Newsletter Blast: Psssst... Chinese New Year is coming. You have 72 hours to place an order!
What is Chinese New Year?
Chinese New Year, also called the Spring Festival, or CNY is the country’s most important holiday.
Like Easter, Christmas, or Thanksgiving people travel back to their hometowns to spend time with their families. The Chinese New Year National Holiday in 2022 starts on Monday the 31st of January and officially lasts for 7 days in Mainland China.
While the official holiday only technically lasts for about a week, most factories are closed for an entire month, with disruptions lasting even longer than that. This lunar new year holiday is also celebrated in Vietnam and in other Chinese communities of South East Asia (Thailand, Malaysia, Singapore, and Indonesia). The lunar new year will directly impact businesses importing products from China and Vietnam.
With that said, manufacturers in South East Asia, Japan, Korea, India, Europe, and the Americas also procure raw materials and components from suppliers in Mainland China, and to a lesser extent from Vietnam. This time of the year is especially risky for businesses importing seasonal products, such as outdoor furniture and swimwear.
You certainly don't want to be left waiting months for inventory in 2022. If shipping by SEA, you have 72 hours to place your order to not have your product affected by Chinese New Year!
GetGlobal's 6th Annual Summit
December 2-3
Virtual — Free Registration
Learn More & Register
Global Trends & Outlook, Supply Chain Macro Picture, Digital Commerce
This year's annual summit will have three segments to help you thrive worldwide...
Global Update & Outlook
Tradekraft: A Journey into Supply Chain Strategy & Innovation
GetGlobal Digital Commerce
Check out our confirmed speakers here
Key Topics Include...
Analysis & Forecasts on Economy, Global Trends, Marketing & Pop Culture
Social Shopping, Live Shopping, & the Future of Video in Web 3.0
In-Depth Supply Chain Coverage from Source to Shelf
Balancing Supply Chain Efficiency, Resilience, and ESG Considerations
The Post-Covid Consumer Experience: Lessons Learned (The Good Kind)
Keys to Selecting Your Next Foreign Markets
Keeping Brand Promises in a Complex Business & Social Environment
China Update & E-Commerce Dive
and more... check out the draft agenda
What's caused America's supply chain crunch? 60 Minutes follows the U.S.' struggling supply chain, from choked ports on the West Coast to packed rail yards in Chicago. Along the way, we found finger-pointing, huge profits, and massive losses.
Your Thanksgiving turkey and cranberry sauce won’t be the only things impacted by 2021’s supply-chain disruptions. Advertisers are also figuring out how to best allocate holiday ad spend at a time when the items they’re advertising aren’t always in stock.
Remind me of what’s going on? Covid spurred a supply-chain crisis that’s impacting everything from cars to Ben & Jerry’s ice cream. According to ABC News, “economists believe there are several factors contributing to the supply-chain shortages,” including labor shortages and high consumer demand.
The same, but different: As holiday shopping ramps up, marketers are rethinking their advertising strategies. Some are shifting ad dollars to later in the year—performance agency Threepipe Reply’s partner Farhad Koodoruth told Digiday some of its clients have scaled back ad spending around days like Black Friday since their stock is low.
“They’re thinking even if we don’t have a great Black Friday period, we can go harder later in the quarter when stock is back to make up for some of those losses,” he said.
More money, more ads: Supply-chain issues have led to price increases for consumers, which is also having an impact on marketing. Per Business Insider, “The cost of goods are increasing uniformly across the industry, so no one brand has a pricing advantage. To stay competitive, brands are rolling out new product features and using ads to promote them.”
Bottom line: Last year, advertisers tried to reflect 2020’s unconventional holiday season in their commercials. This year, marketers face a different slew of challenges as they prepare for the holidays.—MS
SOURCE: MARKETING BREW
WHAT WE’RE READING
Pangaia looks beyond sweats. Istanbul’s commuter dog. Entitlement isn’t helpful. Solid tips for a strong road trip. ‘The Capote Tapes.’ The future of brunch is in Asia. **Sponsor Nod: How Chris Sacca would prefer you email him.** Job seekers are ghosting on job offers. Why do Egyptians love liver? This vintage Cartier is a beauty. Low-brow cocktail concoctions. The one-bedroom museum. Are photos are too flattering now? Bars where you can smoke indoors. The meaning of mission statements. In praise of the handwritten letter. And a tour of the late Glenn O’Brien’s home.
How to shop for furniture on Instagram
Some tips and pointers here. Curbed
Why maximalism is having another moment
When more is more. FT
A new wellness brand
That harnesses the power of the garden. NYT
Sesame Street now has its first Asian American muppet. TikTok is rolling out a digital magazine for marketing advice on the platform. Merry merry: How brands can best capitalize on this (still unique) holiday season. Insta: The “How many hashtags should you use on Instagram” question, answered. Carbon offsets: Brands keep buying ’em, but they might be counterproductive.
The Sims video game posted a screenshot of a Taylor Swift–obsessed Sim running home to listen to the new album on Twitter…and it now has more than 10,000 likes, perhaps more engagement than Jake Gyllenhaal’s Twitter will ever see again after today? Modsy, an interior design service, reimagined what four of the album’s songs would look like if they were rooms in a house.—PB
Asia → North America (TPEB)
Demand is expected to be strong on TPEB for the remainder of 2021. The outlook reflects shippers placing bookings for cargo that must depart prior to Chinese New Year in early February. High demand and reduced capacity is keeping rates at elevated levels, which according to some estimates, are not expected to return to pre-Covid levels for at least another year. Congestion and vessel bunching, which cause schedule and capacity issues downstream, remains severe.
