A motor carrier has purchased more than 1,500 intermodal chassis from OOCL (USA) and will put them into Consolidated Chassis Management’s Mid-South cooperative pool for use by OOCL.
The deal by IMC Companies is a major step in the continuing disengagement by container ship lines from owning and operating chassis in the U.S. market, and toward increased motor carrier responsibility for the equipment.
IMC Companies and other members of the American Trucking Associations’ Intermodal Motor Carrier Conference are studying creation of a motor carrier cooperative that would purchase chassis from ocean carriers.
The North American Chassis Pool Cooperative would contribute chassis to neutral pools such as CCM. Motor carriers have filed papers in Delaware for formation of the co-op as a limited liability company.
CCM, owned by 18 container ship lines, operates six regional cooperative pools. CCM received Federal Maritime Commission approval last year to accept chassis contributed by truckers and shippers as well as ocean carriers.
The U.S. is the only major nation where most chassis used for international shipments are owned or leased by ocean carriers. In Europe and Asia, chassis normally are provided by truckers, forwarders or shippers.
Ocean carriers for a decade have been moving to reduce their multibillion-dollar involvement in chassis. The process began with chassis pools such as those operated by CCM, which was formed in 2005.
In 2009, Maersk Line transferred its chassis fleet to newly formed Direct ChassisLink Inc., which rents equipment to truckers by the day. Since the creation of DCLI, now owned by private equity firm Littlejohn, most major ocean carriers have quit providing free chassis in some or all locations.
IMC Companies is the first motor carrier to execute an operating agreement with CCM’s regional pools. The chassis IMC Companies acquired will be dedicated to OOCL’s use in CCM’s Memphis-based Mid-South pool.
“This is an historic event for our company and industry in developing an industry solution to transition ownership of chassis from ocean carriers to other entities,” IMC Companies Chairman Mark H. George said in announcing the deal.
George said IMC is part of the ATA group studying creation of a motor carrier co-op that would “acquire ocean carriers’ chassis and then contribute those chassis back into the CCM gray pool model.”
“Simply said, the cooperative’s desire would be to replace ocean carrier or other owning entities’ ownership with NACPC ownership and to have an active ‘say’ in managing the chassis through participation in a CCM pool,” George said in a statement.
Curtis Whalen, executive director of the ATA’s Intermodal Motor Carrier Conference, said truckers want to improve the quality of chassis. Motor carriers complain constantly about old equipment and poor maintenance by ocean carriers.
The move by ocean carriers to reduce their role in chassis supply gained momentum after the Federal Motor Carrier Safety Administration implemented changes that made equipment owners instead of trucking companies responsible for chassis safety while on the road.
Steve Rubin, a former TRAC Intermodal executive and now a consultant who was lead author of a recent Transportation Research Board study of chassis, said truckers will face higher rental costs during the next few years as aging chassis must be replaced.
The average life of chassis is about 20 years and the U.S. international chassis fleet will average 18 years by the end of 2015, Rubin said. “There’s a replacement-cycle cliff coming up,” he said.
As the chassis supply model continues to evolve, truckers want to ensure their needs aren’t ignored, Whalen said. “We need to do something to get better input into the process,” he said. “We also need to upgrade the nature of the chassis we depend on. We’ve always said we thought chassis were not maintained as well as we would maintain them.”