Winter Weather Delays Now an Even More Costly Problem

February 28, 2014
By Rich Roche

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Truckers have been struggling all week to pull import containers from the terminals in NY/NJ with limited success. Limited gate hours and very long lines have resulted in truckers being able to service only half the number of loads they are tasked with. As the week winds down, so does the free time allotted by the terminals. An unprecedented number of containers are expected to be charged demurrage as a result.

Winter storms are not the only problem for truckers and your cargo.

The recent series of winter storms is but another hurdle for intermodal truckers in their battle to stay alive. The federally mandated reduction in operating hours has also taken a bite. A shift in chassis ownership away from ocean carriers over the past two years is now beginning to have a major consequences. Software changes at ocean terminals, labor slowdowns, and frequent spikes in cargo volume from mega-ships are all adding to the problems.

Despite these issues however, the hardest one to understand right now is that some of the terminals in New York‒seemingly overwhelmed with the backlog of containers needed to be handled on a daily basis‒are opting for reduced hours during these spike periods, rather than extended gate hours for late night or weekends.

Truckers are trying to pressure the terminals for more operating hours, but change is not coming easily. A task force for the Port of NY/NJ was recently created to address this issue, but may not have results for quite some time.

Meanwhile, this is beginning to translate into longer delays than normal to pick up inbound cargo, which will result in demurrage charges (rent to store containers at the terminal after the expiration of allotted free time) to kick in. This adds insult to those already injured by the delays.

While Mohawk typically does a very good job of preventing such charges before they occur, we are starting to see a downward spiral due to the duration and magnitude of the present backlog that will force demurrage, lay time, detention and per diem charges on some containers this season. As tariff items are charged by the terminals, there may be little we can do about the charges. The problem is pervasive, hitting other terminals on the East Coast, and impacting every trucking company that moves intermodal containers.

The problem will be further compounded the longer it goes on. Truckers do not make money when they are standing idle. They do not currently get compensated for their time waiting in lines that may be several miles long to get into the terminals. Many drivers are refusing to come to work. They have little interest in using up their allotted hours just to stand in line for no pay. Even if successful in getting a container out of the terminal, once out of hours, they must park the containers until they can clock back in the next day. In turn, each delay forces more containers to sit idle on a chassis, which in turn makes that chassis unavailable for use under another container. This creates a shortage of equipment which slows the terminals down even more. Now, some operators have announced they will not handle exports, further reducing the chassis flow and exacerbating the problem. It is about as ugly as we have ever seen it. Unfortunately, it may get even worse before it gets better.

Please work with your Mohawk Customer Service Specialist to prioritize your deliveries while offering as much flexibility as you can to the trucker’s suggested schedule. The more turns they can make, the more power available to haul more loads. Barring additional winter storms that seem to be the latest catalyst for what is already an ailing system, we may still have a few weeks of digging out. We are told an early March storm is heading our way Sunday evening that could close down the terminals again on Monday.

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Rich Roche is Vice President, International Transportation for Mohawk Global Logistics. Read more about Rich here.

Vice President, International Transportation