The Port of New York and New Jersey has been hit this summer by what one executive calls a “perfect storm” of labor shortages, computer glitches, and new trucking regulations.
The situation has gotten so bad that the German container shipping company Hapag-Lloyd suggested its customers route cargo through other ports.
“We are experiencing severe congestion throughout the port of New York,” Hapag-Lloyd told customers in a memorandum dated July 26.
“Both local and rail cargo are affected. In efforts to minimize commercial exposure to NY/NJ and restore our service to our customers, we strongly suggest, rerouting cargo whenever possible,” the carrier said. It suggested shippers consider alternative ports such as Montreal, Halifax, Norfolk, Baltimore and Savannah.
"We continue to work diligently with all marine terminals, rail service
providers, partner lines, port authority, however, we do not expect
normal service to be restored until approximately middle of September 2013," Hapag-Lloyd said.
John Nardi, president of the New York Shipping Association (NYSA), noted "in preparation for larger vessels and future growth, our employer members are implementing systems and processes to improve throughput and productivity. This implementation has further strained an already tight labor situation. NYSA and our employer members have already quantified the labor demand created by pending retirements and attrition. We will begin to bolster our labor force in the very near future. We know it can't come soon enough and are doing everything to expedite the process."
Beverly Fedorko, a NYSA spokesman, said the port often faces a seasonal labor shortage in the summer when longshoremen take vacation. That has been aggravated this year by the fact that some longshoremen are working longer than normal hours because terminals are staying open longer.
NYSA is in preliminary discussions with the Waterfront Commission of New York Harbor about adding workers. The commission must approve requests to allow more workers on the New York docks.
Maher Terminal, in particular, has been snarled and had to divert ships to other container terminals in the port because of problems installing new software from Navis.
Maher and Navis both issued a statement, saying "the implementation of the new operating systems at Maher’s Elizabeth, N.J. facility has turned the corner, as service has returned to acceptable levels during the past several weeks, albeit at reduced volume.
“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,” the companies said.
But for weeks, Maher has been diverting ships to other terminals, including two that are scheduled to work at New York Container Terminal and Port Newark Container Terminal tomorrow. That's created demand for chassis and equipment at other terminals and helped increase congestion.
Jeff Bader, president of trucking company Golden Carriers and the Association of Bi-State Motor Carriers, agreed there was a problem in the port due to volume and labor shortages, but thought Hapag-Lloyd’s letter ignored the fact that when the liner carrier had its own problems in the port “people have worked with them.”
“For them to basically say, 'don’t use the Port of New York' - it’s very disrespectful and a slap in the face to everybody who services and works hard in the Port of New York in every industry. I would hope to think that next time when people have a choice between different steamship lines that call on the Port of New York, if they can avoid using Hapag-Lloyd, perhaps that’s the best thing to do,” Bader said.
He added things are not getting better in the port—“it’s still very, very tough. The lines are extremely long, there is extensive amounts of detention times and the hour of service regulations are killing us with four and five and six hour turn times at the terminals.” He said there are chassis shortages, equipment shortages, lack of productivity, and labor shortages.
“The Maher situation amplified it and happened at one of the most critical times,” Bader said. “You have the perfect storm going on with the terminals.”
Maher and Navis said "after extensive testing and root cause analysis by all of the stakeholders along with important feedback from ILA users of the system, it was determined that the real-time interactions between the various system components deployed in the container yard were not operating as designed. Thanks to the extensive commitment of around-the-clock resources from Navis, Maher, and its IT partners, a modified plan has been successfully implemented. That modified plan has scaled back select automated components of the overall solution and stabilized core functionality. Maher and other system providers will phase-in those retracted automated components on a controlled basis."
"We are confident that our modified plan is the right strategy for a permanent return to the volume and service levels our customers expect from Maher Terminals, said Gary Cross, Maher Terminals president and chief executive officer. - Chris Dupin