The ports of Long Beach and Los Angeles want to bring owners and users of chassis together to develop an operating model for the Southern California gateway.
The nation’s two largest container ports formed a working group that includes ocean carriers, marine terminal operators, cargo owners, truckers and the International Longshore and Warehouse Union to develop a chassis model that will work for all stakeholders moving goods through the San Pedro complex.
Chris Lytle, executive director of the Port of Long Beach, views the ports’ role as facilitating, rather than mandating, a Southern California chassis model. The ports could take some action if asked, such as providing land in the harbor area for a chassis depot, but Lytle doesn’t believe the ports will be asked to include a chassis provision in their tariffs.
For the past 50 years, shipping lines have provided chassis to beneficial cargo owners and truckers in the U.S. as part of an equipment package that includes the containers. This practice is limited to their U.S. operations. In the rest of the world, chassis are owned and managed by motor carriers or freight forwarders.
More than two years ago, carriers announced with great fanfare that they intended to divest themselves of chassis in order to eliminate the high costs they face to manage and repair chassis in their U.S. operations. Since the announcements, carrier attempts to exit the chassis business have been sporadic and in many cases confined to smaller ports and inland locations.
Carriers eventually intend to include Los Angeles and Long Beach in their chassis plans, though, so the ports want to work with all of the stakeholders in an effort to ensure that the model or models developed do not disadvantage any particular group, Lytle said.
He anticipates the working group will take months to develop a workable solution for the port complex. “This is not a 90-day solve,” he said.
One problem all ports face is that the interests of one group may be different from, or even adamantly opposed by, another stakeholder group. For example, Lytle noted, terminal operators would like to eliminate chassis storage at their facilities to free up valuable waterfront land for cargo-handling purposes.
Most BCOs and their truckers do not like that model, because truckers would have to go to off-site depots to pick up the chassis before proceeding to the marine terminals to pick up the containers, adding time and money to truckers’ costs. Longshore unions also are involved in the chassis debate, because the maintenance and repair of chassis is a source of employment for many dockworkers.
“This is a very complex issue. There are a lot of different constituencies,” Lytle said.
Because the chassis issue is complex, and at times contentious, the ports feel that as neutral entities, they can bring all of the stakeholders together to discuss all existing models, and possibly develop a model tailor-made for a port complex that is unique in many respects. “The goal is to get all of the options on the table,” he said.
The transportation community generally approves of the ports’ efforts to form the working group, although the private sector views the ideal working group as being larger and more diverse in its membership than the group that was formed.
John McLaurin, president of the Pacific Merchant Shipping Association, said in a letter last month to the Long Beach Board of Harbor Commissioners that there are a number of organizations across the country that have experience in the formation and operation of chassis pools that could be called upon for their expertise.
Lytle said the working group consists of a core group of stakeholders to provide some direction for the ports’ efforts. As the work proceeds, it’s possible the participants will seek to expand the membership.
Because most of the ocean carriers that call at Los Angeles-Long Beach have yet to give the port community a deadline for when they expect to divest themselves of chassis, the working group believes it has time to discuss all possible options before issuing any recommendations.