. Despite the headaches closures bring, there is a way for those in freight claims management to face the obstacles with a positive approach. Hopefully, the fireworks will be limited to the holiday celebrations.
Freight claims management software is the tool that can help ease that Chinese New Year fear, and FreightClaims.com can be the partner that makes it happen. FreightClaims.com’s software allows you to manage freight claims from start to finish. It will help you through every stage until the claim is settled, including organizing pictures, shipping documents, communications, and meeting deadlines from one user-friendly platform. Request a demo today at FreightClaims.com.
