Milestone Equipment Holdings plans to nearly double the size of its fleet of mainly new marine chassis to close to 20,000 pieces of equipment over the next 18 months, underscoring the broader effort by some providers to attract truckers and their shipper customers with better fuel mileage, less chances of shipment disruptions caused by breakdown, and reduced repairs.
The company’s fleet expansion is the latest initiative by a chassis supplier looking to create a niche by offering new, or high-end, equipment. The focus reflects, in part, a growing demand by chassis users for an alternative to what some shippers and truckers see as the failings of the nation’s aging chassis fleet, much of which is in the daily rental sector and remains from when ocean carriers began selling their fleets a decade ago.
All three of the main independent equipment providers — TRAC Intermodal, Direct ChassisLink, Inc. (DCLI), and Flexi-Van Leasing — offer premium chassis programs to some degree, as does North American Chassis Pool Cooperative. TRAC, for example, said that it is adding 700 new chassis to the Port of New York and New Jersey in May, and DCLI is adding 1,200 new chassis to its fleet nationwide and refurbishing 500 chassis. Flexi-Van is also expected to add new and refurbished chassis this year.
Premium chassis: radial tires, LED lights, anti-lock brakes, and more
Premium chassis pools generally have radial tires, LED lights, and anti-lock brake systems. Milestone, with less than two percent of the US marine chassis market of about 540,000 chassis, argues that leasing a new chassis can be more cost-efficient than leasing a renovated or refurbished chassis.
Milestone says that maintenance costs for new company chassis in a Chicago-Ohio pool were about 70 cents per day, or less than one-sixth of the $4.50 per day maintenance cost of a typical chassis in the pool. The company in one analysis found that maintenance costs for a refurbished chassis were just under half the cost of a regular pool chassis. The company said that repair and maintenance costs — depending on the lease contract — are sometimes picked up by the user.
In addition, a new chassis with radial tires offers more efficient fuel consumption, according to the provider. And the far greater reliability of new chassis means that truckers are less exposed to the possibility of a chassis breakdown leaving a driver and cargo stationary by the side of the road.
The impact of such breakdowns has increased significantly in recent months, as the electronic logging device mandate has limited the hours at the wheel of some drivers, and driver shortages have placed a premium on efficient use of a driver’s time. Using quality chassis and other equipment also can help in retaining, and attracting, drivers in a market in which they are increasingly difficult to come by.
Douglas H. Hoehn, executive vice president of chassis and managed assets at Milestone, said that the company opted to provide new chassis from when it first moved into the sector, seeing that “the average chassis age is getting to be quite high.” At the time, 75,000 marine chassis in the United States were 25 years or older, he said.
The company’s challenge is to show customers that quality equipment can save money in the long run, he said.
“We are not going to be the cheapest guy out there, our rates are not going to be the lowest,” Hoehn said. But customers “are starting to understand what that total cost is. It’s not just a daily rate. It’s the maintenance, the operations, the breakdowns.”