Why MGX’s New Jersey Rail Facility?

Our Story/Background

We have learned a lot over the years here at MGX. We strive to find the best solutions for our business based on efficiency and control. One of our biggest wins that we would like to share is the value of getting to our product to stateside faster. After experiencing troubles and delays when transiting to CA strictly by water and through the Panama Canal, we pivoted our strategy to nearshoring to save time and gain control over our supply chain.

Nearshoring our containers that were heading to the West Coast allowed us to save 4+ weeks of transit time, greatly improve our fill rates, and have faster inventory turns. The improved cash cycle was a significant benefit for us as previously, the additional time we lost navigating the Panama Canal forced us to pay for goods* before we had even sold a single case. Transshipping through NJ allowed us to speed up delivery to the West Coast, which improved our cash flow and turned a previously negative situation into a positive one by giving us more control over the cash cycle. This change also allowed us to optimize operations, which streamlined our processes and enhanced efficiency.

Additionally, we were forecasting and ordering for California separately from the rest of the country and were routinely over-ordering due to unpredictable delivery times. Since transitioning to rail, we have gained control and are now able to forecast and manage our inventory centrally. Transshipping through New Jersey also gave us the flexibility to adjust our shipment volumes to CA or redirect product elsewhere in the U.S. This essentially started giving us a second chance to make smarter distribution decisions.

Another challenge we were constantly facing was the uncertainties of traveling through the Panama Canal and declined services to CA, as there was only one steamship line offering service from Europe to Oakland. We found that there are significantly more carrier and route options when shipping to NJ. We now have access to pricing flexibility and have options to get the best possible rates. This was a much better option for us compared to the limited options available when directly shipping to the West Coast by ocean.

Overall, nearshoring West Coast bound containers and transshipping through NJ has significantly improved our supply chain, cash flow, inventory management, and operational flexibility. This has turned our prior challenges into competitive advantages.

How Can We Help You?

Save Time to Market

Transshipping through NJ allows for the total transit time from Europe to California to be cut by 4+ weeks. This leads to significantly faster time to market and helps with increased fill rates and faster inventory turnover.

Inventory Management

Getting your product to stateside earlier doesn’t just give you enormous flexibility, it also gives you enormous visibility. When your product is on the water, visibility is severely limited. Transloading to NJ would allow for high visibility and control, empowering better forecasting, planning, and responsiveness.

Additionally, nearshoring enables strategic flexibility in your supply chain, as it allows you to reallocate inventory based on real time demand. You would have a second chance to decide whether you want to reduce volumes to the West Coast or even redirect your shipments to a new destination, enhancing both efficiency and control.

Transit Time Reliability

The Panama Canal is the greatest variable in the supply lane to the West Coast. Even if the supply chain hit all their deadlines, there would still be missed promotions due to transit time delays on the water. Transshipping to NJ avoids the unpredictable overwater route to California.

Protect Your Cargo

There are extreme temperature swings 12 months per year. Transloading to NJ means your product will be shipped in insulated railcars, which will help ensure protection of your product.

Shipping Route Comparison

Option 1 – Ship direct from Europe to CA, through the Panama Canal

Time: 48-60 Days

Option 2 – Ship to NJ, transload to boxcar, rail to CA

Time: 23-33 Days

*Reference based on traditional 60-day payment terms