Chassis: The Unsung Linchpin in the Global Supply Chain

Chassis: The Unsung Linchpin in the Global Supply Chain

Bethany Stich (University of New Orleans, USA), James Amdal (University of New Orleans, USA) and Peter Webb (University of New Orleans, USA)
DOI: 10.4018/978-1-5225-7396-8.ch003

Abstract

International trade requires efficient delivery between exporter and importer, usually by ocean vessels. Roughly 90% of cargo is transported in shipping containers, delivered for export by truck or rail, then received at the importer to be similarly discharged. This chapter discusses containerized trade, focusing on international chassis, the wheeled shipping container bed. The authors discuss the invention of containerization and give the historical context for US chassis provision. The chapter outlines the chassis logistical difficulties of US truckers. An overview of attempts to solve this by chassis pooling is provided. The chapter then addresses differences between chassis in the US and the rest of the world. Key chassis regulations are covered, followed by a discussion of the relation of chassis to sustainability. Antitrust issues concerning the main chassis providers and the three recently created ocean carrier alliances are covered. The authors conclude with three recommendations for improving US chassis access.
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Background

Traditionally, ocean carriers (the companies which own and operate the container ships) provided international chassis in the US as part of their pricing package (Tioga Group, Incorporated, 2011). That is, the cost of the chassis was included in the price the ocean carrier charged the domestic trucking companies for bringing the containers to, or taking them from, the ocean vessels. However, recent recession-related shifts in international chassis management are creating gridlock at key transportation hubs, financially rewarding international ocean carriers while overburdening domestic motor carriers (trucking companies), and artificially inflating the cost of transport.

Key Terms in this Chapter

Containerized Shipping: The practice of transporting cargo internationally in shipping containers of standard lengths of 20, 40, and 45 feet.

International Ocean Carriers: The companies which own and operate container ships.

Twist Locks: Locking which fastens a container on the chassis.

Ocean Container Chassis: Another name for international chassis.

Chassis Lessors: The collective term for chassis leasing companies. The three main chassis lessors are TRAC Intermodal, Flexi Van Leasing, and Direct Chassis Link Incorporated (DCLI).

Carrier Haulage: When the charge made for drayage, including the chassis, is handled by the ocean carrier. In the US, larger shipping companies use carrier haulage, and often do not pay separate chassis fees. The smaller ones do.

Intermodal Equipment Providers (IEPs): Lessors of chassis and other shipping equipment.

Longshoremen: A type of dockworker. Longshoremen work for Stevedores, loading and unloading ships and maintaining/repairing chassis

Beneficial Cargo Owner (BCO): The owner of a cargo which is shipped.

Triaxle Chassis: Chassis for 20' or 40’ containers with three axles and a center that slides out, allowing for either size of container. This allows for better weight distribution and hauling of heavier containers.

Shipping Containers: Rectangular metal boxes in which cargo is transported by sea, rail, truck, and rarely, air.

On-Time Distribution Point: A destination for freight which is then sent off to be further processed or assembled with other components so that all the freight arrives simultaneously.

Pooling: Chassis lessors negotiate an agreement where all lessor-owned international chassis in the pool are available at terminals that are doing business with it.

Intermodal Drayage: The truck portion of movement of containers between the port and an inland destination

Breakbulk: Cargo which is not moved in shipping containers, but rather transferred to and from ships piece by piece by gangs of dockworkers.

World Customs Organization (WCO): An intergovernmental body which guards and enforces the legitimacy and legality of international trade.

Uniform Intermodal Interchange and Facilities Agreement (UIIA): Standard contract governing the interchange of intermodal equipment between ocean carriers, railroads, equipment leasing companies, and intermodal trucking companies.

International Maritime Organization (IMO): An agency of the United Nations which oversees the safety of global shipping.

Bobtail Tractor: A tractor truck with no chassis attached.

International Chassis: Standardized international chassis designed to be readily interchangeable for use with the internationally standardized 20’, 40’, and 45’ shipping containers.

Ocean Liner Chassis: Another name for international chassis.

North American Chassis Pool Cooperative (NACPC): A chassis leasing company organized by motor carriers and providing premium chassis pools consisting of high-end chassis with radial tires and LED lights.

Chassis: A special type of truck trailer/undercarriage developed specifically to facilitate roadway-based transportation of domestic and marine shipping containers.

Vessel Sharing Agreements (VSAs): Arrangements whereby the major ocean carriers consolidated into three alliances. Each carrier in an alliance shares its vessels with the other members of that alliance.

Wheeled Containers: Containers stored on chassis. This facilitates movement of containers onto ships and rail cars but leads to much higher use of terminal space and more emissions.

Ocean Carriers: The oceangoing vessel lines which carry shipping containers. They have recently merged into three alliances.

Shipping Companies: Legal entities in the business of moving freight.

Roadability: The condition of a chassis being safe for road use.

Equipment Interchange Report (EIR): The report a driver issues at a terminal when the driver checks the condition of inbound and outbound equipment, especially chassis.

Legacy Contracts: Exclusive contracts put in place between chassis lessors and international ocean carriers to ensure that all the carriers’ chassis would be used. Renewal of these contracts has led to a legacy of exclusivity, and in many cases, the international ocean carriers are mandating which chassis lessors can be used by the truckers.

Anti-Trust Legislation: Laws to protect trade and commerce from unlawful restraints and monopolies or unfair business practices.

Ocean Carriers Equipment Management Association (OCEMA): A US association of 15 main ocean carriers who oversee the operational safety of US intermodal ocean freight transportation. It is licensed by the FMC.

Turn: A complete move of a truck to drop off and pick up a container and/or a chassis. Truckers are paid for turns picking up or dropping off containers, not switching out chassis.

Federal Maritime Commission (FMC): The federal body charged with oversight of international ocean freight in the US.

Ocean Carrier Chassis: Another name for international chassis.

Stevedores: A type of dockworker who usually owns the equipment for breakbulk vessel loading/unloading, and maintaining/repairing chassis, and who employs longshoremen for these purposes.

Motor Carriers: Trucking companies which are hired by shipping companies.

Domestic Chassis: Chassis designed specifically for use with 48' and 53' length domestic shipping containers.

Freight Logistics: The process from loading the container with a given freight cargo to final delivery.

Container Ships: Ocean and river-going vessels specifically designed to carry shipping containers. The ocean-going vessels are getting larger every year.

Trip Leg: A movement of a truck tractor in intermodal drayage. It can be dropping off an empty container, loading or unloading a full container, or hooking/unhooking a chassis.

Marine Chassis: Another name for international chassis.

Intermodalism: Use of a standard storage unit (the container) to be used on a train, a truck (with chassis), or on various sized vessels.

Chassis Leasing Companies: Owners of fleets of chassis, which lease them to shipping companies, which then rent them to their various trucking companies.

Gray Pool: A neutral chassis pool, in which several chassis lessors all provide the chassis together under a neutral management agency. Truckers doing business with a gray pool are free to lease any chassis belonging to any of the lessors in the pool. This gives truckers some degree of choice of which chassis to use.

Drayage: Moving goods by truck.

Merchant Haulage: Drayage arranged by the cargo owner, using their standard trucking company, which is responsible for arranging the chassis.

Grounded Containers: Shipping containers utilized at terminals in which they are stacked without chassis attached. This is the global practice, and differs from the US practice of Wheeled Containers.

Marine Terminal Operators (MTOs): Those who provide the necessary docking, wharf operations, warehousing, etc. to ocean carriers.

Open Choice: Motor carriers and truckers are free to choose their own chassis based on market rates and convenience rather legacy contracts.

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