Technology-related issues at Port Authority New York New Jersey may be on the mend
August 05, 2013
Citing the ongoing congestion issues at the Port of New York and New Jersey in recent weeks, which has significantly slowed down cargo operations at the port, National Retail Federation President and CEO Matthew Shay last week penned a letter to leadership at the Port Authority of New York and New Jersey and the New York Shipping Association, regarding the situation, which stems from the recent rollout of new computer processes by Maher Terminals, the port’s operating manager.
The computer system, which was introduced at the port earlier this summer by Maher and Navis, a global provider of cargo terminal operating services, has been experiencing what the companies said in a joint statement are some “unexpected issues,” which have led to delays that they expect to be temporary while they work on resolving the related technical issues, adding that “noticeable improvements are already being realized as users adjust to new systems and processes.”
A Wall Street Journal report explained that the new systems was intended to improve cargo routing from trucks to trains and help terminal operators track containers and allow longshoremen to locate them to load onto trucks. But there was a significant snag in that certain parts of the system regarding real-time interactions between the various system components deployed in the container yard were not operating as designed, according to the joint release from Maher and Navis.
In his letter to Patrick Foye, executive director, Port Authority New York and New Jersey, and John Nardi, president, New York Shipping Association, the NRF’s Shay urged the port authority to work with the terminal operators to help alleviate and resolve the problems before they get worse.
“NRF has heard from a number of its members about the negative economic impact this is having on their supply chains and their business partners,” wrote Shay. “As we enter the eighth week of cargo delays, it is critical that the current congestion issues are resolved now before the peak shipping season begins. NRF members have experienced significant delays within their supply chains. The delays are impacting both import and export containers. The economic costs from the delays not only include increased transportation and storage costs, but opportunity costs from lost sales for products that were scheduled to be on store shelves.”
Some examples of the issues NRF member retail shippers have experienced, cited by Shay in his letter, include:
-one medium-sized retailer has had no fewer than 1.6M units across 46 containers on 10
vessels for key Back to School deliveries delayed from 1-3 weeks;
-one apparel retailer noted that they have seasonal product valued at $8,000,000 that will
be 10 days past due for floor sets. They will also incur incremental expedited shipping
costs to make up the time.
-a retailer noted that they have 21 containers that are currently stuck at the port and an additional 35 that are about to arrive. Each of these containers is valued at $2,000,000. Current performance at the terminals will result in the retailer missing important due dates;
-numerous retailers have noted that their trucking partners have noted that they have had
to wait some times as long as 6 hours before they can enter the terminal gate to retrieve
cargo. This has a significant impact on the drivers who now have to comply with more
rigorous Drivers Hours of Service requirements; and
-a retailer noted that most drayage operators are now charging an additional $65 per
container for the additional wait time. This trans
lates to about $6,000 per week for this retailer. When compared to NRF Port Tracker information, that will be an additional $8,000,000 a month in these charges alone for the industry.
Shay added that with Peak Season here, it is critical that the port authority and terminal operators do everything they can to not only alleviate the current congestion problems, but resolve the issue before shipments significantly increase.
“This is a critical time for the retail industry as holiday merchandise for some retailers is on the store floor as early as August,” he wrote. “This is especially true for the end of the Back-to-School season. We cannot afford to continue to see these delays and resulting increased costs continue. This not only hurts the retail industry, but our transportation partners as well. We urge the Port Authority and the Terminal Operators to work closely with all of the stakeholders, including the beneficial cargo owners and the harbor drayage truckers, to immediately find work on effective solutions to solve the current situation. At a minimum, the Terminal Operators should offer additional free time, including the [last] weekend, in order to help clear out the backlog. If the situation does not improve, retailers will have no other option but to look for alternative gateways to bring in their products. We have heard from some NRF members who have already diverted some cargo to avoid the current situation.”
In light of the myriad issues highlighted by the NRF’s Shay, Navis and Maher said on July 31 that the implementation of the new operating services have “turned the corner” with service returning to acceptable levels at reduced volume, adding that barring any unforeseen circumstances, this steady progress has now put the terminal in a position to handle all of its business and transition to normalized operations.
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