DB Schenker's recommendations to prepare for the busiest time of the year in Vietnam
Preparing for Tet 2022
After dealing with so many supply chain, shipping and logistics challenges throughout 2021, a lot of companies may be looking forward to a more predictable, manageable shipping environment in 2022. Unfortunately, there’s yet one more disruptive event to get through before that can happen: Tet or also called Lunar New Year. We have asked our product heads in Vietnam to share tips on how to best prepare for Tet and avoid delays. Please read their recommendations below. For information about Tet 2022 cut off times, closure of our offices, and more, please click here.
We wish you a happy and safe Tet holiday!
Your DB Schenker team in Vietnam
Phone: +84 28 6686 7000 / 1900 986898
The Lunar New Year in Vietnam puts even more pressure on the supply chain
Tet is celebrated on the first day of the first month in the Lunar Calendar. The weeks before and after the Tet festival, are challenging for shippers as it puts high pressure on the supply chains. It’s peak season and more goods need to be supplied to the shops. The demand for products, like food items but also clothing, rises dramatically. Vendors work hard to keep up with the demand and stock-up extra supplies in the warehouses.
This is what you can expect:
Each partner company in the supply chain (from the manufacturer, to the warehouse, trucking company and store owner) is working at full capacity. As a consequence, a small problem in the supply chain (for example because a customer did not book a truck in time) can quickly lead to major stock shortages in stores.
At the same time it becomes more difficult to fix problems and mistakes the closer you get to Tet because people are on annual leave. On top of that, getting goods from the warehouses to the consumer is likely to be more expensive because local trucking companies face capacity problems and sometimes charge higher rates. Planning ahead for Tet is therefore essential.
Land Transport: Local trucking companies close early
After 2 years of COVID pandemic and lockdowns, this year is exceptionally important for Vietnam. As Vietnam is moving to live with COVID and treating it as endemic, we can expect many workers and drivers to make their journey to their hometown earlier. On top of that, it is the January month-end where there will be a rush to deliver products to the ports, supermarkets and shopping malls. It will be an exceptional month where the demand will greatly exceed the logistics supply. While Schenker Vietnam is working to reserve capacity and reduce the peak season surcharge to support our customers and keep their supply chain moving, it is essential for customers to send their delivery plans earlier so that we can work on allocating the capacity to our customers. Roy Sin, Vietnam Country Head Land transport
Contract Logistics: Shelves at the warehouses are full
Prior to Tet, the warehouses operate at full capacity. The shelves are packed and the warehouse staff puts in a lot of overtime to handle and transport the goods to the consumer in a very short period of time. As can be expected, the period right after Tet is usually a quiet time for the consumer goods business and activity at the warehouse is scaled back to the usual routine. Glenn Rowel, Vietnam Country Head Contract Logistics
Air Freight is in the middle of its peak season
Before the long holiday export demand is surging resulting in a lack of flight capacity, higher rates and longer transit times than usual. To avoid delays our air freight team recommends to book in advance and at least one week prior to uplift days.
Customers must be aware that the airport terminal, airport customs and the airlines have very limited staff on duty during the Tet holidays. Right after Tet the airfreight operations will be back to normal again. However, because the factories need about a week to get back to operations, there is not much export demand the first week. Patrick Senn, Vietnam Country Head Air Freight
Ocean Freight: Expect equipment shortage and tight space to continue after the Tet holidays
Vietnamese ports and CFS port warehouses follow the government announcement to close for the Tet holiday during specific dates. The terminals however will continue to work 24/24 hours and are open for incoming vessels. The days before Tet, the ports work overtime and try to load all export cargo to meet the Container Yard (CY) cut off time and unload all import shipments in time for Tet.
Volume demand remains strong for pre-CNY holidays while equipment is improving slowly and space is tight till end of Jan and expecting to open for W5 & W6 during and the 1st week after Tet holidays. Therefore, equipment shortage and tight space are expected to continue after the Tet holidays (especially for Intra Asia trade lanes) and customers need to place bookings 3 or 4 weeks in advance as usual during this COVID-19 pandemic. Diem Hang, Doan, Vietnam Country Head Ocean Freight
Here are our TOP 6 tips to prepare for Tet in Vietnam
- Always plan ahead and make sure to add some additional days into the delivery timeline
- Always schedule enough time to get products shipped as booked
- Make sure you have a good trucking plan in place
- Try to book your shipments at least a week in advance
- Make sure your customs documentation, such as the customs sheet, is in order
- Be patient and communicate continuously with vendors/forwarders/carriers to make sure all shipping information is available to you and potential problems are quickly identified
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