How Does Chinese New Year 2025 Affect Shipping, Factory Closures, and Dropshipping? A Guide for E-Commerce Sellers

If your business relies on suppliers in China and you’re not preparing for Chinese New Year (CNY) 2025, you could be in for a costly surprise. Unlike holidays in Western countries, where businesses may close for a day or two, CNY brings factory operations, supplier communication, and shipping logistics to a near standstill for weeks. For instance, many new sellers and brands often assume they can place an order in late January and get it shipped out as usual, only to realize that their suppliers have shut down, warehouses are empty, and customer orders are stuck in limbo.

When is Chinese New Year 2025?

CNY 2025 begins on January 29 and runs through February 12, but its impact starts much earlier. Many factory workers leave as early as mid-January to travel home, leading to production slowdowns even before the official holiday.

The shutdown itself typically lasts two to four weeks, and once factories reopen, they often struggle with labor shortages as many workers don’t return. Even ports and customs operate with minimal staff, prioritizing perishable and essential goods over regular shipments. This means production delays, longer lead times, and inventory bottlenecks that can stretch well into March.

Do Factories Shut Down for Chinese New Year?

Yes, factories in China shut down for Chinese New Year, causing significant disruptions to production and supply chains. The slowdown begins in mid-January as workers start leaving early to travel home. By January 28, 2025, most factories will be completely closed, and production will not resume for at least two to four weeks.

Even after reopening, operations do not return to full capacity immediately. Many workers do not return, leading to labor shortages and delays in fulfilling backlogged orders. Quality control can also be an issue as factories rush to meet pent-up demand with a less experienced workforce.

Shipping and logistics are equally affected. Ports and customs operate with minimal staff, prioritizing perishable and high-priority goods over regular shipments. This leads to longer processing times and extended delivery windows for international orders. Brands that do not account for these delays risk stockouts and supply chain bottlenecks well into late February or early March.

How Does Chinese New Year Affect Shipping?

The Chinese New Year impact on shipping in 2025 will be more severe than in previous years, causing extensive delays and higher costs for businesses worldwide. With factory closures across China, production halts for weeks, leading to significant export backlogs and inventory shortages.

And while Chinese New Year alone is enough to disrupt global supply chains, the situation is even more complicated due to the Red Sea crisis. Since late 2023, repeated attacks on cargo vessels navigating this vital shipping route—responsible for 15% of global trade, including 8% of the world’s oil and grain—have forced many shipping lines to reroute their vessels around the Cape of Good Hope, South Africa. This diversion adds approximately 12 extra days to transit times, compounding the delays caused by factory shutdowns during CNY.

Chinese New Year significantly impacts dropshipping businesses, especially those reliant on suppliers in China. With factories, warehouses, and logistics companies shutting down for at least two weeks, production and fulfillment come to a halt, causing long delays in processing and shipping orders. These disruptions begin even before the holiday, as many factories close 10–14 days in advance to allow workers to travel home. After CNY, the slow return of the workforce leads to further delays, creating a backlog in production and shipping.

Logistics also take a hit during this period. As businesses rush to ship orders before the holiday, ports and freight companies become congested, while couriers such as ePacket, China Post, and DHL operate at reduced capacity, leading to prolonged delivery times. Once factories reopen, they prioritize bulk orders from larger clients, leaving smaller dropshipping businesses struggling to restock. On top of this, many suppliers and agents take extended holidays, making it difficult to get updates on inventory and order fulfillment. This communication blackout adds another layer of uncertainty, as customer support teams are often unavailable.

The ripple effects of these disruptions can be severe. Inventory shortages prevent dropshippers from fulfilling orders promptly, and without clear communication, customers grow frustrated with long wait times. Those who fail to inform buyers about potential delays often face an increase in complaints, chargebacks, and refund requests, which can damage their store’s reputation and hurt long-term revenue.

To minimize these challenges, dropshippers must plan ahead. One of the best strategies is to stock up on inventory at least one to two months before CNY to ensure fulfillment before the shutdown. Working with suppliers who maintain stock in overseas warehouses, such as those in the U.S. or Europe, can also help mitigate delays. Diversifying suppliers by sourcing from other countries, like Vietnam, India, or Turkey, provides an added layer of protection. Some Chinese suppliers operate with pre-stocked inventory in fulfillment centers like CJ Dropshipping or third-party logistics (3PL) warehouses, which can continue limited operations during the holiday.

Transparent communication with customers is crucial during this period. Dropshippers should update estimated delivery times on product pages, send email notifications, and add banners on their websites to inform buyers about potential delays. It’s also wise to adjust marketing strategies by scaling down ad spending on products reliant on Chinese suppliers and, if possible, shifting focus to digital products, print-on-demand items, or services that do not require physical shipping.

