Two Largest Shipping Firms to Ditch U.S. Chassis Business

This story appears in the July 26 print edition of Transport Topics.

Two more of the world’s five largest shipping companies announced plans to gradually pull out of the U.S. chassis supply business just as new federal chassis safety rules are being implemented.

CMA CGM Group, which is the third-largest ocean carrier, and Evergreen Line, the fourth largest, outlined their plans as they followed largest ocean carrier Maersk Line’s move to force truckers to manage chassis.

On June 30, the Federal Motor Carrier Safety Administration’s implementation of chassis rules began with the intent of making chassis safer by shifting the maintenance burden from truckers to the ocean carriers and lessors that own them.

“The ocean carriers don’t want to be yoked to the responsibility of maintaining chassis,” said Joe Rajkovacz, regulatory affairs director for the Owner-Operator Independent Drivers Association.

“Small-business truckers were angry with the system before because of equipment problems, like dry rotted tires that failed on the road,” Rajkovacz said, as well as higher out-of-service rates for chassis than trailers. “Now this is an increased burden on truckers without any added revenues.”

Rajkovacz said buying or renting chassis will be a burden for small truckers who lack adequate financial resources.

Truckers own and manage chassis everywhere in the world except the United States.

“CMA CGM will gradually discontinue the provision of chassis to truckers, a move which will generate greater operational efficiency and reduce the environment impact,” the company said in a customer newsletter.

“Burgeoning world trade is impacting valuable waterfront terminal space, and projected growth of commerce makes the ongoing storage of chassis no longer viable,” Evergreen’s statement said.

Neither Taiwan-based Evergreen nor CMA CGM, based in France, would elaborate on their statements when contacted by Transport Topics.

Japan’s NYK Line reportedly plans to stop supplying chassis at five East Coast locations — Miami, Boston, Baltimore, Philadelphia and Pittsburgh — as of Aug. 1 for import and export shipments. Calls to NYK’s North American office in New Jersey for confirmation were not returned.

Jeff Bader, who is president of the Association of Bi-State Motor Carriers and of Golden Carriers, Hillside, N.J., said these moves are not a surprise.

“That is going to be the standard going forward,” Bader said. “We don’t have a choice. Maersk has proven that the trucking industry doesn’t need them to provide chassis.”

Maersk last year set up a separate subsidiary to offer daily rental of chassis to use for any ocean carrier’s freight.

Bader said customers in general have accepted the added fee, typically $15, that motor carriers are charging to defray chassis costs, which no longer are built into the rates charged by ocean carriers.

CMA CGM plans to stop providing chassis on Oct. 1 in Mobile, Ala.; on Nov. 1 in New York, Philadelphia, Baltimore and Boston; on Jan. 1 in Houston and Dallas; and in Seattle and Los Angeles on March 1, as well as in Long Beach and Oakland in California.

Evergreen said it will stop providing chassis in Boston on Aug. 15 and then will expand the program gradually to other U.S. locations in the coming months.

“The condition of the chassis has been very good so far,” Bader said — and an improvement over the general condition of chassis in the past.

CMA CGM said truckers would save time at terminals and safety would be improved because truckers can use their own chassis for multiple moves.

The ocean carriers also justified the changes by saying they would make terminal operations more efficient and improve emissions and port air quality.

Earlier this year, Orient Overseas Container Line, Hong Kong, and Atlantic Container Line, a European company with headquarters in Westfield, N.J., also said they were cutting back on chassis supply.

The Intermodal Association of North America declined to comment for this story.