The container shipping industry is bracing for further disruptions to global supply chains ahead of the Lunar New Year holiday and Beijing Winter Olympics, which are expected to lead to factory closures for an extended period in China. According to a recent Container xChange survey of forwarders and shippers, more than half of the respondents expected the Lunar New Year holiday – from January 31 to February 6 this year – to make the ocean supply chain “even worse”. And most said the holiday would result in delayed transit times and fewer available containers. While the Lunar New Year shocks are an annual occurrence, they are being compounded this year by the already-disrupted global shipping network, as well as by China’s insistence on maintaining a zero-tolerance approach to the coronavirus even as more transmissible variants have emerged. “Predicting the impact of the Chinese New Year holiday in 2022 is rather more difficult than in previous years because China’s policies on internal travel are rather opaque,” said Johannes Schlingmeier, co-founder and CEO of Container xChange. To prevent the spread of the virus, local authorities throughout the country have been urging residents to avoid “unnecessary” trips to their hometowns over the holiday. The start of the Beijing Winter Olympics in early February, and the possibility of power cuts , is further clouding the ability of manufacturers to predict output levels, Schlingmeier added. “There are a lot of uncertainties over the next few months,” he said. According to the survey, two-thirds of shippers and forwarders expected output from Chinese manufacturers to decline significantly next month, and they were planning ahead by placing orders earlier. How China’s shipping industry has an impact on supply chains “This is no doubt a factor in some of the spot-freight-rate increases out of China we have seen in January,” Schlingmeier said. The freight rate for a 40-foot container from Asia to the US west coast increased 2 per cent to US$15,485 this week, compared with last week, according to the Freightos Baltic Index. That put the rate 255 per cent higher than the same time last year. “With the Lunar New Year holiday about to begin, rates will most likely stay level for the next couple weeks,” said Judah Levine, head of research at Freightos. Port congestions and supply-chain delays at Chinese ports have worsened in recent weeks due to strict coronavirus prevention measures, Levine said. “Supply-chain delays and Covid restrictions combined to slow operations at Yantian this week. Delayed arrivals have left exports piling up in the container yard,” he said. “As a result, exports are now allowed at the port only a few days before departure, while testing requirements have slowed trucking operations. “Similar restrictions on drivers are contributing to congestion in Tianjin , with growing delays reported in Shanghai and Dalian as well.” The transit time from Chinese ports to the US west coast has continued to be “spectacularly high” this year, mainly due to berthing delays at the US ports, according to Shifl, a digital freight forwarding platform. After 2021 brought China record trade, what’s in store for 2022? The transit time now is around 44 days – a far cry from the pre-pandemic norm of 16 days, Shifl’s data showed. Peter Tirschwell, vice-president of maritime and trade at IHS Markit, expects global supply chains to remain disrupted well into 2022, with no guarantee of a quick return to pre-pandemic levels, at least in the first half of the year. “New disruptions … in China ahead of the approaching Chinese New Year and Winter Olympics could further disrupt the system and further delay a return to normal container flow,” Tirschwell said in a report this month, pointing specifically to the impact of port and factory closures. “A recurring problem since the pandemic [began] is that the system does not have time to recover before the next shock hits.”