February 11, 2021

The implications of Chinese New Year for Australian freight

Chinese New Year is a festival celebrating the beginning of a new year on the Chinese lunar calendar.

The implications of Chinese New Year for Australian freight | Ofload

This year the festival runs from Friday 12th to Sunday 21st of February and marks the Year of the Ox. Under normal circumstances, the week-long public holiday causes the largest human migration globally, as families reunite across China to spend New Year’s Eve dinner together.

It’s this migration that can impact freight and logistics, as production slows across the festival period. Almost all factories and manufacturers in China are closed for a minimum of one week. The reopening process can also be gradual with some factories not returning to full operations for up to a month.

This causes congestion and capacity issues for global supply chains in the lead up as businesses look to fulfil their shipping needs in advance.

The impact of COVID-19

The usual migration has been dampened this year with the Chinese government imposing restrictions to prevent a coronavirus outbreak. The government has called for the population to avoid nonessential trips during the holiday, and is requiring negative tests and quarantine to move around.

These restrictions will not affect the public holiday production shutdown, thus resulting in continued congestion impacts on supply chains.

Congestion will also be affected this year by rising costs for Chinese imports into Australia. These rising costs have been fuelled by surging online shopping due to increased household discretionary spending. This is reflected in the cost of shipping materials: the cost of a 40ft container from China to the Port of Melbourne has increased by about $3000USD from the same period last year.

The impacts of a reduced domestic spend from tourists will have an inverse effect on trucking in Australia. Several hundred thousand Chinese tourists would normally travel to Australia for Chinese New Year, but our closed borders will have a knock-on effect in hospitality and retail spending. This will likely result in decreased freight movements as local demand for goods decreases compared to the previous year.

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