RILA calls on Port of New York-New Jersey to take steps to reduce port productivity issues

Various cargo and port productivity issues have prompted the Retail Industry Leaders Association (RILA) to call on leadership at the Port of New York/New Jersey over disruptions occurring at the port which RILA Vice President, Government Affairs Kelly Kolb said in a letter to the port’s Executive Director Patrick J. Foye and Deputy Executive Director Deborah L. Grammiccioni have had damaging consequences on the delivery of retailers’ goods.

In the letter, Kolb explained that as the timing of the arrival of the post-Chinese New Year shipments approaches, retailers are concerned that “further disruptions will take place, resulting in lost sales, empty shelves, and disappointed customers.”

And she went on to say that while RILA acknowledges the Port of New York/New Jersey has experienced several weather-related issues that have temporarily closed terminals and slowed operations, the backlog of cargo has become unreasonable and should be considered an extremely serious matter to all those involved in operations at the port. Other issues cited by Kolb included: massive lines outside terminals resulting in slow turn times; shortage of chassis; failing technology at the terminals; lack of drivers; and the current shortage of port and terminal workers.

Although the port has put together a task force focused on overall port improvements, Kolb said that the task force is not due to recommend improvements until June, which RILA maintains is not soon enough to deal with these current issues.

“Considering the current impact that the port disruption is having on retailers’ supply chains, the situation needs to be alleviated immediately,” wrote Kolb. “Many of our members have already added additional lead time to get cargo to their distribution centers and stores. However, despite their efforts, retailers are still having difficulty meeting their due dates for product that is moving through the [port]. Meeting these deadlines is critical as seasonal goods are expected on store shelves for the upcoming spring season.”

To that point, RILA proposed multiple suggestions to get things moving in the right direction:
-Terminals should staff themselves for a complete two shift operation, at a minimum, including weekends and holidays until on-dock, gate, and rail operations return;
-Chassis inspections should be conducted in a safe and reasonable manner that does not place units “out of service” that are not an immediate hazard;
-The port should assign constant traffic oversight to mitigate the ripple effect of one terminal queue impacting others; and
-Fees that are attributable to the delays caused by the port’s challenges should be suspended until the port operations can return to normal

Paul Bingham, economics practice leader at CDM Smith, told LM he believes that this situation at the Port of New York/New Jersey echoes the problems caused by the terminal management software transition problem at Maher that goes back to last year, along with the issues with the chassis with the transition away from the carrier chassis fleets, adding that the manning levels is another factor as is the truck queue traffic management. 

“The Port Authority is not wrong to understand they need port community buy-in to address the productivity issues since they don’t control everything that matters, including terminal gate hours and the conditions and ownership of chassis,” said Bingham.  “The task force is the mechanism they’ve set up for this but I acknowledge frustration on the part of the shippers, such as the retailers, in how long that process will take to result in improvements.” 

And last year when cargo was diverted from Maher Terminals and the terminal management software transition didn’t go well, Bingham explained that was the carriers deciding to do that on ship call basis, not the shippers driving those decisions. 

“This now is different with the retailers, not the carriers, complaining directly and warning of consequences to come later this year,” he said. “As monthly volumes increase later in the year, the implication is that if there are performance problems with current slow-season volumes, the risk of greater disruption with higher TEU volumes later in the year may have more serious consequences for shippers.”

What’s more, with reports of U.S. importers making contingency plans to reduce the risk from potential west coast port disruption later this year with the ILWU coastwise contract expiration, Bingham said it is reasonable to expect importers to also take steps to reduce the risk from further problems at the Port of New York and New Jersey, which may also involve arranging for capacity on services calling other ports this year. 

“That is not good news for PANYNJ but is the implication from a sustained inability to have the port terminal congestion alleviated to the satisfaction of the shippers,” he said.