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Oct. 2, 2020

Golden Week Triggers Last-Minute Shipment Strategies for Peak and Holiday Seasons

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As Golden Week kicks off in China, importers in the US and Europe are making final preparations for the end of the year. Normally, shippers need to book prior to Golden Week to stock up for the winter holidays. But this year, there’s a mix of challenges, including difficulty forecasting and volatility across all transport modes. It’s a critical window of time for businesses to solidify year-end strategies. These tips and insights can help finalize arrangements.

Timing

Golden Week usually runs from October 1 to October 7, with the entire country celebrating the founding of the People’s Republic of China. This year, the Mid-Autumn Festival, a Chinese calendar holiday, falls on October 3, so the Golden Week holiday has been extended one day to October 8.

During this time, factories close, so production halts. Ports run on skeleton crews. Drayage, trucking, and rail to Europe is limited or shut down. Essentially, cargo that isn’t shipped before the holiday week is subject to the congestion of the period afterwards.

Covid Complexities

This year, global trade is recovering from the impact of Covid-19. Chinese exports are growing by double digits, and retail sales have returned to pre-Covid levels. Yet many nations are still struggling,

The recovery gap highlights some of the issues burdening US and European shippers.

First, equipment shortages in Asia have created ongoing dilemmas as carriers struggle to return containers, empty or with goods. Since September is always a busy month ahead of Golden Week, existing shortages may be exacerbated in October.

Secondly, a sudden rise in short-term contracts is eating up remaining capacity and driving rates upwards. Shippers who made volume commitments when trade was at a standstill are realizing that e-commerce and pent-up demand are driving peak season—and they need the capacity, after all.

These short-term contracts may provide a bridge solution for shippers seeking transport that just makes it for Black Friday and December shopping.

Those turning to airfreight solutions can expect a similar scenario of limited capacity and higher rates. Space is still tight as many passenger flights remain grounded. And, delayed fall product releases from Apple and Samsung have moved into the post-Golden Week crush.

Blank Sailings

Blank sailings are usually expected right after Golden Week as carriers look to optimize space after a week of factory closures. Blankings became more common this year, with carriers cancelling up to 25% of sailings during spring and summer to maintain rate stability during Covid-19.

This year may be different, though—or at least similar to years past. Strong suggestions from regulators in China and the US have persuaded some carriers to reinstate sailings and relieve capacity crunches for shippers in October.

With market conditions still fluctuating, the closures and delays of Golden Week make it crucial for companies to nail down year-end shipments as soon as possible. For help with urgent or holiday booking, please email hello@flexport.com. And, don't forget to attend our free digital summmit on October 14, FORWARD 20 by Flexport.

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