2024 Lunar New Year Market Perspective

Leading into the Lunar New Year
As the “Year of the Dragon” commences on February 10, 2024, mainland China experiences a festive period marked by business closures and suspended production. Chinese suppliers gradually wind down operations one to two weeks before the public holiday. Despite the official week-long holiday, many factories close for a month or longer. Sea-Intelligence predicts up to a 30% drop in capacity for North Europe, 12% for Asia-Mediterranean, and 50% for the US East Coast in late January.

The holiday impact extends for about two months, prompting companies reliant on Chinese or Asian suppliers to stock up on inventories, resulting in a pre-holiday cargo rush. Normalizing market conditions post-festival may take additional time. To mitigate potential supply chain disruptions, clients are encouraged to place bookings earlier and adhere to cut-off dates. Recommended booking lead times are 4-6 weeks before the holiday for sea freight and 1-2 weeks for air freight.

Expectations after the Lunar New Year
Supply chain bottlenecks, intensified by tension in the Red Sea and Panama Canal restrictions, coupled with high seasonal demand, have led to a surge in ocean freight rates. Industry experts predict that post-Chinese New Year, the return of mega-vessels to Asia, and the resumption of their loops could potentially prompt a reduction in rates.

Routing Strategy amid Red Sea Tensions and Panama Canal Drought
The dynamic situation in the Red Sea brings complexity and uncertainty to international shipping, especially the Asia-Europe route.
Challenges include:
• Extended transport times due to diversions through the Cape of Good Hope.
• Uncertainty in shipment schedules as shipping companies continuously adjust plans based on developments.
• Increased costs passed on to shippers, with major airlines announcing surcharges and significant rises in freight rates.
• Complex cargo transportation environment, with significant climatic shifts affecting sensitive goods.

Despite the unavoidable impact on global trade, our professional team implements early warning plans and maintains vigilance to address emergencies, emphasizing:
1. Monitoring freight rate dynamics for timely updates.
2. Staying informed about changes and cancellations in shipping schedules.
3. Providing advance forecasts to ensure space allocation.