Ocean carriers are committed to ending the 50-year-old practice of supplying chassis to their customers in the U.S., but industry experts predicted it will take several years before equipment suppliers decide upon a model or models that meet the needs of shippers.
"The process will take several years, but not decades," said Dick Coleman, president of ContainerPort Group, a company that provides inland terminal and transportation services for shipping lines, shippers and receivers.
Coleman participated on a chassis panel Tuesday at the annual conference of the National Customs Brokers and Forwarders Association of America in Phoenix.
About a dozen ocean carriers this past year announced their intention of getting out of the chassis business. However, most carriers have yet to provide any details as to how they intend to divest themselves of chassis and who will replace them as suppliers of equipment to their customers.
"A line makes an announcement, but doesn't follow up," said John Mizerek, executive vice president of sales at Flexi-Van Leasing.
Many of the carriers that have announced their intention to stop supplying chassis to their customers have done so in smaller markets that account for a fraction of the chassis use in the U.S., said Bill Rooney, an industry consultant and retired president of Hanjin America.
Carriers are getting out of the chassis business in the U.S. -- the only market in the world where they provide chassis to their customers -- because they spend millions of dollars a year on chassis and they incur this expense without gaining a competitive edge in the marketplace, Rooney said.
It appears that there will be several chassis models that will take hold in the coming year. Coleman noted that container pools have worked efficiently in some markets, such as at the Virginia ports, so pools will be one of the models. However, not all pools have been efficient. Some have had lapses in maintaining and repairing their equipment. It is therefore likely that chassis pools will be only an interim step, Coleman said.
The daily for-hire approach, as practiced by Maersk Line's Direct Chassis Link, will likely continue as well. DCLI charges truckers a flat fee of $11 a day for unlimited usage of the chassis. However, this approach places a significant administrative burden on the trucker, Coleman said.
Third-party equipment lessors will also be in the mix and will increase their book of business. Mizerek noted that Flexi-Van this past year went from 30 ocean carrier customers to 1,300 customers of all types.
One certainty, Coleman said, is that shippers and receivers, who have grown accustomed to virtually free use of chassis, will have to pay for use of the equipment no matter what the model.
Rooney said this development will be good for the transportation industry because it will drive efficiency. "The whole supply chain is better off when chassis are priced correctly," he said.
-- Contact Bill Mongelluzzo at firstname.lastname@example.org.