Chinese New Year, or what is the link between the Nian beast and Gross Profit in the European wallet?

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Chinese New Year, or what is the link between the Nian beast and Gross Profit in the European wallet?

Everyone knows that when the Europeans get back to work after the Christmas break and the New Year, the Chinese are preparing for a great celebration. What does this mean for the Chinese and how does the rest of the world relate to it? Let’s try to understand why this festivity is so important and what’s the deal with the red colour.

Well, there are two legends. According to the first, the inhabitants of China were haunted by the Nian beast, which ate people and caused fear. Over time, people found a way to defeat the beast. They began to leave animals in front of the victims’ homes that distracted the beast’s attention and decreased appetite. With time, the inhabitants realized that the beast was also deterred by red colour and noise. Hence the tradition, that everything related to the legend was red, while the firecrackers and fireworks were a source of the noise.

The second legend tells the story of an old man who turns out to be a god helping people to fight the beast. He orders the monster to hunt for predators instead of humans and thus saves the inhabitants.

Although they are legends, they represent the most important time of the year for the people of the Middle Kingdom. It is a time of celebration, fun, joy, but also … a holiday. How should the importer of goods from China be prepared so as not to be surprised?

It should be remembered that the Spring Festival is determined according to the lunar calendar, and this means that each year it falls on different days. It is important that the main celebration lasts a week, but in practice, it turns into a monthlong dormant period. What is the reason for this?

China is a country with a huge area. People working in factories often have to overcome more than 4 thousand kilometres to get home. So employers often close factories 4-5 days before the actual holiday and after the Lantern Festival, i.e. the last day closing the Chinese New Year.

The most seasoned importers are preparing for this period already in the middle of the calendar year, planning production, deliveries, and promotional campaigns. First of all, they care about inventory, because it is the worst possible time to place new orders, plan business trips and check new suppliers.

It will sound brutal but, for a poorly planned production and delivery schedule, there will be a high price to pay. Freight forwarders always warn their customers about raising freight rates for the container, groupage, and air freight imports, but those who have not experienced how harsh this experience can be, believe until the last moment that this time it can work.

It starts innocently with raises in early December, then it’s only worse. The scale of price increase for transport ranges between 20 and 60 percent, and in some cases, it is close to 90 percent!

Not only the price is a serious problem, but also a second, equally important issue: timeliness. When it seems that everything is agreed with the supplier, production is finished, CUT-OFF is given, ETD (Estimated Time Departure) is in our hand and we are glad that we managed to escape the celebration, we get this tragic message: ROLLING. So, theoretically, our container was removed from the ship in the port of departure, because there was not enough space for it. In practice, this means that the goods of another customer have been shipped. That customer has paid more for space or was simply more important for the shipowner, because of a large volume. And then what?

Then, dear client, you can sit there on your tail feathers feeling sorry for yourself because in the darkest scenario, if you do not have a good forwarder, your goods will be at the port for a good amount of time. The port employees will only be interested in your container after returning to work, i.e. after a minimum of 2 weeks. It should be remembered, however, that before China returns to work and is back to life, another few days pass, because the time frame of the celebration itself is one problem, the other is strictly related to human capital.

One should imagine that many Chinese people are returning to the provinces, having earned money and are not eager to return to the agglomeration – at least not at this time, maybe next year. Therefore, staff shortages are also the norm during this period. You never know if the person you just started to correspond with will greet you after the Lantern Festival again.

Therefore, we have a problem with timeliness, costs and … quality of manufactured goods, because the Chinese manufacturer is trying to satisfy his new contractor in Poland, e.g. by promising him quick delivery, thus accepting too many orders. With a team working under time pressure, tragedies happen. Can you imagine a classic football on the European market that has an oval shape reminiscent of American football? And you get 4 containers of those. Then what? Where to look for help? How to make a complaint? And what is worse, how to remove such goods from a promotional newsletter – because marketing is already booming.

In the end, let me tell you a classic story. I’m booking a small 200-kilo parcel air shipment and what information do I get? Book immediately, otherwise after January 14, your offer will increase by 30 percent – an authentic from a Chinese agent – of course, we do not guarantee a place in the airline, service and timeliness.

To sum up, Nian is not as black as he is painted. However, you need to be well prepared to face him. Otherwise, he will empty your wallet in an unplanned way. You also risk losing the quality of the goods, and timely delivery can be a pipe dream that will cost you much more than money – the loss of your credibility and customer confidence.

Magdalena Barczyk has been a sociologist and logistics specialist by profession, logistics specialist by passion for 16 years. She got to learn the logistics industry from scratch, going through all the stages of building her brand, to ultimately conduct training. To conduct training in the field of negotiating freight sales techniques, route planning, introducing new tools to the logistics market, optimizing transport costs, importing from China, she uses a variety of teaching methods.

Photo: Pixabay

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