In this article, learn about:
The timing and impact of Chinese Lunar New Year on production
Strategies for mitigating the impact of Chinese Lunar New Year
How to recover from the holiday’s aftermath
Every year, Chinese Lunar New Year results in one of the most disruptive, yet predictable, periods in global manufacturing and logistics. Depending on the region, factories shut down for one to four weeks, and many workers travel long distances to return home, creating extended labor shortages even after production facilities reopen. The result is a sharp slowdown in production capacity as unfulfilled orders begin stacking up.
These shutdowns also ripple throughout the supply chain, creating backlogs, congestion at ports, and increased prices. For companies that rely on Chinese manufacturing, the impact is unavoidable — but the risk is manageable with the right preparation.
Understanding the Impact of Chinese Lunar New Year Shutdowns
Chinese Lunar New Year usually causes a cascading series of disruptions across China’s manufacturing sector, and 2026 is no exception.
In 2026, Chinese Lunar New Year eve falls on February 16, with Chinese New Year’s Day on February 17. The holiday period extends through the Lantern Festival on March 3. Even if you’veplanned around this before, it’s important to note that the 2026 holiday falls 19 days later than in 2025 — shifting all production and logistics planning later into Q1 and compressing schedules for spring and early-summer inventory.
During this holiday window, manufacturing facilities typically shut down entirely. This can last for one to four weeks depending on the region and workforce composition. The decrease in capacity creates backlogged bookings for both ocean and air freight. Ports and inland hubs often experience congestion, shortages, and increased lead times.
While Chinese Lunar New Year creates the largest and most predictable impact, other public holidays also affect production and shipping. In 2026, China observes:
New Year’s Day (January 1)
Qingming, also known as Tomb Sweeping Day (April 5)
Labor Day (May 1)
Dragon Boat Festival (June 19)
Mid-Autumn Festival (September 25) National Day (October 1)
How to Build a Resilient Plan for Chinese Lunar New Year
The most effective way to manage the Chinese Lunar New Year disruption is to shift from reactive scheduling to proactive, long-term planning. A forward-looking production plan should anticipate reduced capacity, extended lead times, and compressed shipping windows well before factories begin winding down.
Create a Forward-Looking Production Plan
China accounts for roughly 30% of worldwide manufacturing. As a result, Chinese Lunar New Year planning succeeds or fails at the production level. Teams that lock in decisions early are far better positioned to secure capacity, avoid rushed orders, and keep critical items moving despite reduced factory output.
Here are some best practices for preparing your production for Chinese Lunar New Year:
Begin Annual Planning 3-5 Months in Advance
To account for shortened production calendars and extended lead times, planning should be started three to five months ahead of the Chinese Lunar New Year. Adjust demand forecasts for Q1 and early Q2 based on historical holiday impact and communicate volume expectations to suppliers early. Early visibility allows factories to plan labor and materials before capacity tightens.
Confirm Supplier Capacity
Each factory follows its own timeline leading into the holiday. Request production schedules in writing, including shutdown dates, expected restart timing, and workforce availability. Identifyfinal production windows and last ship dates for each supplier to prevent late purchase orders from missing deadlines.
Allocate Capacity for Critical Stock-Keeping Units (SKUs)
As capacity becomes constrained, some products take on greater importance than others. Use an ABC-based prioritization or similar framework to identify high-revenue, high-risk, or customer-critical SKUs.
ABC prioritization is a simple way to rank products by business impact, so limited resources are used where they matter most.
A items: The most critical SKUs. Typically, A items are the highest revenue drivers, customer-committed products, or items with long lead times and low substitution options. These receive first priority for production and capacity allocation.
B items: Moderately important SKUs with steady demand and some flexibility. These are produced once A items are secured.
C items: Low-impact or low-volume SKUs that can tolerate delays, consolidation, or temporary pauses without significant business risk.
Allocate available production capacity to A items first, and adjust, defer, or consolidate lower-priority SKUs to reduce strain on factories during the pre-holiday period.
Optimize Inventory Strategy
If optimized correctly, inventory can become a primary buffer against disruption. A well-planned inventory strategy can help maintain service levels while mitigating extended lead times and uneven factory restarts.
Increase Safety Stock for Critical SKUs
Use historical product performance around Chinese Lunar New Year to determine where safety stock increases are warranted. Rather than permanently raising inventory levels, it’s best practice to build a temporary buffer designed specifically to cover the holiday disruption window and normalize once operations stabilize.
Position Inventory Where It’s Most Needed
To reduce the impact of transportation disruptions, strategically position inventory closer to demand. This may include staging product at regional distribution centers or leveraging 3PL partners in key markets. Forward-positioning inventory improves responsiveness and reduces risk if transportation experiences delays.
Evaluate Alternative Production Windows
Where possible, shift production earlier into late Q4 to allow finished goods to ship before Chinese Lunar New Year capacity constraints emerge. Select purchase orders to move to alternate factories or regions to maintain supply continuity and reduce dependency on a single production source.
Post Chinese Lunar New Year Recovery
Chinese Lunar New Year disruption does not end when factories reopen. The post-holiday recovery period often determines whether early planning efforts fully pay off or whether delays continue to ripple through the supply chain.
Monitor Supplier Ramp-Up Speed
Track how quickly suppliers return to full production capacity after the holiday. Labor return rates vary widely by region and factory, so rely on daily or weekly production updates rather than assumed restart timelines. Early visibility into this performance allows teams to adjust expectations before small delays compound.
Adjust Lead Times
Once production resumes, compare planned output against actual performance to identify deviations caused by labor shortages, material gaps, or lingering congestion. This step is critical for avoiding overly optimistic scheduling in the weeks immediately following the holiday.
Rebalance Inventory and Adjust Forecasts
Use real production and shipment data from the recovery period to update forecasts and inventory targets. As factories stabilize, realign replenishment cycles and gradually normalize safety stock levels to reflect actual capacity rather than pre-holiday assumptions.
The Takeaway
With proper planning, Chinese Lunar New Year disruptions are manageable for any business. Supply chain teams that plan several months in advance, confirm supplier timelines early, and deliberately prioritize production and inventory are far better positioned to maintain service levels throughout the holiday period.
The most effective Chinese Lunar New Year strategies combine early production planning with targeted inventory buffers and disciplined post-holiday follow-through. By treating Chinese Lunar New Year as a fixed annual planning milestone — not an exception — organizations can reduce risk, control costs, and turn a recurring disruption into a manageable part of their operating calendar.
Navigate Holiday Complexities with SPS Commerce
Chinese Lunar New Year disruptions are predictable but managing them at scale is still complex and resource-intensive. SPS Commerce helps teams plan production earlier, align suppliers, and maintain visibility across orders and shipments—so seasonal shutdowns don’t turn into prolonged service failures. With SPS, supply chain teams can reduce risk, improve coordination, and keep product moving through even the most disruptive periods. With SPS, supply chain teams can reduce risk, improve coordination, and keep product moving through even the most disruptive periods.