Rates A few carriers implemented GRIs for 2H November. Rate levels remain elevated, and the premium demand outlook is strong.
Space Critical
Capacity/Equipment Critical/Severe Undercapacity
Recommendation Continue to book well in advance (at least 4 weeks) from CRD to target ETD for the best chance of hitting timelines.
Asia → Europe (FEWB)
Space and equipment crunches continue as market demand consistently exceeds supply with rates very high for a long period. The overall space situation is worsened by blank sailings and poor equipment availability. Carriers are overcommitted and are limiting booking acceptance or rolling shipments. With continuous vessel delays and shifts, schedule reliability is very low.
Rates Rates remain at a record high level. However, they have been stable in October and November. There are some slight downward rate revisions by a few carriers.
Space Extremely critical space situation
Capacity/Equipment Severe equipment shortage across all Asia origins.
Recommendation Book at least 4 to 5 weeks prior to CRD. Consider premium options, which may be limited. Be flexible in regard to equipment.
Indian Subcontinent → North America
More omissions challenge ISC services both at origin and destination. Carriers continue to use omissions as a lever to correct schedules impacted by ongoing vessel berthing delays.
Rates remain stagnant for the past month
Space remains a challenge as global congestion results in omissions and altered sailing schedules. LA/LB, Savannah, and most recently Charleston are being hit the worst with berthing delays.
Equipment of all types are in deficit. Carriers are replenishing equipment to main import/export ports on priority.
Recommendation Use premium services on urgent shipments and shipments with CRD approaching. If routing to USWC, consider rerouting to USEC. Be flexible with inland container depot (ICD) location and equipment type.
Asia
Northern China: The market has quickly rebounded from the holiday and is trending towards a traditional peak season. With continued cancellations from major carriers, rate levels are further increasing. Major factors of peak season capacity constraints are:
Limited terminal capacity restricting most carriers from returning to full schedules
Key global accounts continuing to ship large volumes out of China
Shippers rushing to catch up to the US holiday season
For FEWB, the heavy congestion at FRA and AMS terminals is recovering very slowly and will require more time to alleviate the backlog.
Overall, demand will greatly outweigh supply over the next few weeks and rates will maintain at high levels.
Southern China: Demand is outpacing supply and capacity is tight ex-HKG due to passenger flights still being canceled. Some carriers have also announced flight cancellations. Rates on both TPEB and FEWB lanes continue to increase.
Taiwan: The market continues to be tight and rates high as it trends towards a traditional peak season. Capacity is almost fully booked through the end of the month with demand particularly high to the US east coast. For volumetric cargo, the earliest departures are around the first week of November.
SE Asia: The BKK market situation continues to be very tight with no significant changes from the prior week. Demand and rates ex-Northern Vietnam are stable and some factories are working overtime to produce cargo. Demand ex-Southern Vietnam is increasing, largely driven by key accounts and charter requests ex-SGN. Rates continue to climb and capacity is very tight. Space is fully booked through the weekend.
LA/LB Ports Delay Dwell Fees FreightWaves reports the ports of LA and Long Beach delayed consideration of the $100 per day fee for ocean carriers with containers that dwelled for nine or more days. This decision followed a 26% reduction in long-dwelling containers after the plan was announced in October. The fee will be reconsidered on November 22.
Read More: Port Workers Portray the Reality of Bottlenecks
Air Cargo Takes a Hit from Congestion Air cargo volumes are falling as peak season takes hold. Data shows volumes out of Shanghai fell 16% and volumes out of Europe are down 10%. Delays across the U.S. and Europe are hampered further by the labor shortage for ground handlers and unevenly distributed flight schedules, according to The Loadstar.
Factory Output News
Taiwan TSMC will join forces with Sony to build semiconductor fabs in Japan and Kaohsiung. Source
Cambodia might lose favorable trade status as the US warns investors operating or planning to operate in Cambodia over human rights, corruption, and organized crime. Source
Indonesia Despite the global supply chain disruption, business is blooming for Indonesian furniture makers with exports rising 30% in the first half of 2021. Source
Sri Lanka Sri Lanka’s government to reduce budget deficit target to 8.8% of GDP, to roll out goods and service tax introduced in 2021 budget. Source
Pakistan government prioritizes power and fertilizer sector for gas supply, the industrial consumer may suffer gas shortage. Source
Economic Developments
US Inflation Pops in October. The Consumer Price Index (CPI) rose by 6.2% over the last 12 months, the fastest rate since 1990. If one excluded the volatile food and energy categories, the increase was 4.6%, the highest since 1991.
Producer Prices Pop Even More. In the year to October, the US Producer Price Index (PPI) was up 8.6% for the broad index, 6.2% less food, energy, and trade services. China’s PPI rose 13.5% over the year to October, the fastest rate since 1995.
US Average Real Earnings Fall. Average nominal hourly earnings rose by 4.9% in the year to October, but when deflated by the CPI increase, that meant a 1.2% real decrease.
Lots of US Job Quitting. In September, the number of quits (4.4m) and the rate (3.0%) were series highs. Meanwhile, there were 10.4m job openings, or 1.4 per unemployed worker.
Consumers Feel Blue. The University of Michigan consumer sentiment index for early November showed its lowest level for a decade, down 6.6% from the previous month and 13.1% over a year.
Japan GDP Shrinks in Q3 at a 3% rate, a steeper drop than expected and the fifth drop in the last 8 quarters. Real GDP is now at its smallest since late 2014.
China Shows Economic Strength as both industrial production (up 3.5%) and retail sales (up 4.9%) beat estimates.