COLORADO, USA — The Lunar New Year has the potential to worsen an already strained supply chain. The holiday begins Feb. 1 and is the most celebrated tradition in China.
Businesses shut down for at least a week, some close even longer.
"The impact that that has on supply chain is significant because so many things are manufactured in China," Jack Buffington the director of the Colorado University supply chain program told 9NEWS. "On top of that, you have increasing positivity cases in China and so this just creates an enormous bunch of questions of what the supply chain is going to look like."
Local small business owner Cayden Nigh got a glimpse of that impact last year. Nigh owns House of Nigh, an online clothing company. Previously he attempted to work with manufactures around the Lunar New Year.
"That was really rough," he recalled. "That was around 1-2 years to get a product out."
While Nigh moved on to manufacturers in London and Canada he is still dealing with extreme wait times.
"From London, the shipping is also kind of a nightmare as far as the production as well so everything has gone from like a 3-4 month turnover rate to six months to a year in some cases," he explained.
"It’s tough in a sense because I kind of feel like I’m letting people down. Fans of the brand are waiting to see this product and I’m waiting to see it."
While Nigh waits he is putting his effort into projects he can have a little more control of. Buffington said time will tell how much of an impact the holiday has and added there were plenty of other factors currently impacting it.
"Right now, the supply chain is carrying more inventory because you carry more inventory to mitigate volatility, but the problem with carrying more inventory is you carry more costs," he said.
"People aren’t traveling, so instead of experiencing and doing services, going on trips they’re buying more things. So the balance between import and export between us and the rest of the world has increased. So not only is there challenges with supply, but there’s also an increase in demand so it’s a really difficult spot," Buffington added.
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