Retailer Calls for Uniform Chassis Solution

A major retail shipper says ocean carriers have not stopped providing chassis for imported container moves despite widespread shipping company announcements and that he’ll try to opt out of any changes without a broad, industry-wide to changes in the future.

“We need a simple set of solutions, not many solutions,” Dean Tracy, director of international transportation at home improvement retailer Lowe’s.

“If we do not see that, we’re going to go back to the ocean carriers and say we want to be exempt,” Tracy told this month’s Virginia International Trade Symposium in Norfolk, Va. “Then it becomes a cat and mouse game.”

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The concerns over chassis service for imported container moves have been growing as more carriers have announced they will stop providing the equipment for truck drayage movements. Carriers traditionally have provided chassis to shippers in the United States and built the cost into inbound rates.

Maersk Line formed a separate division, Direct ChassisLink, and some intermodal and drayage have announced services at some ports. But there has been no uniform new model for providing chassis at port terminals and that is raising questions over the availability of necessary equipment heading into this year’s peak season

Tracy said, however, the announcements have not triggered changes so far this year.

“There has not been a substantive movement to get out of the business,” he said. “The reality is, there really is no difference today from an operations perspective from what it was last year. Our business model hasn’t changed today from 12 months ago.”

But he remains wary that a patchwork of varying services at a gateway, or across the country, would add unwanted complications to distribution networks.

“There are 14 players on the trans-Pacific trade, and I can’t serve 14 masters,” he said. “We need a program that has uniformity. We have 16 distribution centers across the United States and we need to focus on the entire enterprise. If you have a program that has uniformity, we want to talk to you.

“If we can come up with a solution for everybody, where we all feed from the same plate, from a shipper’s perspective, we’re game,” Tracy said. “The complications of running a chassis operation introduce even more complexity to the shipping equation. We need to work on a model that keeps it simple.”

Bill Rooney, partner at Chassis Partners and the former president of Hanjin Shipping in the Americas, told the meeting hosted by the Virginia Port Authority he expects a so-called “gray fleet” chassis pool with various market participants will be the most likely new model.

“If you transfer management of chassis from the carriers to new owners who place a price on it, I have faith the private sector will fill the void,” he said. “As soon as that asset is rationally priced, that’s when you’re going to see things change.”