The mainframe of the department's online computerised system broke down on Sept 2 and clearing processes, which usually take two hours, now take more than 24 hours.
The mainframe, located at the Kuala Lumpur International Airport's cargo complex in Sepang, is connected to airports, seaports and border checkpoints.
Sources told the New Straits Times that the system failure had severed the link between the electronic data interchange (EDI) connection server and Customs, forwarders and agents.
Clearing processes now are being done manually but work is hampered by shortage of Customs personnel, creating long queues and a stockpile of uncleared cargo, including perishable items.
Dagang Net Technologies Sdn Bhd, which provides the EDI connection for the 150-odd airfreight forwarders -- 90 per cent of whom are multi-nationals -- is working overtime to solve the problem.
Customs deputy director-general (management) Ghazali Ahmad, however, described the problem as a "minor hiccup".
Ghazali said they were monitoring the situation round the clock through their information technology specialists.
"We are trying to improve the situation so as not to inconvenience customers who will suffer loss of time and money.
"At the same time, we want to speed up the manual transactions."
Airfreight Forwarders Association of Malaysia (AFAM) chairman Walter Culas said the manual procedure was time consuming, costly and affects efficiency of the forwarding industry.
"An electronic transaction that usually takes two hours now has to be done manually over a 24-hour period."
This, Culas said, was causing a massive slowdown in cargo turn-around, with delays in delivery of goods which in turn caused stockpiles at the warehouses.
"As freight forwarders, we have to absorb delayed expenses. Overheads have increased by 200 per cent to cover additional manpower and demurrage charges. This can cripple our business and eventually affect the country's economy."
Culas said he had highlighted the matter to Customs director-general Datuk Ibrahim Jaapar and Dagang Net Technologies chief executive officer Zaharin Ali, who were equally concerned.
"I have also written to the Transport, Finance and International Trade and Industry ministries for assistance and advice.
"I hope measures are taken to address the matter urgently to safeguard our industry and the country's economy."
Time Engineering Berhad's corporate services spokesman Zulina Mohamad Salleh, whose outfit is Dagang Net Technologies' holding company, said they had sent a team of five systems engineers to address the situation.
"We are still attempting to establish the cause of the problem. It is too early to say anything right now."
Zulina added that the engineers were trying to verify which of the two portions -- one linking the EDI with Customs and the other with the airfreight forwarders -- was malfunctioning.