30 January 20  |  International Shipping

Chinese New Year Extended Due to Coronavirus: How it Will Affect Your Supply Chain

The Chinese government announced on January 27, 2020 that it would extend the Chinese Lunar New Year until February 2, 2020 in order to prevent the coronavirus from spreading further. The Chinese Cabinet stated it hoped to ‘reduce mass gatherings’ and ‘block the spread of the epidemic’ by putting cities under quarantine. 

Additionally, other provinces will extend the holiday until February 9, 2020. Hong Kong’s Chinese New Year only changed by one day, extending the holiday to January 28, 2020. Many companies will not resume work until the day after the new holiday end date. 

The majority of mainland China (listed below) will extend the Chinese New Year to February 2, with business resuming operations on February 3. 

  • Dalian
  • Fuzhou
  • Hong Kong
  • Qingdao
  • Tianjin
  • Xiamen

The following provinces and cities have extended their holiday until February 9:

  • Jiangxi Province
  • Shandong Province
  • Anhui Province
  • Chongqing Province
  • Jiangsu Province
  • Yunnan Province
  • Guandong Province
  • Zhejiang Province
  • Shanghai Province

Finally, Hubei Province (where the city of Wuhan, the start of the virus, is located) will be closed until February 13.

How This Affects Supply Chain

In addition to quarantining cities, the Chinese government is also closing borders and shutting down key transportation corridors. These changes will have a major impact on the movement of freight into and out of the region. Land, air, and ocean cargo transportation have been suspended, which will affect manufacturing deadlines and shipping schedules. 

Cargo is expected to stand still until late February or early March. Furthermore, extended factory closures could make suppliers unable to fulfill orders, thereby causing companies to rely on their own inventory. Supply chains will be strained as product availability is limited to what is present in U.S. warehouses. 

Supply chains, in particular, will feel the effects as truckers, warehouse staff, cargo handlers, and manufacturing staff cannot return to work in multiple areas across the country.

Impact of Coronavirus on Air Freight

Air cargo will be impacted the most as travel bans and canceled flights will reduce available air cargo capacity. Extended factory shutdowns will cause companies to run low on inventory and companies cannot rely on air freight to resupply their stock. Conversely, there may be a surge in demand when factories re-open.

Cargo aircraft will be severely overbooked due to the lack of commercial flights and airlines may pull plans from the Asia market for use elsewhere, further reducing capacity. With airfreight limited, pricing will climb.

Fortunately, there is no evidence that the coronavirus can be transferred on cargo, which means contamination will not spread through freight.

So far, major international airports (Shanghai, Beijing, and Hong Kong) were open as of January 29, but that could change if the health crisis gets worse. The coronavirus will also affect the U.S. stateside. On January 27, the U.S. Centers for Disease Control and Prevention (CDC) raised its travel warning for the entire country to Level 3 and has urged U.S. citizens to avoid all nonessential travel to China. 

The CDC also announced they will be screening travelers at 20 U.S. airports, including those listed below. These airports receive 90% of all passengers from China. 

  • Los Angeles
  • San Francisco
  • John F. Kennedy International Airport in New York
  • Hartsfield-Jackson Atlanta International Airport
  • O’Hare International Airport in Chicago

Impact of Coronavirus on Ocean Freight and Ports

Cargo types from many industries could be impacted as heavy traffic in industrial goods and raw materials try going through the affected areas. The type of commodities and sectors that rely on river freight and that are too heavy to be transported on trucks will be most affected. Such commodities and sectors can be agriculture, steel bars, iron ore, coal, chemicals, retail goods, furniture, and construction materials. 

Ocean bookings in February may also be disrupted, especially if they originate in Wuhan, or around it. As of January 29, only Wuhan port is closed. However, if the virus worsens, port authorities may implement reporting and quarantine measures to guard against the spread of the disease from vessels that were previously at, or by, infected ports. 

Impact of Coronavirus on Transportation

Lockdowns and quarantines have been the primary methods for stopping the spread of the virus, which has virtually halted transportation across the country, especially in affected areas. Almost everything is shut down with no one on the roads. The government has told everyone to stay home and if people are traveling on roadways, there are road stops where temperatures are taken. 

Hong Kong and Singapore have announced travel restrictions to and from mainland China, while Russia and Mongolia have closed their borders to China. 

Contact R+L Global Logistics for Immediate Assistance

The coronavirus is impacting freight into and out of China. R+L Global Logistics continues to monitor the situation closely and we are committed to assisting you with any logistics or supply chain needs throughout the epidemic.

Our international logistics professionals will work through any delays and communicate with you quickly and effectively to minimize the impact of the virus on your operations. Chat with one of our experienced customer service representatives today to get the help you need now.