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May 8, 2020 12:00 PM, EDT

Trucking Industry Chassis Dispute With Ocean Carriers Heats Up

intermodal chassisTrac Intermodal

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U.S. trucking companies that operate at the nation’s ports are preparing to take a long-simmering financial dispute with overseas ocean carriers to the Federal Maritime Commission.

The issue revolves around trucking industry allegations that steamship lines have been manipulating the intermodal chassis leasing system to the detriment of trucking companies that operate at the nation’s ports, resulting in $1.8 billion in overcharges during the last three years.

The Intermodal Motor Carriers Conference of American Trucking Associations in a May 4 letter to the Ocean Carrier Equipment Management Association warned that it plans to file a formal complaint with the Federal Maritime Commission, and contends that the actions of the ocean carriers and leasing agents are in violation of the federal Shipping Act of 1984.

Ocema CD Letter 5.4.20 (003) by Transport Topics on Scribd

In the letter, filed by the Washington, D.C., law firm Constantine Cannon LLP, IMCC seeks to have the chassis leasing procedures changed at the ports where OCEMA maintains control of the equipment. It is estimated that at the nation’s ports, OCEMA represents at least 80% of the container market.

ATA Executive Vice President of Advocacy Bill Sullivan told Transport Topics the ocean carriers have been overcharging at ports for years because of the lack of competition for chassis.

“Trucking companies working in the intermodal sector have been frustrated by the unfair treatment and what they see as abuse by their ocean carrier partners,” Sullivan said. “The trend is in the wrong direction, the abuse of intermodal motor carriers is increasing, and we’re done with it. It’s time to play this out.”

The IMCC seeks a reply by May 25, and said it plans to file the complaint if it does not receive a response by that date.

“We have had ongoing discussions on different topics over the years with the ATA,” said OCEMA Executive Director Jeffrey Lawrence in a statement provided to TT. “We have been able to resolve some issues, discuss many issues, and we continue to be open to talking to them if they have concerns. We are happy to discuss matters of mutual concern.”

At most major ports, ocean shipping companies have historically controlled the chassis leasing business under the Uniform Intermodal Interchange Agreement, which is administered by a 10-member group of industry representatives. Last October, the IMCC formed a subcommittee to begin studying the issue of what it calls “chassis choice.” Committee members said one entity controlling all of the chassis at a facility results in a monopoly situation, which keeps prices artificially high.

“At these facilities, you do not have a choice; you are mandated to use chassis X instead of chassis Y. That lack of choice creates a monopoly. These problems exist at most ports, at some level,” IMCC Executive Director Tyler Rushforth told TT.

RoadSigns

Host Seth Clevenger speaks with Mike Perkins and Derrick Loo, test drivers at Peloton Technology, one of the companies at the forefront of developing truck platooning systems. Hear a snippet, above, and get the full program by going to RoadSigns.TTNews.com.

He listed the Port of Charleston and the Port of Savannah as examples. IMCC said trucking companies at those ports and others pay upwards of $27 a day for a chassis, while ocean carriers’ costs are estimated to be 50% of that amount. On any given day, hundreds of thousands of chassis are available for trucking companies, which is how IMCC arrived at the $1.8 billion figure.

“They’re making up that cost differential on the backs of the trucking companies,” said Rushforth. The IMCC also maintains that equipment at ports where “chassis choice” programs have been adopted are of better quality, with features including steel-belted radial tires, LED lighting chassis and disc brakes, and are less expensive than chassis at other ports.

For years, ocean carriers owned and leased chassis and other intermodal equipment to trucking companies so truck drivers could move ocean containers from the ports to inland locations, then return them to the ports when the boxes were empty. About 10 years ago ocean carriers began working with third-party leasing companies to reduce their cost of managing and owning containers.

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