Shippers write to FMC in support of Georgia and South Carolina port authority proposal.
Shippers and other stakeholders have written to the Federal Maritime Commission (FMC) to express support for last week’s announcement by the Georgia Ports Authority and South Carolina Ports Authority that they are planning to create a container chassis pool, the Southern States Cooperative Pool (SSCP).
In a letter to the FMC, the Agriculture Transportation Coalition said, “Lack of a dependable supply of truck chassis for containerized shipments constitutes a barrier to U.S. agriculture and forest products exporters” and that the two ports have “are making a commitment to set aside competitive agendas in order to find a solution.”
The ports filed a request with the FMC to form an agreement so that they could work jointly to “discuss, evaluate and reach agreement” with third parties to create the pool. They said other ports, such as Wilmington, N.C., and Jacksonville, Fla., also could join the agreement at some future date.
Griff Lynch, executive director of the Georgia Port Authority, said last week that the ports want to seamlessly take the existing South Atlantic Chassis Pool, which operates in the Southeast, and transition it into the SSCP.
South Atlantic Chassis Pool is one of six chassis pools operated by Consolidated Chassis Management (CCM), a company that is owned by 15 ocean carriers and controls around 120,000 chassis, 53,000 of which are located in the Southeast United States. The chassis are owned by both ocean carriers and leasing companies.
In an interview with American Shipper, Jon Poelma, president and chief operating officer of CCM, said details still need to be worked out, but his organization is supporting the new pool. “We feel good about it. We’re excited to be involved,” he said.
Lynch said the two ports will work with the South Atlantic Chassis Pool, trucker-led North American Chassis Pool Cooperative (NACPC) and CCM to design a transition process.
He said NACPC, which last month added 1,000 chassis to the SACP, would add 7,000 to 10,000 chassis eventually. Depending on how quickly the plan moves forward, the additional chassis could help alleviate shortages during peak season this year.
Poelma said that he expected eventually NACPC will end up having either ownership or leases on all the equipment in the pool.
TRAC Intermodal is one of the leasing companies that is a long-time contributor to the current South Atlantic Chassis Pool managed by CCM.
“We’ve contributed close to 15,000 TRAC chassis to support our customers’ shipping needs in the SACP,” said Keith Lovetro, president and chief executive officer at TRAC Intermodal. “As the current pool shifts to the new Southern States Chassis Pool (SSCP), TRAC Intermodal will continue to support the growth in the South Atlantic Ports by upgrading all of our currently contributed chassis to include radial tires, LED Lights and ABS braking systems. A large portion of these upgrades will be made with our Refurbished chassis which include not only radial tires, LED Lights and ABS but also include new brakes and airing systems, new electrical wiring harnesses and are painted with anti-corrosive TRAC Blue paint. We’ve also offered to add an additional 3,000 newly manufactured chassis to the pool to help ensure that the ports have the needed supply of chassis to support their anticipated growth.”
AgTC believes the port agreement will result in improved quality of chassis, and as a grey pool “address the artificial shortages of chassis, which is the result of the current system under which multiple owners/operators limits access of shippers to their proprietary chassis.”
Peter Friedmann, the executive director of AgTC, said in an interview with American Shipper that if carriers want to exit the chassis business, the new pool would provide a way for them to do so.
He said that exporters are concerned not only about the poor quality of equipment and lack of chassis, but also that container carriers may not impose a chassis charge on their “champion” importer accounts when they provide delivery to inland points, but charge exporters, especially smaller exporters, a charge for equipment.
The fact that South Carolina and Georgia — two of the most vigorous competitors in the port industry — are cooperating shows how badly an improved chassis pool is needed, said Friedmann.
“A substandard quality chassis fleet is a further disincentive to truckers serving the South Atlantic port industry,” said Lawrence Grooms, the chairman of the South Carolina Senate’s Transportation Committee. The proposed new pool “addresses this need that will last for generations to come.”
Georgia Governor Nathan Deal also wrote to express support for the new chassis pool, telling the FMC “It is my hope that you look favorably upon this proposal.”
Poelma said chassis in the United States “have been aging and it is time to upgrade the fleet and put new assets in.”
Klaus Schnede, manager of North American marine at Eastman Chemical, told the FMC, “We strongly believe this is the way of the future. The current chassis situation in the Southeast is unsustainable and requires change.”
Scott Hyde, senior logistics manager at Rayonier, told the FMC that “the original pool established in 2006 for the Southeast was adequate as a first step when the ocean carriers quit supplying chassis. However, the pool has not kept up in size with import/export growth and the chassis quality had deteriorated during this time.”
He also said, “Establishment of this pool is needed in order to upgrade the safety and reliability features from the chassis pool in place today.”
Scott George, the chief executive officer of the trucking company TCW, said the “current quality of chassis is unacceptable and unsafe. Most of the equipment in both ports is outdated and equipped with bias ply tires and incandescent lights and without anti-lock brake systems.”
He said costs for current chassis are too high. “We currently pay $7.90 more per day for a poor quality chassis than we will under the proposed SSCP.”
Robert Stephenson, a vice president at TCW, told the FMC creating a true grey chassis pool “will allow us to better predict costs, as opposed to the current model in which the billing party for the chassis is determined by what marine carrier box is on top of the chassis upon out-gate from the port.”
“Available road-ready chassis are an issue today,” he said, especially when large containerships carrying more than 12,000 TEUs are being worked at the port. He said adding 10,000 chassis or more “will improve our turn times significantly, as today we waste a great deal of driver on-duty time waiting in chassis yards or in M&R (maintenance and repair) lines trying to obtain a road-ready chassis to perform a pickup from port.”
Better equipment would reduce wait times and also help attract drivers to the port trucking industry, he added.
Could the new pool be a model for similar ones around the country?
“Let’s just say people will be watching it,” said Poelma. He noted a port-led chassis pool has been operating in Virginia, and while not without problems, “it allow the ports to have control their chassis destiny better than a cooperative pool.”
Chassis pool plan draws praise
