As millions of people in China and elsewhere in Asia celebrate the Chinese Year of the Snake on January 29, 2025, supply chain managers around the world may already be struggling with significant loads at ports and warehouses. Also known as Chinese New Year (CNY), this annual logistics déjà vu seems to bring new supply chain challenges 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 the beautifully decorated dragon performing its traditional Chinese New Year dragon dance in Liverpool, seen in January 2023.
getty
1) Possible fees The new US president’s intention to rule on certain products early in his term could prompt many US companies to ship their goods earlier than planned to arrive before the tariffs are triggered.
2) Attacks on the US East Coast and Gulf CoastAccording to recent reports, it may happen soon if the contract is not ratified on time by both parties, leading to further delivery delays. Last October, strikes brought U.S. freight to a standstill and led to weeks of delays.
3) A weakening Chinese economy and reduced consumer demand for goods, could lead to a possible increase in layoffs and thus labor shortages. As a result, the increase in production demand in the run-up to the Chinese New Year may not be fully met. This begs the question of how to keep internal productivity intact with fewer resources.
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For companies that rely on shipments from China, it is especially important to be aware of and prepared for the typical phases of volatility surrounding the CNY.
“Many Chinese manufacturing companies 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 are coming in for Christmas, New Year and Chinese New Year requirements.”
How can companies sourcing their goods and merchandise from China mitigate, preserve and even optimize the impact on their supply chains amid these celebrations?
Plan ahead and optimize stock
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. Stock levels must be increased to avoid potential production disruptions. Data-driven planning tools and AI-powered demand forecasts can help optimize orders. This minimizes the risk of being left with mountains of products or – even worse – empty shelves.
Consider alternative delivery options
For urgent shipments during the Chinese New Year supply chain disruption, companies should consider alternative shipping options, such as ship-to-rail or an alternative ship-to-air combination.
Expand the supplier base
It is advisable to expand the supplier base and supplier network so that there are backup options in case of a disruption. And given the US President-elect’s announcement to raise tariffs, more thought needs to be given to shifting procurement and manufacturing sites to other countries in order to offset dependence 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 send them a little thank you note can help you earn points. In the Chinese business world, guanxi — good relationships — matter more than you might think.
And remember in the Year of the Snake: stay adaptable, think ahead and gracefully maneuver around obstacles. With smart planning and a touch of calm, Chinese New Year 2025 will be no 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.
