Despite consistently high volumes of freight flowing to major marine terminals, consistent delays and congestion are turning these ports into a “madhouse”, as reported by FreightWaves. The increased cargo flow is on one hand a relief to freight carriers worried about an economic slowdown but a growing concern due to rising costs.
STG Logistics, a third-party logistics provider, warned of unprecedent import volumes at the Port of New York and New Jersey (http://www.stgusa.com/_assets/pdf/NJ%20delays.pdf) resulting from shippers importing large sums from Asia ahead of the Lunar New Year (February 5Th) and due to the uncertainty of tariffs on Chinese goods (potentially 10%-25%). While the number of loads is up, the congestion and delays mean drivers can retrieve fewer loads overall.
Costs throughout the supply chain are increasing with ocean carriers and terminals charging rates between $100-$250 per day for shippers that are delayed in returning or picking up containers. Carl Frederick, a veteran drayage broker at New Jersey ports, calculated ten-hour delays for Elizabeth and three-hour delays for both Newark and Bayonne. The government shutdown (and short-term return) makes opening the ports on weekends difficult, but once the government is fully back up and running, expect to see consistent weekend hours to reduce congestion.
Meanwhile, January saw the first train leave the Port of New York and New Jersey’s new $149 million rail terminal, with freight bound for the Midwest. The rail terminal is expected to boost rail freight from the port from the current 15% to 20% in the future. Since PNYNJ is the first the first port of call for many ocean carriers. They can now offload freight at the port and send it on it’s way by rail rather than leaving it on the ship to travel to ports down the Atlantic Coast. PNYNJ believes this will eliminate 375,000 truck trips annually. The freight lines have a very specific formula for profitability, if their calculations are not met, they refuse to ship. This presents a unique situation for drayage trucking. Usually, the more trucks one sees on the road, the better the economy is doing. For trucks servicing PNYNJ though, the opposite could be true.