New chassis business model would cut costs, trucker says

From the Journal of Commerce –

Long Beach – Truckers and beneficial cargo owners (BCOs) could save almost 50 percent on daily rental fees for chassis if the industry would agree upon a common model that allowed the party paying for chassis use to choose the equipment provider, according to a national trucking representative.

Dave Manning, president of TCW trucking in Nashville, Tennessee, and incoming chairman of the American Trucking Associations, said, for example, that his cost for use of a chassis from the trucker-controlled North American Chassis Pool Cooperative, of which Manning is president, is $12-14 per day. However, if a trucker is instructed by a shipping line to use a chassis from an intermodal equipment provider (IEP) it designates, as often happens when carriers are involved in the transaction, the daily rental fee can be $20.

“If you are paying for the chassis, make sure you can pick the provider of your choice,” Manning told the annual Agricultural Transportation Coalition conference Thursday in Long Beach.

Probably the main obstacle standing in the way of a smooth chassis regime is the decision by most carriers to stay tangentially involved in equipment decisions for container moves they control through their ocean contracts with BCOs. In those moves, the shipping line includes the cost of the chassis in the all-in charge for ocean move plus delivery of the container to the customer’s door.

In the United States, there was basically one chassis mode from the beginning of containerization in the 1950s until 2009 – ocean carriers owned the chassis, stored them at marine terminals, and provided them to BCOs along with the containers. In 2009, Maersk Line announced its decision to exit the chassis business. It formed a new company known as Direct ChassisLink Inc. to own, maintain, and provide chassis to customers.

Other carriers over the ensuing years began to pull out of the chassis business, and then on March 1, 2015, the three major IEPs in Los Angeles-Long Beach formed a neutral, or “grey” pool of pools with about 80,000 chassis that are interoperable, meaning a chassis can be picked up or dropped off at any location by users of the pool. Other pool arrangements have been formed over the years at different locations throughout the United States.

Truckers generally agree that of all the models, the grey chassis pool is the most versatile in the options it offers and the operational inconveniences it eliminates, and therefore preferable, at least in meeting their needs. “We believe this is the answer,” said Donna Lemm, executive vice president of IMC Companies in Memphis.

In reality, though, the gradual exit of about 20 ocean carriers from the chassis business since 2009 has not gone smoothly. Arrangements vary from region to region, and chassis shortages and surpluses occur too frequently in major harbor complexes. Truckers complain that the national fleet, which Lemm estimates as having an average age of 19, has too many unsafe or out-of-order chassis. “This thing is a mess,” she said.

The problem with the current system, from the prospective of truckers, is that for moves controlled by a particular shipping lines, truckers must use only the chassis owned by the equipment provider with which that shipping line has a business relationship. That equipment works against truckers that own or lease their own chassis, which is becoming more popular in the industry. In another common scenario, the shipping line instructs the trucker to use a particular IEP-owned chassis, but the terminal where the inbound load is located may not have that IEP’s chassis on hand, so the trucker has to go to another site to retrieve an acceptable chassis, sometimes without compensation.

Manning said another residual impact to truckers is that each carrier has a business arrangement with an IEP that provides the shipping line with a discounted price for the door moves that it controls. To compensate for lost revenue, the IEPs increase the price of other chassis that are used in “merchant haulage” in which the BCO controls the move. “The shipping lines continue to increase their merchant haulage rates,” he said.

There is no single solution to this condition as long as ocean carriers choose to remain at least partially in the chassis business, but Manning advised truckers to begin by approaching the carriers directly and explaining the inconveniences and extra costs their policies are creating. He said that in many instances carriers will respond with an acceptable arrangement.

If that does not work, truckers, possibly through their associations, can approach the Federal Maritime Commission or the Department of Justice. Manning said Congress may also be interested in the issue as it reviews the Shipping Act. Truckers can also tell their story publically to the press, or, if needed, consider lawsuits.

In Southern California, another strategy is being considered. Weston LaBar, executive director of the Harbor Trucking Association, said the ports of Los Angeles and Long Beach are actively exploring the feasibility of encouraging the removal of chassis from marine terminals, which would free up more land for cargo-handling. This could happen if the ports are able to locate enough parcels in the massive port complex for establishment of common chassis storage depots. If enough suitable properties can be repurposed for these start-stop operations, sufficient chassis from all of the IEPs in the pool of pools could be made accessible for truckers within the general harbor area.

After 38 Years, David Formella is Still Trucking

When David Formella started driving at age 20, he couldn’t imagine he’d stick with trucking for nearly 40 years. His tenure is evidence that anyone dedicated to learning a new career can succeed in it for a lifetime. Case in point – when he started, he didn’t even know how to drive a truck! With time — and driving lessons — he discovered a career (and a company) that he’s loved for decades.

