Retailers are feeling a “negative economic impact” from congestion at the Port of New York and New Jersey and are anxious for the delays to abate before the start of the pre-holiday peak shipping season, the National Retail Federation says.
NRF President Matthew Shay sent a letter to the Port Authority of New York and New Jersey and the New York Shipping Association, expressing concern about delays that have plagued the port during the last two months.
Shay urged the port authority and terminal operators to work with cargo interests, truckers and others to find solutions.
“At a minimum, the terminal operators should offer additional free time, including the weekend, in order to help clear out the backlog,” he said. “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.
“NRF members have experienced significant delays within their supply chains. The delays are impacting both import and export containers,” Shay said. “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.”
Delays at the port started in early June when Maher Terminals encountered problems integrating a new Navis N4 operating platform with the terminal’s existing systems. Delays spread throughout the port as ships were diverted to other terminals, including Global Terminal at Bayonne, N.J., which is in the midst of major construction.
Maher said last week that it had “turned the corner” on its computer problems and would be ready when diverted ships return to the port’s largest terminal next month. Operators hope the end of the summer vacation season will increase the supply of labor, which has been stretched tight by congestion that has reduced terminals’ productivity.
Container line Hapag-Lloyd sent an extraordinary message to customers, warning that the delays are likely to continue until mid-September and urging them to divert cargo to other U.S. East Coast and Canadian ports.
Shay’s letter cited several examples of retailers that incurred extra costs and missed shipping deadlines because of the problems at New York-New Jersey.
He said one unidentified retailer said drayage operators were charging an additional $65 per week for drivers’ waiting time, resulting in $6,000 a week in unbudgeted expense for that company alone. Others have had to pay for extra storage and chassis rentals, and have had to absorb delays in delivery of merchandise to stores.
“While we know the situation is difficult for everyone, we urge you to act quickly to resolve the problems before they get worse and cost U.S. retailers and others more money in delayed cargo and lost sales,” Shay’s letter said.