Carriers and chassis

Carriers and chassis

Container ship lines have a love-hate relationship with intermodal chassis. Carriers complain about the millions they spend to buy and maintain the equipment, which outside the U.S. is usually provided by customers. But there's a reason carriers are stuck with chassis: They volunteered for the job.

When containerization was taking root in the U.S., carriers offered chassis along with their containers as part of an intermodal package. Shippers liked the convenience, and carriers used chassis as a marketing tool. In Europe, by contrast, containerization developed in an environment dominated by vertically integrated forwarders, who provided their own chassis.

As container shipping volumes have soared, the U.S. chassis-management model doesn't look as good as it once did. Marine terminals are clogged with redundant chassis. Shippers are beefing about the resulting delays. Truckers, joined by the Teamsters union, have stepped up their complaints about chassis maintenance.

Rising ocean-carrier costs, port congestion and trucker complaints are pushing some carriers to consider neutral pools in which chassis would be managed - and maybe eventually owned - by someone else.

Chassis pools have generally worked well where they've been given a chance. Notable examples include Maher Terminals' cooperative pool at its terminal at the Port of New York and New Jersey and the portwide pool that Virginia International Terminals has established at Hampton Roads.

Well-managed chassis pools offer potential advantages for all concerned. Carriers can reduce their chassis fleets. Terminals can free up scarce land for more productive use. Truckers can enjoy improved equipment availability and standardized maintenance and repair. Shippers can benefit from reduced system costs and faster pickup and delivery at ports.

Most carriers agree that the pool concept is appealing. But with a few exceptions, getting them to embrace the idea has been like loading drunks into a taxicab - every time one goes in, another falls out the other door.

Why the resistance? Some of it comes from carriers' maintenance and repair departments, which fear loss of jobs. Some of it can be blamed on the sheer complexity of chassis ownership, leases, operations, maintenance and insurance. But the main reason for carrier resistance is the same thing that led them to become chassis owners in the first place: They still see chassis as a marketing advantage. Their greatest fear is that someday they'll book a shipper's container and have no chassis to put it on. To guard against that possibility, each line continues to invest in its own chassis fleet.

With business booming, you can't blame carriers for being more interested in ensuring equipment availability than in overhauling the system for long-term efficiency. That attitude is beginning to change, slowly. Look for the change to accelerate as waterfront land becomes more scarce and enlightened operators such as VIT and Maher show a better way.

Joseph Bonney is editor of The Journal of Commerce. He can be reached at (973) 848-7139, or via e-mail at jbonney@joc.com.