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Chinese New Year blog 12-09-21@1.5x

December 16, 2021

For Europe, Lunar New Year Delays May Be Relative

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The pre-Lunar New Year period is typically the busiest time for export out of China, as factories rush to get cargo shipped before they close for the holiday.

This year is a bit different, though. The market has experienced peak-level demand throughout already. Here’s what may happen on the Far East Westbound trade lane.

Blank Sailings

Pre-Covid, all available capacity would get deployed ahead of the New Year, and blank sailings would only take place afterwards, once demand dipped.

Now, port congestion leads to vessel delays and vessel sliding, so carriers are introducing blank sailings earlier than in the past.

Covid Lockdowns

The Covid situation in China continues to bring uncertainty. Currently, there is a lockdown in Shaoxing and Zhenhai districts in Zhejiang province.

Depending on developments, there is a possibility lockdowns will be extended to further regions. This would affect production and operations.

Demand Backlog

While demand is strong compared to supply, the overall booking intake for pre-Lunar New Year has been relatively stagnant on the Far East Westbound trade. There is not a huge cargo rush from Asia to Europe, like there is to the US. In terms of absolute volume, December is slightly lower than November.

However, blank sailings and vessel sliding result in limited capacity, so space remains tight. Most January sailings, based on proforma schedule, are expected to delay into the post-New Year period.

But this is because delays already range from anywhere between one week to up to four or five weeks.

We haven’t experienced a Lunar New Year like this one before, so it’s wise to expect and plan for disruptions pre- and post-holiday.

For more insights into trade lane activity, subscribe to the Freight Market Update.

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