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Wednesday, Jan 19, 2022

Chinese New Year threatens to further disrupt the global supply chain as smaller shippers in China suspend services for the holidays earlier than usual

Chinese New Year threatens to further disrupt the global supply chain as smaller shippers in China suspend services for the holidays earlier than usual

The Chinese holiday falls on Feb. 1, a full 12 days earlier than in 2021. Shipping companies also have to factor in long quarantine times for their employees.
Some shipping companies are suspending services in China ahead of the new year, further straining global supply chains heading in to 2022.

The potential disruption this year is exacerbated by two factors: This year, Chinese New Year falls on February 1, 2022 — a full 12 days earlier than in 2021. And, as Bloomberg reported in November, China's Covid-zero policy has sailors anticipating longer than usual quarantine periods before they can make their way back on land. In some cases, the outlet found, sailors were required to serve up to seven weeks in quarantine before being cleared to return home.

The new timeline is being especially felt in China's southern manufacturing hub, where independent shipping providers service the region. Many — which would have typically taken off around two week before Chinese New Year in a pre-pandemic climate — have already begun winding down business for the year in anticipation of the holiday.

As a result, major global shippers, including Ocean Network Express and Hapag-Lloyd, have already halted new container bookings to smaller ports in South China.

The longer-than-usual suspension of feeder services could have a knock-on impact on the global supply chain, as cargo to and from smaller Chinese ports may surge earlier than usual.

"Some of this might be redirected onto land transportation once the feeder capacity decline, which can give rise to shortage of capacity on the landside also for shippers only using the large ports in the region," said Lars Jensen, CEO of consultancy Vespucci Maritime, in a post on LinkedIn.
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