The upcoming Chinese New Year (CNY) holiday, starting on January 29 and lasting two weeks, is predicted to send shockwaves through global shipping well into the second half of the year. Danish forwarder DSV warns of compounded disruptions from network reshuffles, surcharges, and blank sailings.
Impact of Chinese New Year on Global Freight
The annual CNY holiday sees much of China shut down, disrupting capacity and creating logistical bottlenecks. DSV highlights the usual consequences of CNY:
- Prolonged transit times.
- Flight cancellations.
- Void sailing schedules.
These disruptions, already significant in their impact, are forecasted to be exacerbated by geopolitical factors and changes to shipping alliances.
Alliance Reshuffle and Increased Surcharges
Changes in carrier alliances, effective February 1, are expected to further destabilize the industry. MSC, the world’s largest container line, announced a hike in its Emergency Operation Surcharge (EOS) starting January 27:
- From North Europe to the US, Puerto Rico, and the Bahamas:
- $1,300 per TEU (up from $500).
- $2,000 per FEU (up from $1,000).
MSC cited “general operational disruption” during the transition to the new alliances as the reason for the increase.
Mitigating Disruptions
Forwarders like Maersk are taking steps to manage capacity challenges during CNY. However, Maersk warned clients of a voided voyage (506W on its Safina service) departing Ningbo on February 5, assuring affected cargo would be rebooked across its network.
Sea-Intelligence data indicates carriers have blanked just 9% of capacity ahead of this year’s CNY—a significant drop compared to the average reductions of previous years. However, CEO Alan Murphy warns of potential last-minute capacity cuts, which could exacerbate challenges.
Preparing for Prolonged Impacts
Businesses are advised to deepen inventories and prepare for equipment shortages. While not expected to reach the severity of early 2024, the combined effects of CNY and alliance reshuffles could extend into spring and potentially into late 2025.
As the industry braces for these disruptions, careful planning and adaptability will be crucial for businesses to navigate the turbulent months ahead.