Rising cargo volume spurs Baltimore to move chassis pool

Rising cargo volume spurs Baltimore to move chassis pool

The Port of Baltimore handled 702,918 laden TEU in 2017, according to data from PIERS. Photo credit: Shutterstock.com.

Echoing the trend at other ports, the Port of Baltimore is moving the chassis pool off its only container terminal as the port deals with the challenges of growing cargo volume, including a 30 percent rise in turn times and trucker reports of sporadic chassis shortages and pick-up and drop-off delays.

Port officials say the decision to move the depot off the Seagirt Marine Terminal on Aug. 13 was triggered in part by a desire by the terminal operator, Ports America Chesapeake, to free up space and to improve efficiency in the port’s chassis provider system. The port’s volume has increased by 22 percent since 2010, and volume surged 7 percent last year, to 546,917 loaded TEU according to PIERS, a sister product of JOC.com. Volume in the first quarter of 2018 grew by 10.7 percent to 182,810 loaded TEU, over the same period in 2017 — above the 6.4 percent increase on the East Coast as a while.  

The Maryland Port Administration (MPA) said the port has recently seen turn times rise to 80 minutes for a double move, which account for most terminal traffic, up from the 60 minutes that had been fairly constant in the past.

In the long term, the MPA says, a gray or interoperable pool is the goal. The Maryland Motor Truck Association also holds the same conclusion. Truckers worry that moving the depot off terminal could simply mean longer truck moves to pick up and drop off chassis, pushing up drayage costs.

Moving chassis off of marine terminals a growing trend

The port’s move follows similar moves at other ports — including the Port of New York and New Jersey, where the chassis have moved from all the main terminals, and several West Coast ports. Both Los Angeles and Long Beach have put out requests for proposals looking for projects to remove chassis from terminals, and the Northwest Seaport Alliance of Seattle and Tacoma is also mulling a plan. Oakland, which is evaluating at a range of port developments, also has looked at an off-terminal chassis depot.

Shifting chassis off a marine terminal, especially at ports with multiple terminals, is seen as a way of reducing truck trips through a congested terminal gate, especially in a situation in which a trucker may need to drop off a chassis at one terminal and pick another up at a different terminal.

New York-New Jersey’s removal of the chassis off the terminals is seen by some stakeholders, and the Port Authority of New York and New Jersey, as one reason that concern over chassis delays and congestion at the port has subsided in recent years.

The port’s share of the East Coast loaded TEU market dipped from 3.7 percent in 2010, to 3.4 percent in 2017, but ticked up to 4.4 percent in the first quarter of 2018, according to PIERS figures.

The MPA called the first three months of 2018 its “best quarter ever,” with increases in container cargo, general cargo, and vehicles. The MPA said Baltimore handled 156,991 containers during the quarter, a 14 percent jump over 2017, a record year for containers at the Port of Baltimore. The authority, which counts loaded and unloaded containers, said volume grew 73 percent between 2010 and 2017.

Bayard Hogans, general manager, Ports America Chesapeake, said he did not expect the move to the off-terminal chassis depot to increase the amount of time truckers take to pick up or collect chassis, adding that he could not “speculate” how it would impact the cost of moving cargo. Hogans said the move would free up about 10 acres of the 200-acre terminal.

“There is definitely time associated on the terminal today with chassis moves,” he said. “I don’t think there will be delays. I think that it will be a better chassis solution off dock. And there will be some benefits to that, of putting out a better product.”

Dave Thomas, MPA’s deputy executive director, said the new depot is just one-eighth of a mile from the terminal, and the fact that the depot will be focused solely on chassis should improve service. For example, inspections for roadworthiness will be done in advance of the pickup, he said.

Still, Thomas said, the port, similar to others around the country, believes that “at some point we have to go to an interoperable, open choice, gray, whatever you want to call it, [pool]. That’s the arrangement to be able to get better chassis utilization and better service for truckers.” The removal of chassis off the terminal is “a kind of first step,” in that direction, he said.

Truckers wary of potential impacts

Truckers questioned how much impact moving the chassis pool would have to improve service.

Louis Campion, president and CEO of the Maryland Motor Truck Association, said truckers understand that the chassis depot relocation is an effort to manage growth, but added that “there are significant concerns that this is only going to shift current on-terminal delays to an off-terminal site, that it will result in additional truck movements that require further driver compensation, and will drive up the price of doing business at the port.”

Armand Patella, senior vice president of Picorp, Inc., a Baltimore-based intermodal equipment company, who is chairman of the association’s Intermodal Council, said he hopes the shift will help mitigate the impact of unpredictable import volumes coming through the port.

“We have experienced periodic shortages and surpluses of chassis,” he said. “Our membership expects this to continue as the IEPs [intermodal equipment providers] continue to wrestle with proper inventory levels, looking for the proverbial, ‘sweet spot.’”

One issue that hurts truckers is the ocean carriers’ reduction in free time allowances for both demurrage and per diem schedules, which can “have a negative impact on all links in the chain,” he said. In response, truckers scramble to evacuate to remove cargo from the terminal, he said. “These loads then sit at BCO locations and create higher than normal utilization of chassis which in turn, creates a shortage as the loads await stripping,” he said.

Ron Joseph, senior vice president and chief operating officer at Direct ChassisLink Inc., one of two chassis providers at the pool, said the company is “constantly evaluating fleet size as the market has grown, and [we] feel our current supply is appropriate for the market size.”

“Quality of our assets is well recognized by the trucking community in Baltimore, primarily because of the new build chassis we added a few years ago,” he said.

Contact Hugh R. Morley at hugh.morley@ihsmarkit.com and follow him on Twitter: @HughRMorley1.