Computer Problems Cost Port of NY & NJ and Shippers

“It was a nightmare. It was a horror show.”

The above words are from Jeff Bader, president of the Association of Bi-State Motor Carriers trade group as quoted by Bloomberg News on NJ.com in regards to trucks waiting four to six hours for routine jobs that should have only taken about an hour at the Port of New York and New Jersey.
The irony of the situation is Maher Terminals rolled out a new terminal operating system from Navis to increase efficiency at the Port of New York and New Jersey, instead the result was cargo bottlenecks, backlogs, cargo containers holding goods valued at millions of dollars stuck at the port, lines of trucks stuck waiting…

“There’s no word for it other than ‘hell,'” the Wall Street Journal quoted Bader as saying. “I’ve been in business thirtysome-odd years, and this is the most stressful time I’ve had.”

In a joint statement from Maher Terminals and Navis, the companies said:

Maher Terminals has commenced with the implementation of the final phase of the new terminal operating system at its facility in the Port of New York and New Jersey. After successful implementation of earlier phases of this important initiative, and extensive testing of the current phase of implementation, the operation has encountered some unexpected issues. These issues have led to delays, which are expected to be temporary while both Navis and Maher Terminals continue to commit all available resources to identify and resolve those technical issues. Noticeable improvements are already being realized as users adjust to new systems and processes.

Improvements are being realized as users adjust to new systems and processes?

They almost make it sound as though the problems encountered are typical from shippers and dockworkers learning to use a new operating system. Don’t worry, things are smoothing out now that users are getting better at using the new system.

Clearly, the huge and costly backups at the Port of New York and New Jersey are not from users figuring out how to use a new operating system.

A Wall Street Journal article by Ted Mann gives a clearer picture of what’s been happening to cause the backups:

The computer system at the port in Elizabeth, N.J., was meant to improve routing of cargo from ships to trucks and trains, helping terminal operators track containers and allowing longshoremen to locate them for loading onto trucks. But industry officials and the longshoremen’s union said elements of the system didn’t successfully communicate with each other. “The system wasn’t speaking to itself,” said John Nardi, president of the New York Shipping Association, a trade group of terminal operators that includes Maher.

Maher Terminals and the operating system’s maker, Navis LLC, a division of Finland-based Cargotec Corp., said in a joint news release last week that “real-time interactions between the various system components deployed in the container yard were not operating as designed.” As a temporary solution, certain automated components of the system were scaled back, the companies said. They didn’t reveal the source of the problems.

The Port of New York and New Jersey is the United States’ biggest port on the East Coast in terms of volume and number 3 overall in the U.S. behind the Ports of Los Angeles and Long Beach.

These technical problems hurt, especially after Hurricane Sandy hit the Port of New York and New Jersey so hard back in November.

Shippers have been cost money in delays and fees they’ve had to pay to trucking companies trying to get their goods, trucking companies have been cost time and resources with all the backups, retailers haven’t been able to get goods for back to school and holiday promotions, but there are some benefitting from the woes at the Port of New York and New Jersey.

The Daily Press released an article titled Computer problems at N.J. port a boon to Virginia that reported:

An official at Virginia International Terminals, the state-formed port management company, and a local trucking company executive said both rail and truck traffic are surging as a direct result of New York’s headache — an unexpected boon at a time when Hampton Roads is already seeing cargo on the rise.

“The trucking community has absolutely seen an increase in diversion freight from the Northeast,” said Ed O’Callaghan, who leads the Tidewater Motor Truck Association.

“I can say for a fact we’ve gotten some rail diversions in excess of 1,000 containers,” said Tom Capozzi, a top sales executive at VIT, who’s slated to become chief commercial officer under a restructured Virginia Port Authority.

Rerouting has not only benefitted the Port of Virginia, but ports all along the East Coast.

The Port of Baltimore is looking to work this situation to their advantage not merely for the time being, but also for the ongoing future. Wall Street Journal reports:

Port officials in Baltimore, which is closer to the Midwest and is already prepared to take on the much-larger vessels expected to follow the expansion of the Panama Canal, said they were getting cargo that is normally shipped to New York and were trying to persuade customers to stick with Baltimore.

Perhaps after experiencing problems at the Port of New York and New Jersey, many shippers will be inclined to stay with the ports to which they rerouted.

The backups at the Port of New York and New Jersey are starting to ease as Maher has scaled back on their new computer system. They’ve put some of the automated features that weren’t working properly on hold with plans to add them back in later (hopefully, with the bugs worked out this time).

As things return to normal, we will see if a significant number of shippers decide to stick with their alternate ports like Baltimore or Virginia.

With over 27 years of experience in international shipping, Universal Cargo Management always works hard to route your shipments, whether imports or exports, the best possible way to ensure the smoothest cargo delivery possible, no matter what’s happening in the world of international business.

Come back to our blog regularly for news and resources related to international business and international shipping.

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Sources:

http://www.nj.com/business/index.ssf/2013/08/new_jersey_port_gridlock_eases.html

http://online.wsj.com/article/SB10001424127887323420604578648190833108164.html

http://www.navis.com/news/press/joint-media-statement-maher-terminals-and-navis

http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-293994/

http://www.dailypress.com/news/breaking/dp-nws-ports-newyork-problems-20130801,0,4335906.story