The Los Angeles and Long Beach port directors are determined to help the Southern California transportation community develop an effective chassis regime, with the creation of a gray chassis fleet being the first step in this effort.
“We have to get that piece fixed first,” said Chris Lytle, executive director of the Port of Long Beach. Lytle told the Harbor Association of Industry and Commerce on Thursday he believes the concept of a neutral chassis fleet has universal support among shipping lines and terminal operators.
Shipping lines in the U.S. are steadily pulling out of the chassis business. After more than 40 years of providing chassis to the transportation industry, carriers intend to completely relinquish the ownership, maintenance and repair of the equipment. Eventually, they will operate in the U.S. the way they have always operated in the rest of the world, which is to let truckers, equipment lessors or pools provide and maintain chassis.
While they have moved quickly in this endeavor in smaller ports and inland locations, the carriers are now turning to the nation’s largest port complex, and it is already causing problems in Los Angeles-Long Beach.
Harbor truckers complain about equipment shortages, added congestion at marine terminals and additional operational costs incurred in “split moves” in which the container is dropped off at one terminal and the chassis at a second location.
Foreseeing that the problems that were beginning to develop last year would only get worse as more carriers exited the chassis business, Los Angeles and Long Beach formed a chassis working group with representatives from virtually every industry that is present in the harbor.
“It grew out of the competitive cargo strategy,” Geraldine Knatz, executive director of the Port of Los Angeles, told the HAIC meeting. The ports know that if chassis issues get out of hand during this transitional period, the ports’ reputation will suffer and it could result in a loss of business.
As landlord ports, Los Angeles and Long Beach cannot tell the private sector what model to choose, but they can act as neutral facilitators in helping all parties achieve a compromise solution.
Phase 1 of this effort will be to work for a neutral chassis fleet because many of today’s problems such as split deliveries would automatically be resolved, Lytle said.
With carriers operating in a number of vessel-sharing alliances, it often happens that a container that is delivered to one terminal will be carried on a chassis owned by a VSA partner, so the chassis must be delivered to that partner’s terminal. Truckers say the rates carriers are willing to pay them to reposition the chassis fall far short of what it costs them to do the work.
Phase 2 of the Southern California model will be to move the chassis fleet to neutral locations in the harbor area, Lytle said. Chassis are currently stored at marine terminals, taking up valuable waterfront property. Removing chassis from the terminals would free up hundreds of acres of terminal space that would be returned to cargo-handling.
The ports will play an active role in this effort if they can find enough land in the harbor area that can be used for chassis storage, Knatz said. It is believed that the sprawling harbor complex will need several locations for chassis storage.
Both port directors said the time to develop a Southern California chassis solution is now, and with approximately 100,000 chassis spread out across the complex, the benefits are obvious. “When you look at the system that’s out there today, it’s the biggest no-brainer in the history of mankind,” Lytle said.