• Joseph O'Donnell

Extended Chinese New Year celebrations cause disruption of sailing schedules to last until March

Updated: Feb 21, 2020

Decrease in global trade volumes due to Chinese New Year celebrations causes a spike in blank sailings as ocean carriers offset low demand for vessel space. Photo from www.pixabay.com

The annual Chinese New Year celebrations lead to a regular decrease in U.S. import volumes as many Chinese businesses shut down their operations in celebration of the holiday.

This period of low trade volume causes demand for space on ocean vessels to decline. In response, ocean carriers issue blank sailings (sailing cancellations) to keep vessels full and ocean rates level.

The impacts from these blank sailings on the global supply chain are normally felt until a few weeks after the start of the New Year festival, which for 2020 began on January 25.

However, the Chinese government made the decision to extend the Chinese New Year celebrations to mitigate the spread of the coronavirus via the work place.

According to CNBC, businesses in many areas of China were instructed by the government not to resume operations before February 10 at the earliest. As a result, the extension will also prolong the period of low trade volumes between China and the U.S. to last until the beginning of March.

Thus, shippers and buyers can expect to experience rolled bookings or sailing cancellations throughout the remaining weeks until the beginning of March. Unfortunately, ocean carriers do not always provide advanced notice of blank sailings, so it is not uncommon for shipments to be rolled even after receiving a booking confirmation.

The best way to avoid these issues is by consulting Outer Seaways prior to finalizing orders to ensure a scheduled sailing is available. Otherwise you have a higher risk of finished products taking up inventory space, or committing to non-feasible project deadlines.

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