Ocean container lines may take another year or longer to complete the process of dropping chassis from the U.S. transportation services, according to an executive at an equipment leasing company.
In the meantime, retailers, truckers and terminal operators will operate in a confusing environment in which a few lines completely exit the chassis business while others stop providing the truck linehaul equipment only in smaller markets, said John Mizerek, vice president of sales at Flexi-Van Leasing.
Mizerek said when a dozen carriers last year announced they would divest their costly chassis in the U.S., the only major market in the world where carriers provide chassis to their customers, he thought the process would be completed by the end of 2011.
Chassis news from JOC:
Retailer Calls for Uniform Chassis Solution
However, except for a few carriers such as Maersk Line, CMA CGM and Hapag Lloyd, most carriers “are having trouble making up their minds,” he told the Exchange 2011 seminar Tuesday sponsored by Trinium Technologies in Long Beach.
Maersk set the standard for the shipping industry more than a year ago when it established Direct Chassis Link Inc. as a chassis leasing company and DCLI set $11 a day as the lease rate. That has become the market rate in the U.S. for per-diem leases.
However, several carriers that said they are dropping chassis service have done so primarily in second-tier markets such as Pittsburgh, Buffalo, Philadelphia and Boston. Some lines have not followed up at all on their announcements, and importers who recently negotiated service contracts with carriers in the eastbound Pacific said the subject wasn’t even raised in the negotiations.
Mizerek said he is convinced carriers are taking this issue seriously because the cost of owning and repairing chassis, and the liability they face from accidents involving defective chassis, costs the carriers collectively billions of dollars a year.
There has been no clear answer yet on who will provide chassis and how to charge for them, but Mizerek believes the U.S. eventually will move toward the Canadian model in which the trucker leases or owns the chassis and the cost is billed to the beneficial cargo owner.
Mizerek said ideally the U.S. model will be based on the neutral chassis, known as gray chassis. In each region, equipment providers, perhaps including large trucking companies, would contribute equipment to a “massive rental pool.” The lessors would probably offer several different arrangements such as a per-diem lease, a long-term lease or a volume-based lease.
Flexi-Van has approached some large retailers and offered them a guaranteed rate throughout their national operations. The rate would be lower than the standard $11 per day rate because the chassis likely would see a lower damage and repair rate in the closed environment, Mizerek said.