Today marks the beginning of the mid-autumn festival in China, let’s see how it affects the container shipping industry and the trend in the past 9 years.
What is the Mid-Autumn Festival?
Mid-Autumn is a famous festival in many Asian countries like China, Thailand, Korea, Cambodia, Malaysia, Vietnam, Philippines, etc. The festival is held on the 15th day of the 8th month of the lunar calendar with a full moon at night, corresponding to mid-September to early October of the Gregorian calendar. The customs vary throughout Asia on how it is celebrated.
What is Golden Week?
China celebrates its national day on October 1 to commemorate the founding of the People’s Republic of China in 1949. This is around the time of the mid-autumn festival. If the two celebrations coincide, there is a week of holiday in China which is hence referred to as the ‘Golden Week.’ Almost all companies, including factories, are closed during the week and the transport services are halved. The Golden week, which is celebrated majorly for 7 days in China, has had only two 8-day golden weeks celebrations, in the past two decades with this year being the second one.
How does the Golden week impact the shipping industry?
Golden week generally attracts a lot of tourists and Chinese citizens tend to travel to their hometown. The golden week is an excellent retail opportunity, because of the increase in purchases made. Factories also get in a rush to complete their order in time. As the world trade leader, the Golden week in China affects the supply chain all over the world. Even those who don’t trade with China are affected by the Golden week celebration.
The pre-golden week rush coincides with the beginning of the Christmas season, thus putting a lot of pressure on ocean freight. Shippers everywhere are affected with Golden week as it results in capacity reduction all over Asia- Pacific and creates backlogs that needs to be cleared before proceeding to other processes and orders.
The golden week lies in the peak season of trade resulting in price hikes of containers, freight rates and an increase in blank sailings. The peak season in the shipping industry is from mid-August and stretches through October when the demand is high, supplies are low which results in tight capacity and high freight rates.
In order to serve the industry in time, there is a lot of pressure on importers and exporters. Exporters rush to finish production and prepare for pre- golden week sailings while importers rush to make enough orders and ship as well. Overall, as the country is preparing for the holiday, international trade movement is at its peak.
Post the golden week, the demand for containers and trade traffic are expected to remain high due to the pressure to re-shelf the diminishing stock ahead of Christmas and serve the strong demand. Scarcity of space for cargo is created by carriers as more space is allocated to Chinese shipments. Usually, other countries have to wait till this backlog is cleared out. A lot of countries experience the challenge of a high freight rate, which leads to the shortages and hiked prices for shipping containers, during this period.
Looking at the data in figure 1, generated from the Chinese Ministry of Transport for container handling in the port of Shanghai, the largest port in the world based on the number of containers handled. It is evident that the containers handled in the past 9 years has substantially increased overall with the monthly trend being more or less same over the years. This, unarguably reflects China’s influence on global trade.
Even though there is an existence of the rush to meet up on exports and imports demands as well as the high prices in the sale of containers before the Golden Week Celebrations, it may seem easy to assume that the number of containers handled in September will be more in the port of Shanghai. A further analysis of the collective data for the months in the past 9 years, revealed that this is not the case.
The analysis conducted and shown in the graph above in figure 2, does not reflect a high number on the containers handled in the Port of Shanghai during the peak season exclusively. During the period of 2011 to 2019, September which is usually the peak of the peak period, reported the highest number of containers handled at the Shanghai port in 2018 alone. This leads to the assumption that the peak season does not necessarily lead to an increase in the number of containers handled in the port.
July came up reflecting four years out of the nine years as the month with the highest number of containers handled in the port, while November followed with three years out of the remaining five years, and the month of August had the remaining two years as the month with the highest number of containers handled, in the nine-year period. With this being the case, pre-booking or pre listing containers, can help make them available and reduce delays especially due to the high prices of containers when they are needed for exports or imports.
Through BOXXPORT.com, you can pre-list your available containers and buy containers at their earliest availability. You can compare container prices at the provided location to ensure, you get the best price and deal for your containers. Our operations team will ensure that you have a smooth experience with us, even when the market is chaotic.
By pre-booking your containers on BOXXPORT.com, you can avoid the traffic and price surges during the Chinese New Year and the mid-autumn festival. Once you pre book your containers, the prices at which you book gets locked as well.
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*December data not available