Midyear Drayage & Chassis Report
Special Report
Shippers and truckers say they still face limits despite the FMC ruling in favor of chassis choice . Shutterstock . com
O ’ Malley said it ’ s due to the rise of shippers opting for merchant haulage where their nominated trucker provisions the chassis on their own rather than using one supplied by the ocean carrier .
“ The truckers wanted the ability to use their own chassis ,” O ’ Malley said . “ We are trying to compete for every merchant haulage box . There have been dramatic decreases in the merchant haulage business we ’ re getting because there are private chassis being used .”
“ We ’ re looking for as much choice as possible , or for ocean carriers to get out of the business entirely .”
Val Noel , chief operations officer at Trac Intermodal , said their merchant haulage business is now less than 30 % of total revenue due to more truckers using their own chassis .
“ Our merchant haulage business is being picked off with private assets ,” Noel said .
Affirming chassis choice
In February , the FMC upheld an administrative law judge ’ s decision that ocean carriers and their interoperable chassis pools stop any business practices that limit motor carriers ’ ability to use the chassis of their choice . While the Ocean Carrier Equipment Management and Evergreen Marine have asked the FMC to reconsider parts of the ruling , Noel said as long as it ’ s agreed to in the contract of carriage , “ you have the choice of any chassis you want .”
Even so , there are instances where truckers are delayed because they are required to use a pool or IEP ’ s particular chassis , said Steve Schult , vice president of supply chain for Blue Diamond Growers . He cited a February ride-along with a trucker at a Memphis rail ramp in which it took the driver five hours to find the chassis required for the container .
“ At the ports , we ’ re not facing an issue of chassis availability ,” Schult said . “ Today , where we see the majority of issues is on the inland side ,” adding that many of the pool chassis face issues with brakes , lights and roadability .
Brian Kobza , executive vice president at drayage provider IMC Companies , said the confusion over chassis choice stems from some merchant haulage and inland intermodal contracts that include a chassis from the ocean carrier .
“ We ’ re looking for as much choice as possible , or for ocean carriers to get out of the business entirely and not mandate whose chassis we use ,” he said .
From ‘ wheeled ’ to ‘ stacked ’
Hassan Hyder , director of international intermodal at Union Pacific Railroad ( UP ), said UP is adapting to the changing landscape by identifying and segregating containers according to whether they are merchant haulage or carrier haulage , where the ocean carrier mandates a chassis .
Even so , he said the rise of trucker-controlled chassis forces UP and other Class I railroads to rethink their operations . Many of UP ’ s intermodal yards were developed just as ocean carriers sold off their chassis to IEPs like DCLI and Trac , he said .
The thought was that an empty container would already be mounted on a pool chassis for a driver to easily pick up , or that a loaded export could be dropped off along with its chassis alongside tracks and moved quickly to an outbound train .
“ When designing those ramps , we asked stakeholders about whether we should go with wheeled or stacked operations and the unanimous feedback was for wheeled operations ,” Hyder said . “ At that point , private chassis hadn ’ t taken off yet to the degree they have today , and it was all about [ getting ] the trucker in and out .”
To accommodate those private chassis — and overall growth — Hyder said more yards need to switch to stacked operations so containers can be mounted directly on a trucker ’ s own chassis once they arrive . However , stacked operations required much higher capital costs for reinforcing the yard and adding lift equipment .
UP is investing “ hundreds of millions ” to allow stacking operations at its new Kansas City facility , slated to open in 2026 , Hyder said , adding that its Dallas and Memphis operations are the next to be converted .
“ As facilities age out and need improvement , you ’ ll continue to see us go to stacked operations ,” Hyder said .
email : michael . angell @ spglobal . com
20 Journal of Commerce | June 17 , 2024 www . joc . com