More Chinese factories working through Lunar New Year
Source
American Shipper
Post Date
02/11/2021
More Chinese factories will be producing exports for European and North American consumers rather than shutting down for Lunar New Year celebrations, signaling little reprieve for record spot rates on both trades and underscoring seemingly unrelenting imports.
At the same time, government agencies are urging companies to give bonuses to migrant workers not to return home. Vietnamese Prime Minister Nguyen Xuan Phuc on Jan. 10 announced the restriction of inbound flights until mid-February. The attempts to slow travel for the two-week celebration period starting Feb. 12 come amid new COVID-19 outbreaks in northern mainland China that triggered lockdowns in 11 regions, including Hebei which circles Beijing.
¡°A number of China factories are looking like they will continue working through Chinese New Year (CNY) as much as they can in order to catch up on back-orders,¡± Roberto Giannetta, managing director of the Hong Kong Liner Shipping Association (HKLSA), told JOC.com.
Prior to the most recent spikes in COVID-19 infection rates and government pressures against travel, some factory owners were considering exting the vacations for factory workers.
The decision to keep factories during the holiday follows an acceleration in the growth of Chinese merchandise exports over the second half of 2020. Exports of Chinese goods in December jumped 18.1 percent year over year in December, with shipments to the US and Europe rocketing 34.5 percent and 21.4 percent, respectively, within the same period, according to an IHS Markit analysis of data from China General Administration of Customs (GAC). That was down slightly from the 21.1 percent growth rate recorded in November, but still more than double the 7.2 percent growth recorded in July and one of the highest rates in three years despite a strong 2019 comparison.
Seeing robust volume fores from customers, container lines haven¡¯t blanked sailings during CNY as they normally do. On the trans-Pacific trade, carriers have blanked approximately 2.1 percent of total deployed capacity to the West Coast and 3.6 percent to the East Coast, compared with respective capacity cuts of 30.5 percent and 27.7 percent during CNY 2020, according to Sea-Intelligence Maritime Analysis.
A spokesperson for OOCL said that there is likely to be more cargo as factories remain and workers stay during the holiday, holding the carrier back from deciding its blank sailing program during the holiday period.
Carriers preparing to roll cargo A senior utive at a Hong Kong-headquartered forwarder told JOC.com that carriers, whose ships are already operating at full capacity, are preparing to roll cargo that will be loaded on sailings during and immediately after the Chinese New Year holiday. Hub ports across Asia saw increased cargo rollovers in the fourth quarter of 2020, with carriers in Shanghai rolling 37 percent of all containers in December, according to data from supply chain visibility provider Ocean Insights.
¡°The space situation will continue to remain tight after Chinese New Year as there is a heavy backlog of orders and most factories have already received orders up to the second quarter of 2021,¡± the utive said.
In spite of high overall demand for Chinese exports, several feeder operators have halted services between Hong Kong and the main Shenzhen terminals to smaller ports in the Pearl River delta to allow for exted quarantine restrictions introduced by Chinese authorities on crews returning to their hometowns for Chinese New Year.
As a result, carriers including Ocean Network Express (ONE) and OOCL have advised customers they will stop accepting inbound feeder cargo for transshipment in Hong Kong and the Shenzhen terminals.
¡°There are, indeed, some barge operators that are continuing service in the lead-up to the holiday, but not many,¡± Giannetta said.
Port operators Modern Terminals and Hongkong International Terminals (HIT) confirmed their respective terminals at Da Chan Bay and Yantian in Shenzhen would remain operational throughout Chinese New Year. A HIT spokesperson said the terminal was working with shortsea providers and liners to give them flexibility in receiving cargo and deploying barges in order to mitigate any disrupt
