From Labor Day in China to logistics costs in Mexico

The Labor Day holiday in China, celebrated from May 1st to 5th, presents a logistical challenge for international trade due to the temporary closure of its main economic engines. This period results in a three- to five-day pause in factories and ports, disrupting the flow of goods to key markets such as Mexico . The holiday is not an isolated event, but rather a phenomenon that overwhelms the operational infrastructure in cities like Shanghai, Ningbo, and Shenzhen.

In an interview with T21, Arturo Gómez Marín, senior manager of Customs and Foreign Trade at CGA Customs Consulting , explained the magnitude of the problem in the global supply chain .

“ Both the available space in China and the use and availability of containers are beginning to experience significant saturation, because if we look at it as a chain, there is already a demand for ships and containers. So, with this overdemand and the resulting shortage, you start to see an effect with the increase in maritime freight costs; then you begin to see a bottleneck generated by this saturation in Chinese ports,” he noted.

In Mexico, the five-day shutdown of these three Chinese ports directly impacts the customs offices in Manzanillo, Colima, and Lázaro Cárdenas, Michoacán , which could face bottlenecks, as delays could extend up to 15 days within the country. As a result, storage and demurrage costs increase.

“For an importer, an operator in Mexico could have an impact of up to 30 percent. Because remember that you’re dealing with the increased freight costs in China, and you’re also paying for additional handling at Mexican ports. So, you’re already seeing a significant increase,” he indicated.

The situation is further complicated by geopolitical factors, Gómez explained, such as conflicts in the Middle East and the Strait of Hormuz , which limit the supply of raw materials. This scarcity forces buyers to seek inputs in other regions at higher prices to avoid complete production shutdowns. The combination of holidays and geopolitical crises creates a highly uncertain scenario for importers and affects certain sectors more than others, such as the automotive industry.

“There are materials that are needed for production, and it’s more expensive not to have them than to pay those extra costs (…) the automotive industry, of course, a plant shutdown is very costly. I think the chemical industry, because shutting down a reactor is also very complex. I believe they would be absorbing the extra costs,” he warned.

For sectors involving finished goods, such as textiles, footwear, or toys, the recommendation is usually to wait for logistics to stabilize after the holidays . However, any decision must be accompanied by sound planning to avoid compromising operations. “I believe that right now the supply chain needs to be strategic,” Gómez emphasized.

Recommendations for importers

Both Gómez and Jocelyn Martínez, senior import contracts analyst at Eternity Group Mexico , shared a series of recommendations with T21 to mitigate the impact of the holiday and ensure the continuity of business operations:

Anticipation: Plan shipments, make bookings and shipping arrangements at least four weeks in advance of the start of the holiday and confirm itineraries.
Document management: Request documents such as certificates of origin or invoice corrections well in advance of the closure of administrative offices in China. Also, ensure that commercial invoices, packing lists , and certificates are ready before closing time.
Safety stock: Maintain a reserve stock that covers an additional two to four weeks of regular demand to avoid shortages.
Direct routes: Avoid services with transshipments, as the risk of cargo being stranded in intermediate ports increases during the reorganization of shipping lines’ schedules.
Plan B: Explore alternative ports and shipping companies to diversify entry options.
Direct communication: Confirm with suppliers the actual dates of closure and restart of operations at 100%, as many factories extend their breaks beyond the official days.