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I>(Editor’s note: American Trucking Associations issued an analysis of intermodal freight operations at U.S. ports in the midst of recent, tense work situations. This is an excerpted version of that document.)
Without resolution to issues at America’s ports, the future of intermodal freight capacity is at stake. ATA is calling on the businesses that operate near U.S. ports to help bring relief to millions of Americans who move our nation’s intermodal freight.
For decades, foreign-owned steamship lines, or SSLs, have engaged in harsh business practices and received antitrust exemptions that have combined to establish an increasingly difficult business environment for motor carriers engaged in moving intermodal freight at our nation’s ports.
These are some of the serious concerns that American-owned motor carriers, their employees and their independent contractors have identified as jeopardizing the future success of intermodal freight transportation:
Roadability. Unsafe Intermodal Chassis on America’s Highways.
For years, ATA has negotiated in good faith with the foreign SSLs, urging them to provide safe, compliant chassis, the equipment used to haul containerized freight over the highways.
The SSLs own or lease more than 750,000 chassis and interchange them to trucking companies to deliver intermodal containers to the SSLs’ customers. If motor carriers refuse to take unsafe or non-compliant chassis, eventually the carriers are punished by being offered no further work.
Many foreign-owned SSLs do not spend sufficient money to maintain and repair their own chassis to meet existing federal safety regulations. ATA has worked for several years with the Department of Transportation to address this safety gap, but this issue remains unresolved.
Business Practices by Foreign-Owned SSLs and Maritime Port Facilities.
SSLs or their brokers order truck deliveries for their containerized freight at agreed-upon rates. All too often the motor carrier gets paid less than the previously agreed rate. If the carrier insists on the agreed rate, SSLs simply refuse to pay it. Truckers then face overwhelming potential court costs or a high probability of being shut out of the market.
Increasingly, motor carriers are being directed to reposition intermodal equipment without prior notice by the steamship line and without additional compensation for these secondary moves.
In addition, maritime ports have no standard on the amount of time it should take for a trucker to enter, pick up the container-on-chassis and exit the facility. The lack of a standard “turn time” induces logistical inefficiencies into motor carriers’ planning and productivity.
The UIIA Is a One-Sided Contract.
Motor carriers are generally required to sign onto a common contract called the Uniform Intermodal Interchange and Facilities Access Agreement, or “UIIA.”
By signing this contract, motor carriers agree to be responsible for the chassis that they do not control, do not own and cannot maintain.
Furthermore, the UIIA states that the SSLs make no warranty as to the condition of the chassis, but requires truckers to use the SSL-owned chassis on U.S. highways. Therefore, if a chassis breaks down on the highway, the motor carrier must fix it and then attempt to seek reimbursement from the foreign SSL. Motor carriers lose thousands of dollars annually in unreimbursed repair expenses to fix the SSLs’ chassis.
If the brakes on the chassis fail and that results in death, injury or property damage, the motor carrier and driver may be liable under the UIIA for the consequences, even when the cause of the incident was the failure of the SSLs to maintain the chassis for highway use. The UIIA also allows SSLs to charge truckers for the late return of equipment that is delayed because of conditions controlled by the SSLs.
Port Congestion.
The SSLs generally own the businesses that manage the terminals and chassis at ports. Therefore, they are the primary cause of congestion at our maritime ports because:
They often fail to hire sufficient help at the entrances to process trucks and drivers into the ports and often refuse to keep gates open evenings and weekends when traffic is lower.
Once drivers arrive at the port they can spend hours searching for a chassis with the fewest safety defects, waiting to get it repaired and again waiting in line to exit the facility.
Time spent in ports by drivers can range from 30 minutes to four hours or more. Two- to three-hour delays are becoming common. These delays reduce significantly the number of deliveries a driver can perform. Given that truckers are often paid a flat rate for delivering a container, it is easy to see how delays cause enormous economic harm to both drivers and the motor carriers that hire them.
ATA is seriously concerned with the present business model for hauling intermodal freight in and out of ports and believes the business conditions need drastic improvements. With port freight expected to at least double by 2020 or sooner, business conditions must improve to sustain the economic viability and efficiency of the intermodal motor carrier segment of trucking.
Increasingly, drivers and independent contractors are leaving this industry as a result of such business conditions. We must all recognize that no port freight moves without trucks and truck drivers.
The future of intermodal trucking capacity is at stake and ATA is calling on the SSLs, the port operators, intermodal marketing companies and the Federal Maritime Commission to work cooperatively with the American intermodal motor carrier industry to address these very real and troubling business conditions.
ATA is a national trade association for the trucking industry with headquarters in Alexandria, Va., and affiliated associations in every state. It owns Transport Topics Publishing Group.
This story appeared in the July 26 print edition of Transport Topics. Subscribe today.
