Golden Week is a national holiday in China that lasts for seven days. It is typically celebrated from October 1-7 and is a time for Chinese citizens to travel and visit family. This holiday can have a significant impact on logistics due to the increased demand for travel both within China and internationally.

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What is the Chinese Golden Week?

As one of the world’s biggest and most important markets, China faces huge pressure on its logistical infrastructures to maintain a certain level of productivity and efficiency to keep the global supply chain oiled, running, and stable.

From factories and warehouses to ports, terminals, and more, Chinese workers across all logistical sectors clock long hours all year round to ensure the upkeep of the supply network worldwide.

But twice a year, the world’s largest exporter permits itself a break.
Known as the Golden Week in China, there are two such week-long respites in the country — one in each half of the year.

The first, known as the Chinese Lunar New Year Golden Week, is at the start of the year in January/February to give people time off to celebrate the Chinese New Year.

The second, the National Day Golden Week, is part of the country’s national day celebrations and happens in October — right in the middle of the shipping peak season.

Given China’s influence on the global market and world trade, a week-long —albeit anticipated— lull has the potential to cause chaos on supply chain operations and rippling effects and logistical delays around the world.

In this article, we’ll be focusing on the National Day Golden Week in October. But to understand how the National Day Golden Week in China affects logistics, we must first dive into some basic facts about the holiday.

When is the Golden Week in China?

The National Golden Week in China takes place in the first week of October every year to celebrate the founding of the People’s Republic of China.

The Chinese Golden Week runs every year from the 1 October (Tuesday) to the 7 October (Monday).

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What happens during the Golden Week in China?

During the Golden Week in China, workers take a break from the hustles and bustles of life. Throngs of travellers crowd trains, buses, airports, to either get home to visit their families or travel.

And while China deals with the travel logistics of its Golden Week, the rest of the world grapples with the impact this has on their supply chain logistics.

_Over the course of the Golden Week, factories across the country close and

production comes to a standstill. Likewise, at ports and terminals, work and personnel are reduced to the bare minimum._

With operations running at a tiny fraction of full speed,

productivity and efficiency levels shrink and it becomes logistically impossible for exporters and importers to get their goods moving into and out of China.

That means that all the action has to take place before the festivities begin.

How China Golden Week affects logistics

In the weeks leading up to the China Golden Week, demand for Chinese exports skyrockets as businesses attempt to get their exports out before operations in China completely shut down.

In response to the activity deficit, shipping carriers often announce service cuts.

At the time of writing, two of the main shipping alliances have announced cuts of 15 weekly sailings from Asia to North America:

Nine to the West Coast
Four to the East Coast
Two to the Gulf Coast

Even post-Golden Week, capacity and personnel often remain limited and production can be slow to pick up. Carriers may also continue to cancel sailings in the weeks that follow.

That said, failure to get your merchandise into or out of China before the festivities may result in dire consequences, as delays from the Golden Week can sometimes last for months.

For businesses, this may translate to potential breaches in contracts, accruing delay fees, low sales figures, and so on.

The Golden Week Effect on Sea Freight, Air Freight, and Rail Freight

The effect of Golden Week on China’s transportation infrastructure is significant.

During Golden Week, China’s seaports and airports are often congested with travelers and freight. For example, the number of containers handled at the Port of Shanghai typically surges during Golden Week. This can lead to delays in loading and unloading ships and in the movement of containers to and from inland destinations.

The increased demand for transportation services during Golden Week can also lead to higher air and rail freight prices. This is due to the limited capacity of these transportation networks and the fact that many freight companies schedule their shipments around the holiday to avoid delays.

Golden Week can also have an impact on global supply chains. Many factories in China shut down for the holiday, which can lead to disruptions in the production of goods exported worldwide. This is particularly true for products that require parts or components from China. For example, the Golden Week shutdown of a factory that produces smartphone cases could lead to delays in shipments of those cases to other countries.

The Golden Week effect is not limited to China. It can also be seen in other countries with large numbers of Chinese tourists, such as Thailand and Japan. These countries often see an increase in tourism during Golden Week and a corresponding increase in the demand for goods and services. This can lead to higher prices for hotel rooms, restaurants, and other tourist attractions.

The Golden Week effect on rates and availability

It is no coincidence that the Golden Week in China takes place during the shipping peak season. In fact, it is considered to be the trigger to the first wave of soaring rates, high demand, low space and equipment availability, roll-overs, and congestions.

High demand, low space and equipment availability, roll-overs, and congestions are synonymous with both the China Golden Week and the shipping peak season.

But how are they a direct factor of the fluctuating and soaring shipping costs?