Even after CNY ends, dropshippers should anticipate a slow return to normal operations. It can take anywhere from two to four weeks for factories to fully resume production, so maintaining regular contact with suppliers for updates on stock levels and lead times is essential. By taking proactive steps and preparing in advance, dropshipping businesses can minimize disruptions, maintain customer satisfaction, and ensure a smoother transition through the annual supply chain challenges caused by Chinese New Year.

Strategies to Avoid Disruptions for E-commerce and Dropshipping Sellers

1. Strategic Inventory Management

Proper inventory planning is critical to navigating disruptions caused by Chinese New Year. To maintain consistent order fulfillment, you need to increase stock levels well ahead of mid-January, ensuring you have enough inventory to cover the holiday period and the slower recovery phase. However, overstocking can tie up capital and lead to higher storage costs, so precise forecasting is essential.

Leverage inventory optimization tools to analyze historical sales data and predict demand accurately. These tools can help balance supply needs against anticipated demand, reducing the risk of over-ordering or stockouts.

Expect a slower post-CNY recovery due to labor shortages and production backlogs. Many factories face delays in ramping up operations, which can further extend lead times. Proper planning ensures your business remains agile and avoids running into logistical bottlenecks during this period.

2. Diversify the Supplier Base & Shipping Routes

Reducing reliance on a single supplier or region is key to minimizing disruptions during Chinese New Year. Working with multiple suppliers ensures your business has alternative options if one supplier experiences delays or shutdowns. Expanding your supplier network to include regions like Vietnam, India, Turkey, or Mexico can help maintain continuity in production and fulfillment.

In addition to diversifying suppliers, it’s crucial to plan alternative shipping routes to avoid disruptions like those caused by the Red Sea crisis. Rerouted shipments around the Horn of Africa are increasing transit times and costs, so working with logistics partners to identify faster or more reliable shipping options can help mitigate delays and maintain consistent delivery schedules.

3. Managing Supply Chain Disruptions During CNY

Consider sourcing from suppliers outside of China or working with third-party fulfillment centers to maintain order fulfillment during factory shutdowns. Diversifying your supplier base and securing alternative inventory sources can help keep products moving even when Chinese-based manufacturers are unavailable.

Clear communication with customers is essential. Set realistic expectations for shipping delays by updating product pages, sending email notifications, and including estimated delivery times at checkout. Transparency helps prevent dissatisfaction, reducing the risk of chargebacks, refunds, and negative reviews.

To avoid unnecessary ad spend and poor customer experiences, pause marketing campaigns for products that are out of stock or likely to face extended delays. This prevents generating demand for items that cannot be fulfilled promptly, helping to maintain operational efficiency and customer satisfaction during this critical period.

4. Implement a Quality Management Plan

After Chinese New Year, factories often rush to catch up on backlogged orders, which may result in higher defect rates due to hasty production and less experienced workers. This makes it critical to have a strict quality control process in place before accepting bulk shipments.

Conduct thorough inspections to ensure that products meet your quality standards and avoid delivering faulty goods to customers. If you’re unable to oversee inspections directly, consider using third-party quality assurance services. These services can help identify defects early, minimizing the risk of costly returns, refunds, and damage to your brand’s reputation.

5. Strengthen Your Partnership With Your Suppliers

Developing solid relationships with your Chinese suppliers is crucial when dealing with the disruptions of Chinese New Year. Chinese business culture, nurturing guanxi, or the importance of mutual trust and reciprocal support, can significantly improve collaboration during challenging times. For instance, you can send holiday greetings or express your appreciation to help enhance your standing with key suppliers. Besides proper etiquette, this establishes a positive rapport with your suppliers, which can help secure better service, gain priority on orders, and receive timely updates during periods of high demand.

Key Takeaways

The annual Chinese New Year factories’ shutting down and resulting shipping delays present significant challenges for businesses, but proactive planning can make all the difference. In 2025, these disruptions are further amplified by the Red Sea crisis, which is increasing transit times and shipping costs. To navigate this complex period, businesses must adapt their sourcing and logistics strategies to maintain operational stability and meet customer expectations.

Key next steps include:

• Auditing your inventory now and placing orders early to account for production and shipping slowdowns.
• Diversifying your supplier base to reduce reliance on China and create alternative fulfillment pathways.
• Strengthening quality control processes to ensure that rushed post-CNY production doesn’t lead to defective products.

These disruptions may feel overwhelming, especially if you’re managing them for the first time, but with the right preparation, you can turn this challenge into an opportunity to strengthen your business operations.

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