European and U.S. businesses feel the effects of Lunar New Year long before the fireworks begin. The real start is quieter — a production plan that suddenly tightens, a supplier who stops taking new orders, a freight booking that becomes strangely hard to secure.
For any business that buys, makes or sells at scale, Lunar New Year isn’t a regional holiday. It’s a global operational event. And it exposes the gap between organizations that plan early and those that rely on late heroics.
The pattern is predictable, which is precisely why it hurts when it catches you off guard. As factories across Asia wind down, shelves in retailers can empty quickly, particularly in high-turnover categories like apparel, electronics, toys and homeware. Private label ranges often take the brunt because they’re less flexible and less protected when capacity gets tight.
This pressure creates a familiar behavior: panic buying. Teams pull orders forward, overcorrect to avoid stockouts, then pay for it later in excess stock, markdowns and a promotional calendar that no longer fits. Add extended lead times and an early Easter, squeezing promotional windows, and suddenly “good enough” forecasting looks expensive.
Strategically, the Lunar New Year has become the annual stress test for supply chain maturity. Those with strong planning, visibility and supplier engagement glide through it. Everyone else scrambles, pays more and still gets the awkward internal questions: Why didn’t we see this coming?
Nearshoring doesn’t offer a free pass either. Many manufactured products still rely on Asian components, even when final assembly moves closer to home. And, as supply chains spread further into Vietnam, Malaysia, India and beyond, disruption becomes multi-country and harder to predict.
What makes this season different is that it’s both predictable and variable. Predictable in its timing and broad shape. Variable in where the pinch points show up, which suppliers lose labor, and which lanes get jammed first.
One of Asia’s most significant holidays, Lunar New Year creates large and predictable slowdowns in global supply chains each year. Its impact can be felt weeks before and after the official dates, as people travel, businesses wind down and capacity tightens across factories, ports and inland transport.
While the impact is predictable, organizations must navigate intricate country nuances which determine when and where pinch points arise. For example, large-scale factory slowdowns and shutdowns in China lead to a significant fall in output both pre- and post-Lunar New Year celebrations. This predominantly impacts electronics, machinery, consumer goods and automotive parts.
Elsewhere across Southeast Asia, factory shutdowns in Taiwan have a disproportionate effect on global semiconductor production, impacting downstream supply chains across electronics, automotive chips and industrial technologies. Meanwhile, shutdowns in Korea have a particular impact on the global supply of batteries.
There are also cultural nuances for firms to consider. For example, while factory closures can run longer in Vietnam, impacting supply of textiles and consumer goods, official holidays in Singapore and Malaysia are often shorter than the regional average. Varying shutdown lengths can dramatically impact exposure to disruption, but understanding these nuances requires significant forward-planning and communication with suppliers.
The U.S. adds an extra layer of uncertainty this year. From an American perspective, one of the biggest unknowns in the runup to the Lunar New Year shutdown has been how the Supreme Court would rule on President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs.
A ruling against the President would cause orders to surge, as importers strive to get as many containers moving as possible before the shutdown. That would tighten capacity and push rates up in the short term. It’s expected that the Administration would continue to impose tariffs under other statutes, but how quickly they get re-implemented is unknown. Otherwise, we’ll likely see a typical spike in orders placed before the shutdown to maintain supply continuity. Either way, uncertainty isn’t neutral; it changes ordering behavior, which in turn changes freight behavior, which in turn changes your costs.
Here’s what supply chain leaders should be doing now:
Treat Lunar New Year like a fixed commercial milestone, not a seasonal inconvenience. Build it into demand planning, supplier capacity conversations and delivery commitments as standard.
Push decisions earlier, with confidence. The teams that win are those that commit earlier with better information, not the ones that keep options open until the market removes them.
Stay close to suppliers. Great forecasts still fail if you’re blind to factory labor, component constraints and cut-off dates.
For omnichannel businesses that need precision and pace, Lunar New Year isn’t just a holiday. It’s a reminder that agility is now a competitive advantage. The winners are the ones who have forecasted well, planned early and kept close to their suppliers. They get to sit back while everyone else dashes around trying to fill shelves.
Spencer Shute is vice president at Proxima.