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October 16, 2019 5:00 PM, EDT

Group Organizing Rebuttal Effort to Revised Chassis Pool Plan at Ports

Shipping companies to control chassis pool. Trucks line up to load containers at the Port of Savannah. (Ty Wright/Bloomberg News)

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The simmering dispute between ocean shippers and trucking over the availability, price and quality of chassis has gotten a little hotter.

Transport Topics has confirmed that a new program at ports in Georgia and South Carolina to improve the quality of chassis has been scrapped.

“The marine carriers pitched a fit because it would have increased their costs,” said Dave Manning, executive director of the North American Chassis Pool Cooperative and former chairman of American Trucking Associations, who has been involved in negotiations to improve the quality of chassis at ports. “The steamship lines followed up and complained about the plan.”

Dave Manning

Manning

The Southern States Chassis Pool, made up of shipping lines and beneficial cargo owners, was to have launched this year. It was designed to bring new chassis to ports and charge BCOs a flat rate regardless of the carrier or merchant haulage.

It was formed in response to complaints by trucking leaders across the industry that the chassis provided by shipping lines, which handle most of the chassis at several ports — including the Port of Savannah and the Port of Charleston — often were broken or in poor condition. Many chassis lacked anti-lock brakes, LED lights or radial tires.

ATA’s Intermodal Motor Carrier Conference recently voted overwhelmingly to form a subcommittee to begin studying the issue of what it’s calling “chassis choice.” Committee members said having one entity control all of the chassis at a facility results in a monopoly situation and keeps prices artificially high.

“We’re moving forward on the chassis choice issue, full steam ahead,” IMCC Executive Director Tyler Rushforth said. “In a lot of instances, the ocean carriers are bad actors and so the question becomes, if they’re not playing fair ball, what are we going to do about it?”

In recent months, the shipping lines argued the cost and timetable to implement the new Southern States Chassis Pool were not realistic, and they offered their alternative to repair old chassis and make new ones available.

Shipping companies to control chassis pool.

Port officials said it will accomplish the same goals but with a longer timetable to implement the changes.

“As we went through the negotiations with the current chassis provider, South Atlantic Chassis Pool, they were able to change quite a few things in their business model to meet us in the middle,” Port of Savannah Chief Operating Officer Ed McCarthy told TT.

He said that includes guaranteeing an estimated 60,000 chassis will be upgraded to include anti-lock braking systems, radial tires and LED lighting on every unit.

The LED lights and radial tires will be on all units within three years, but the deadline for the brakes will be extended to five years. Already, an estimated 14,000 chassis have been upgraded with anti-lock braking systems and other new equipment.

Manning said he doubts some of the improvements the trucking industry has been pushing for, which have been agreed to by the shipping carriers, will be implemented.

“The ports have given them three years to see if they can make that work successfully or not, but I don’t believe anyone is holding their breath that it will be successful,” he said.

The ports are defending their decision, contending the results will be the same, albeit with a slightly longer timetable.

“We want to make sure we have the safest chassis on our roads. The timeline to get it done is three to five years, so I think we are meeting what the trucking community is looking for, which is a safer unit,” McCarthy said. “It’s a commitment of tens of millions of dollars to do that. It’s a road to a safer chassis.”

Shipping companies to control chassis pool.

Trucks at a container terminal at the Port of Charleston. (John Sommers II for Transport Topics)

At most of the major ports, trucking companies are told which chassis they can use and what the rates will be. That’s because the shipping companies historically have had control of the business under the Uniform Intermodal Interchange Agreement administered by a 10-member group of industry representatives.

While the cost of a chassis typically is between $15 to $25 a day, the trucking industry has been angered recently by another development at some ports. Earlier this year, in some cases prices increased by an additional $30 to $75 for what are known in the industry as “street turns.”

Historically, truck drivers have picked up fully loaded containers at ports and delivered the contents to a warehouse or intermodal facility without being charged a fee. The cost of using the ocean carrier’s container has been built into the shipping contract. Oftentimes, drivers would either fill the container with goods from that facility or another one and return to the port with a load to be exported. This is called a street turn. Under the new fee structure, ocean carriers were charging drivers the fee if they come back into the port with a loaded container.

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