Companies hope to put gray pool in place by beginning of 2015.
The Department of Justice announced Tuesday that it will not challenge a proposal by Flexi-Van Leasing and Direct ChassisLink to enter into a chassis-use agreement at the ports of Los Angeles and Long Beach, allowing the establishment of a “gray” chassis pool and interchange of chassis across multiple pools throughout the port complex.
“Based upon representations made by the applicants, as well as the department’s investigation, the department has no present intention to challenge the proposed agreement,” according to a DOJ statement. “The increased flexibility created by the interchangeability will enhance customer service, improve chassis productivity, and respond to the desire of the Long Beach and Los Angeles ports authorities to achieve better overall utilization of the region’s chassis fleets.”
The non-availability of chassis and congestion at port terminals, particularly in the ports of Los Angeles and Long Beach, were major focuses of discussion at the Intermodal Association of North America’s Intermodal Expo in Long Beach this week, as well as at a forum conducted by the Federal Maritime Commission.
DOJ stated its position in a business review letter to counsel for Flexi-Van and Direct ChassisLink from Bill Baer, assistant attorney general in charge of the Department of Justice’s Antitrust Division.
The 38,000-unit Los Angeles Basin Pool is managed by Flexi-Van and contains chassis owned by Flexi-Van, China Shipping and TRAC, the nation’s largest chassis leasing company. DCLI also manages the GACP pool — the pool for members of the G6 Alliance — and TRAC has chassis in those pools.
DOJ said, “After initial implementation, Flexi-Van and Direct ChassisLink intend that the agreement will become open to other pools at the ports of Los Angeles and Long Beach” such as the GACP and SSA’s West Coast Chassis Pool.
DOJ continued that chassis companies “will continue to compete for business, and leasing terms and rates will continue to be set independently by each chassis provider.” It said no information will be exchanged between Flexi-Van and Direct ChassisLink regarding customer pricing or other competitively sensitive terms.
A third-party provider, International Asset Systems, will be used to facilitate operation of the gray chassis pool, audit chassis usage, and prevent the exchange of competitively sensitive information among the pools and chassis providers.
Phil Connors, executive vice president at Flex-Van, said his company and DCLI plan to hammer out details of the agreement over the next 90 days and have a goal of starting up the operation on Jan. 1.
There will be common points for trucking companies to pick up and drop off containers, and information will be coordinated so repositioning of equipment is controlled.
Under DOJ’s business-review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if it produces anti-competitive effects.
DOJ allows agreement between chassis providers
