New year, family and the globalization

Efficiency and performance: These two features describe ideal supply chains for industry and commerce. They ensure that globalization works. Even more surprising that the entire world completely pauses for a few days at the beginning of the year. The reason for this is the Chinese New Year or the Spring Festival: The factory buildings of the industrial world stand still for a few days.

Employees in China are familiar with two major vacation periods: On National Day, October 1, the “Golden Week” begins. Time to travel and discover the world. The New Year or Spring Festival is different: it begins on New Year’s Day and does not end until the following full moon two weeks later. Although China adopted the Western Gregorian calendar in 1911 – the country still adheres to the traditional Chinese calendar according to the lunisolar calendar, which includes the sun and the moon. The New Year or Spring Festival is the most important festival in China.

Professor Barend ter Haar, Hamburg University

“Sometimes, people have saved up for years to travel thousands of kilometers to their families”

The spring festival is emotionally important

While Western holidays such as Christmas or New Year are today celebrated especially by urban elites, Chinese New Year remains a family celebration with great emotional significance for the Chinese.
“The festival has been around in China for over two millennia,” explains Barend ter Haar, a sinologist at Hamburg University. “Everyone tries somehow to join their family in their home region for this festival.” China is deeply rooted in traditional structures.
“Family bonds are very strong – and even modernization does not change that,” explains ter Haar. These close bonds ensure that the side effects of social modernization are absorbed. For example, by obliging children to take care of their elderly parents.

Largest migration in the world

The new year always begins on the second new moon after the winter solstice: This year, New Year fell on February 12, 2021. Then began the year of the Buffalo. The impulse to family reunion changes the whole country – the New Year is considered the largest migration of people in the world – including this year. Despite the COVID-19 pandemic, the government expects that 1.7 billion trips will take place throughout the Spring Festival season. Of course, this includes both outbound and return trips, since the country has a population of only 1.44 billion. The Chinese National Railway alone expects 296 million rail passengers – about a third fewer than two years ago.
Strict hygiene regulations and quarantine requirements shall contain the travel flow as far as possible. But even that does not stop many people from going on an often arduous and long journey. “Sometimes, people have saved up for years to travel thousands of kilometers to their families,” says ter Haar.

Closing production facilities

The festival has even other effects. Because most factories and production facilities close for the period, industrial production is sometimes already shut down a week before the festival. Some factories do not resume operations until a month later or start up slowly to their previous performance. This impacts on production in many countries around the world when supplier parts from China are processed there or assembly processes take place in China. In addition, the New Year is also celebrated in other Asian countries, even though not to the same extent.

Alexander Naumann, Executive Vice President Ocean Freight, Cluster Germany/Switzerland

“We have talked to many of our customers quite early on about their supply chains and planned upcoming shipments.”

Forward planning for sufficient capacities

For companies in other countries that rely on supplies or goods from China, this means a great planning effort several weeks in advance. Logistics service providers are also becoming active in order to absorb delivery peaks through advance bookings. “We have talked to many of our customers quite early on about their supply chains and planned upcoming shipments. This enabled us to secure sufficient capacity even in these turbulent times and to ship most of the goods on time despite the Corona related challenges,” says Alexander Naumann, Executive Vice President Ocean Freight, Cluster Germany and Switzerland at DB Schenker.

“China’s New Year and the impact on logistics. An interview with the sinologist Barend ter Haar. #DBSchenker #happychinesenewyear“

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Once again this year, seaports are experiencing a huge rush in the weeks prior to the Chinese New Year. China’s exports have rocketed again after the covid pandemic, and industry worldwide has picked up again. And the retailers in Europe and in the USA have ordered new goods for the Easter business and the summer season. Still, New Year knows no exception: for a few days the world pauses.

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