Dealing with Supply Chain Challenges

Potential Shipping Delays and How to Navigate them

Chinese New Year or Lunar New year as it is also known, falls on Saturday 10th February this year and lasts for a total of 15 days until February 26th, with the Lantern Festival being held on Saturday 24th. Although such a long break can be difficult to understand for many Europeans, the Chinese population works extremely hard, often away from home, and this may be the only opportunity in the calendar year for people to visit family and friends.

2024 is the Year of the Dragon, the 5th animal in the 12-year cycle of the Chinese zodiac signs. According to Chinese culture, the dragon is powerful, energetic, goal orientated, intelligent, confident and courageous – all sounds good – hence the Dragon is considered one of the most powerful and lucky zodiac signs. However, this is just the start, as dragons born in different years have different personalities (based on the Five Elements Theory), then there are things that are lucky and unlucky, followed by which zodiac signs dragons are most compatible with, etc, that is a lot for anyone outside the culture to understand and appreciate!

The New Year holiday is a huge event celebrated by mainland China, Taiwan, Malaysia, Thailand, and the Philippines, with other countries or regions with a large Chinese population also marking the occasion. This generally has a huge effect on business, not only because of the long shut down period but also the knock-on effect. Large portions of the migrant workforce take extended leave, with many returning at staggered intervals or not returning at all! Unfortunately, businesses don’t know the situation in advance, so there can be a fair amount of disruption during the post-holiday period, as replacement workers are employed, trained, and get up-to-speed.

How Lucid Electronics can help with Supply Chain Challenges

At Lucid, we always start planning for the Lunar New year in early Q4 as in practice, holiday preparations tend to start much earlier (mid-Jan in fact), and sometimes things do not settle down until mid-March. By advising customers early, adjusting production and shipping schedules, and getting orders placed well in advance, it is possible to navigate through this tricky time without major incident, but it takes a team effort!

With manufacturing capacity already at maximum, the case every year at this time, the global freight market is always under pressure. The current crisis in The Red Sea further complicates matters, as carriers are forced to reroute their vessels. This has led to exceptional demand for shipping containers as people panic, exacerbating an already stretched capacity situation while pushing up rates for both sea and air freight, a trend set to continue for the foreseeable future.

To mitigate any potential disruptions caused, we advise to plan accordingly up to and including spring, although ideal would be for the entire first half of 2024. This is because, if drought conditions persist and impact the canals, we may see a knock-on effect throughout the summer months and beyond.

To prepare for these upcoming challenges:

We remain committed to providing you with reliable services during these challenging times, so please contact us if we can help in any way.