It’s going to be some time before ocean carriers, trucking companies and equipment owners build a new chassis model as ship lines retreat from the business of providing the wheeled intermodal equipment. During the transition, technology providers such as IAS are providing ocean carriers, motor carriers and chassis owners with the capabilities to operate.
Motor carriers need new sources of chassis supply as well as the tools to manage them while ocean carriers are reducing their chassis expenses and generating new revenue. The challenges of transitioning to an entirely new business model set the stage for Oakland, Calif.-based IAS, a provider of asset management services and technology to the intermodal industry, to step to the plate with ChassisManager, a new platform for connecting chassis owners and users.
The platform fits IAS’s cloud-based software-as-a-service delivery model, but the company prefers to avoid the SaaS moniker. Instead, it emphasizes the service aspect of SaaS, based on the premise that carriers don’t care about underlying technologies as long as the job gets done.
“SaaS is a moniker that doesn’t really tell whole story,” said Steven Dowse, chief technology officer for IAS. “Having a service model is more important, since technology can go wrong.”
IAS works primarily with the top ocean carriers and forwarders to provide connectivity with disparate third-party networks.
The ChassisManager service, which debuted late last year, arrives at an opportune moment for chassis owners, ocean carriers, motor carriers, third-party logistics providers and beneficial cargo owners, given the complexity and challenges of adapting to a new business model. Outside of a few locations such as Virginia International Terminals — where Hampton Roads Chassis Pool is in the process of implementing a program that enables ocean carriers to stop providing chassis — there is a fair amount of confusion.
Prior to the recession, carriers owned or leased most of the approximately 700,000 ocean container chassis in use in the United States. Today, carriers control between 250,000 to 300,000 units.
There are a host of challenges for supply chain partners in the chassis rental business, not least of which is the sheer volume of data and the need for reconciliation. Numerous exceptions have to be managed, a complex process that depends on IAS receiving contract data from ocean carriers, which wasn’t always necessary under the old model. There are complex billing rules the parties must adhere to.
Ensuring the timeliness and accuracy of a host of new data elements is an ongoing challenge. Parties to chassis rental transactions must adhere to higher standards of quality control, which led IAS to put systems and processes in place to allow for the exchange of data and feedback, and real-time visibility into transactions.
Various regional models for chassis rentals are evolving throughout the country, said Christopher Mazza, senior vice president of business development at IAS. There’s no doubt the process has become more complex. In the past, a chassis owner might have 15 to 20 customers among the major ocean carriers. Today, with ocean carriers exiting the market, asset owners have thousands of potential customers.
“You have to generate rental invoices with every one of them,” Mazza said. “It presents vastly different challenges.”
Ongoing investment in technology, including a cloud-based data platform, enabled IAS to roll out the ChassisManager platform within a five-month window. The new solution builds on the company’s intermodal network of tens of thousands of registered users. “We were able to use our underlying technologies and service work to get the degree of nimbleness we wanted when the changes came,” Mazza said.
IAS’s singular focus on its intermodal network niche contributes to its ability to adapt in the marketplace. The company refuses to spread itself too thin. “Companies have to differentiate with a clear industry focus,” Dowse said. “You can’t have a one-stop solution.”
IAS has set up a Chassis University on its Web site, www.interasset.com, to help companies transition to the new business model. An instructional blog provides assistance with each data element in chassis rental and reconciliation processes.
“Over the longer term, it will be a simpler and better model, but in the transition phase there is a steep learning curve as companies strive to find a standardized model,” Mazza said.
IAS estimates that it will take another two to three years before the industry fully transitions to the new model. By then, of course, an entirely new business model could emerge, given the mutable nature of trade and economics.
Contact David Biederman at firstname.lastname@example.org.