Wednesday, August 21, 2013

The Low Down on the Slowdown

Long hot summer for Port of New York-New Jersey as congestion delays continue.

Remember when you installed a new operating system on your computer, and it messed you up for days on end?

Now imagine that your PC runs the largest port on the East Coast. That is essentially the situation in which the Port of New York and New Jersey has been stuck this summer. Maher Terminals adopted Navis 4, a new operating platform, for its cargo operations, and chaos ensued – a costly, frustrating series of delays that has spread throughout the port, and caused a ripple effect up and down the Atlantic seaboard.

Almost every day since June, at least one or two container terminals have been clogged with lines of trucks that sometimes have stretched two miles or more. Once a busy container terminal falls behind, it’s difficult to catch up. Think of it this way: If congestion allows a terminal to handle only 25 percent of its workload on Monday, it must do 175 percent on Tuesday to stay even. The longer the sub-par productivity continues, the more daunting the arithmetic.

The math isn’t good for those using the port, either. Ocean carriers are imposing demurrage charges for overdue shipping containers, drayage companies are having to pay extra to drivers idling in lines, and adding congestion charges to customers’ bills. In July, container line Hapag-Lloyd advised shippers to reroute cargo to other ports until the backlog in New York-New Jersey abates.

The port is counting on the return of vacationing longshoremen and integration of Maher’s new system to alleviate the problem, but retailers are already nervous about the situation as the peak holiday shipping period approaches. Matthew Shay, president of the National Retail Federation, sent a letter to port authorities, spelling out the merchants’ concerns.

Don’t count NY-NJ out. The port bounced back after Hurricane Sandy, and has a new six-year labor contract in place. But it goes to show, you never know where the next headache will come from. You want your data backed up, but not your shipments.

Kirk Shearer
800-989-0054 x103

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