Across the world, businesses are gearing up for peak shipping season that typically runs from August to October, and preparing for the expected increase in demand ahead of the holiday period. While planning ahead is the key in all supply chain operations, it is especially the case going into China’s Golden Week – a week long public holiday in the first week of October.
What is the impact of Golden Week on logistics
- Capacity shortages
China is one of the world's largest and most significant markets, and there is immense pressure to maintain productivity and supply chain efficiency throughout the year. During Golden Week, however, the biggest exporter in the world takes a seven-day break to celebrate its National Day, resulting in a reduced number of employees working at China's various ports and terminals. Factories will also face minimised capacity as workers leave for this public holiday, leading to a decrease in the production rate during this period. To ensure shipments reach their destinations on time with better cost efficiency, it is essential to plan supply chain logistics well in advance to allow for enough lead time.
- High demand and limited space available
With the pre-Golden Week rush usually starting three to four weeks before the main event, many companies tend to speed up their production process to transport goods in and out of China before the public holiday. The higher demand for transportation puts added pressure on ocean freight, inland transportation, air freight, and other logistics services, causing an increased likelihood of cargo delays.
“The main drivers of peak season ahead of Golden Week are retail and lifestyle companies that are preparing to restock their shelves in time for the holiday period and Christmas. Because these companies have seasonal products, their demand across the year is also changing,” says Alexandre Pinto, Market Manager at Maersk.
- Gridlock
Like a proverbial game of musical chairs, companies that haven’t planned ahead or aren’t working with a logistical service provider that can offer multiple solutions, may find that when the music stops, in this case when Golden Week hits, they won’t have cargo spot. The above-mentioned factors lead to an overall gridlock for many companies.
Working with a logistical service provider like Maersk that has a controlled-asset network means that you can find solutions that you might not expect.
How to prepare your supply chain for Golden Week
- Get your shipments organised: A smooth journey starts with good organisation. Using all-in-one platforms will give a complete overview of the entire shipment process, and using containers built for intermodal freight transport will allow cargo to seamlessly transition from ocean and barge to rail and truck. With Maersk, you have flexibility on service picking, enabling you to add inland services to an ocean booking if there is need. This eliminates the need to engage multiple vendors, which is especially useful during the rush peak shipping season, where there is a heightened possibility of discrepancies.
- Book your shipments in advance: Proper forecasting and planning of your cargo helps increase the predictability of your supply chain, and together with booking in advance makes cost planning easier and more transparent. “Historically during September and October peak shipping season, we see a decrease in capacity in the market compared to the previous months,” explains Pinto. In the past four years, an average of 16% of capacity was removed from the market in September and October, compared to July and August, according to Sea Intelligence. By booking early, businesses can ensure there is space on the vessel and that their shippings will arrive on time to hit the shelves before the holiday period.
- Make sure your cargo can move with agility: When planning inbound cargo in advance, it can happen that demand at certain markets is shifting at short notice. To make these demand patterns work for your business, it is critical that you remain in control of the destination and speed of your shipment at all times. With flexible supply chain solutions, businesses can position cargo closer to key markets and change final destination to faster serve the end customers, as well as slow down or speed up their supply chain in response to the market shifts.
- Work with a logistics partner that can plan for contingencies: You never know what obstacles you can encounter during the rush of peak logistics season. At Maersk, we are able to support customers with a wider range of services and solutions under the unified brand. Combining the expertise, products, and services makes it possible to respond in a faster and more agile way to disruptions that may arise along the way – helping set up a supply chain that works for you when and where you need it.
- Stay up to date with what is going on in the market: It is crucial to stay in the know of what's happening within the area you are shipping, and beyond. Maersk’s regional Market Updates bring you the latest developments across ocean, inland, customs, and ecommerce, and help you anticipate and respond to any potential issues that can arise during peak season. Head over to Logistics Insights for the latest insights across the industry to help you navigate supply chains and shape your logistics strategy.
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