What is Golden Week?
Golden Week begins on October 1, China’s National Day. On this day in 1949, the People’s Republic of China was founded. October 1 is also the beginning of a work-free week in China – almost all of China’s inhabitants do not work during this period, or if they do, they do so on a shoestring.
The Chinese government introduced this national vacation not only to commemorate the founding of the People’s Republic of China, but also to boost domestic tourism. This week, therefore, almost all of China sets out to see the country’s famous sights, such as the Great Wall, up close, or to visit relatives or friends. This is because many Chinese work in the large industrial centers, but still have relatives in the rural regions of China. During the Golden Week, a huge migration of people takes place.
A time of upheaval
Because the size of the country means that one week is often not enough to visit relatives or go on a tourist trip, many employees and workers set off before October 1 or do not return to their places of work until after October 7. It also happens time and again that employees do not return to their previous workplace because they start a new job elsewhere. In many cases, therefore, Golden Week is also a time of upheaval for Chinese workplaces.
For the country’s economy, Golden Week naturally has consequences that also impact global supply chains. Since no work is done during the period from October 1 to 7, production in factories is largely at a standstill. Even in the ports, only the most urgent work is done. Days before Golden Week and even afterward, it is often not possible to produce at full capacity.
What are the implications of Golden Week for retailers?
For online merchants, retailers, and logistics providers, Golden Week means that they have to plan ahead. This is because, during the peak season with Christmas and the high-turnover sales days in online retail, Black Friday, and Cyber Monday, warehouses have to be filled to meet demand. Anyone ordering goods in China or receiving goods from China can cross the period from October 1 to 7 off their calendar, or should at least mark it in red.
Because during this time, virtually nothing is running in China. All factories and offices are closed except for a skeleton staff, and public life (administration and co.) is paralyzed. Containers with goods are jammed in the ports, ships are not unloaded or loaded, and shipping companies reduce their capacities during national vacations. Customs operations are also very limited.
Even after the Golden Week, not everything is running smoothly again. Retailers and logistics companies must therefore be prepared for delays both in production and in the shipment of ordered goods. Not least because the ports can only process the accumulated containers gradually. The situation is generally similar for air freight.
Good preparation is everything!
If you don’t want to be faced with empty warehouses during peak season, the most important distribution phase of the year, you have to prepare for Golden Week. What does that mean in detail?
- If you have items produced in China for the Christmas business, you should talk to your suppliers in August or early September at the latest and ask whether they can still finish the goods now. If your items are already in production, ask what date the manufacturer will deliver them.
- For items that will be shipped by ocean freight, retailers should book an appointment at least three, preferably four weeks before the start of Golden Week. This means that the transport date and route should be fixed by the beginning of September at the latest.
- Air freight shipments should be booked at least one week before Golden Week. Here, too, the rule is those who arrive earlier have the better choice – especially when it comes to terms and conditions.
Peak Season Surcharges around Golden Week
In both ocean and air freight, carriers impose peak season surcharges due to the high demand around Golden Week. Traders should already take this into account when setting their prices. After all, what good is it if the merchandise arrives on time, but the projected selling prices barely cover the costs?
- To avoid peak season surcharges, it can also make sense to find a temporary storage solution in Germany. After all, there are always freight delays and rollovers around Golden Week. This means that goods are not loaded onto the intended ship, but are rescheduled, i.e. “rolled over”, onto one of the following ships due to a lack of capacity.
- Peak season surcharges are also usually levied on air freight. It is therefore advisable to find out about freight rates around Golden Week in good time. It may be that a later freight flight, with items arriving just in time, is cheaper than a flight just before Golden Week. Overall, however, the same is true for air freight: the earlier the booking is placed, the greater the selection and the better the terms.
- Air freight is also always a good alternative to sea freight for quickly stocking items that are urgently needed.
- Trucking service providers in China can also expect prices to rise due to high demand.
What retailers and logistics providers must always be prepared for: Carriers reserve the right to adjust peak season surcharges should circumstances require it.
Do you need support? Forto is there for you
Every year, the period around Golden Week presents a challenge for retailers and logistics providers. Forto can help you meet this challenge.
- For example, it can sometimes be difficult to choose the most suitable (and cheapest) mode of transport for your freight. While sea freight is notably popular, disruptions can lead to delays and ship cancellations – and that’s especially a problem for time-sensitive goods like winter fashion or items that need to be in stock for Black Friday. Alternatively, air freight may be an option or a combination of ocean and air freight. Those who can should also think about considering a destination port other than the one previously envisioned should there be capacity constraints on certain routes. It is often easier to transport by land using trucks.
- Using Forto’s digital platform, you can compare freight rates at any time and select the most favorable suitable option and book it online immediately – it is also easy to combine different transport modes.
- Another alternative that can be chosen for cost reasons or lack of other capacities is to select a slower ship. This is because, as a rule, the ships that take more time for the same route are less quickly booked up. This option can also be quickly viewed through Forto’s digital platform.
- Through proactive, customized notifications, Forto also informs you of expected disruptions as needed.
- Time and again – even in peak season – you also have to reckon with ship failures (blank sailings). If this is the case, Forto’s platform and our team of experts will help you to quickly find adequate alternatives.
- LCL transports may also be an option for you in the period around Golden Week. LCL transports (Less than Container Load) allow you to transport time-critical goods that you urgently need, but which do not fill an entire container. You can also get instant prices for this online on our platform. To transport your goods more sustainably, Forto also offsets the CO2 emissions for your LCL cargo free of charge.
- Of course, our team of experts (also represented by offices in China) is always available to answer your questions personally and will be happy to advise you on the shipping options available to ensure that your goods reach their destination on time.
But please remember: Around Golden Week, the rule is always that bookings should be placed as early as possible to ensure that the goods reach their destination on time.
Therefore, stay in close contact with your Forto team and let us know which shipments have a particularly high priority for you.
And one more thing: your business partners in China will surely be happy if you wish them a “Happy Golden Week”!
Want to learn more about flexible freight solutions before and after Golden Week? Talk to your Forto account manager or contact us here.