As all of us in the toy industry are aware, things come to a halt in China during the Chinese New Year. It’s a holiday in which workers travel home to see parents and family. Last year’s holiday was a far bigger challenge to the toy industry than in past years due to the coronavirus pandemic, which forced the city of Wuhan to go into lockdown on January 23, roughly three weeks before Chinese New Year.
The combination of the virus and the holiday led to a sharp reduction in the workforce, and a resulting decline in the number of container ships available. The result was canceled shipments and a spike in container prices.
This year Chinese New Year begins February 12, and it would typically last for up to two weeks. Unlike past years the Chinese government is asking workers to stagger their vacations to generate less crowding on buses, trains, and airplanes. As a result, the 2021 holiday may last longer than is typical.
That would be extremely worrying, except, and here’s the good news, there will likely be more containers ships available and far fewer shipping cancellations than last year. Bloomberg spoke with Vincent Clerc, Head of Ocean Transport for Maersk, the world’s largest container shipping line. According to Mr. Clerc, Maerstk will be using all of its capacity during the Chinese New Year. Mr. Clerc stated: “We need the whole infrastructure to work throughout the Chinese New Year,” and as a result, “we are going to cancel very few” sailings.”
He went on to say:
“Demand for transport is so high that there is enough need for us to load more than we normally do during the two weeks of Chinese New Year…” “The other reason is that we need our ships to sail to bring back containers from the U.S. and Europe to Asia.”
Let’s hope other shipping lines follow Maersk’s direction and take pressure off the vital lifeline between China’s manufacturing and the rest of the world. If they do, we should see container costs decline and goods shipping smoothly to retail shelves once again.