“With the number of changes I’ve seen over the years in the trucking industry, one thing has remained the same: the freedom and beautiful scenery you experience on the open road.” – David Formella

With help from DNJ owner Joe Tovo, Jr., David was able to get a handle on maneuvering big rigs. Over the next four decades, he witnessed he company’s expansion across the Midwest and the growth of technology in the cabs he’s driven. “Back when I started, you didn’t have phones or computers in your truck with you. A payphone was your best friend.”

Now, drivers communicate more easily and quickly, thanks to cell phones. What’s more, dispatchers monitor weather and traffic to determine the best route for a driver’s destination. They also utilize in-truck technology to keep track of deliveries via satellites and GPS.

This also allows the driver’s focus to stay fixed on the road ahead, which David says is most important for a lasting career in trucking.

“As a driver, you must be mindful of others on the road and always try to expect the unexpected. Safety is key, especially if you want to drive for as long as I have.”

His commitment to staying safe on the road has allowed him to go home every night for as many years as he’s dedicated to DNJ.

Technology is essential to the future of drayage

IMC Companies’ Chairman Mark H. George spoke to JOC.com in late 2016 about the future of drayage as the industry faces major change on the ocean carrier side and the importance of technology investment as well as his company’s Northeast expansion plans. To view this interview visit the Journal of Commerce.

DCLI to Raise Chassis Fees; Trucking Response Mixed

Direct ChassisLink Inc. will raise daily chassis rates it charges truckign companies to haul contianers from ports in the Southeast, Gulf Coast and Midwest beginning Dec. 15, following similar increases from Trac Intermodal and Flexi-Van Leasing Inc. this summer.

DCLI will raise rates 50 cents in the Southeast and Gulf Coast to $19 and $19.50, respectively, and 75 cents in the Midwest to $20.

To read more, visit Transport Topics.

Trans-Pacific cargo rolled on spot rate strength and late peak-season surge

US importers are riding an increase in rolled cargo, as trans-Pacific eastbound spot rates hold at levels at twice that of some contracted prices and vessel utilization inches up on a late peak-season surge.

While the increased freight rates provide a measure of relief to an ocean carrier industry that is expected to loose as much as $10 billion globally this year, it is uncertain how much longer the current peak-season conditions in Asia-US trade will last. Some carriers are telling shippers that cargo will keep getting rolled through the month, while others are warning to expect spot rate cargo to gain preference over contracted cargo into November, a handful of US importers told JOC.com.

To read more, visit the Journal of Commerce.

IMC Companies Completes National Footprint with Acquisition of Progressive Transportation Services

Memphis-based IMC Companies is adding another top-tier company to its family of brands. Effective July 1, California-based Progressive Transportation Services (PTS) has become part of IMC Companies, a national leader in intermodal logistics. PTS will continue to serve customers throughout the entire west coast market, and will now operate as part of IMC Companies.

This brings the number of brands under the IMC Companies umbrella to nine including Atlantic Intermodal Services (AIS), DNJ Intermodal Services (DNJ), Frederick Intermodal (FI), Gulf Intermodal Services (GIS), IMC Global Solutions (IGS), Intermodal Cartage Company (IMCG), National Drayage Services (NDS), Ohio Intermodal Services (OIS), and now Progressive Transportation Services (PTS).

“A desire to expand our geographic footprint led us to do an extensive search over the past two years to find the right company to give us an established presence in California,” said Mark H George, Chairman of IMC Companies. “We vetted more than 25 companies and chose PTS above all based on their stellar performance record, service offerings and core values that are aligned with those of our organization.”

With locations in Los Angeles, Oakland and Stockton, PTS is an industry leader in California and is the largest container drayage company headquartered in Long Beach, CA. The company also provides container transloading and warehousing services. The acquisition of PTS completes IMC Companies’ national footprint as it can now handle freight in any major rail or port facility in the entire United States. With this acquisition comes the addition of all PTS facilities, rolling stock and the company’s 250 team members. This brings the employee count for IMC Companies to more than 2,000 team members across the nation dedicated to providing international supply chain solutions.

For more information on Progressive Transportation Services, visit www.progressive-transportation.com.

About IMC Companies:
IMC Companies is a national network of intermodal logistics businesses providing an array of services including container drayage, customs brokerage, truck brokerage, freight forwarding, warehousing, chassis provisioning and secured container storage. To learn more about IMC Companies family of brands, visit www.imccompanies.com.

From ‘a desk and a telephone’ to $300 million in revenue

Despite having more than 2,000 employees in multiple cities and close to $300 million in revenue, Mark George, chairman of IMC Cos., attributes his business’ success to one simple thing:

“Being in the right place at the right time with the right idea has a lot to do with the success of IMC,” George says.

To read more, visit the Memphis Business Journal.

IMC Companies opening Ohio unit

IMC Companies is launching Columbus-based Ohio Intermodal Services to provide container drayage services in the Ohio Valley.

IMC chairman Mark George tapped Barry Bernard to lead the new company. Bernard came on board at IMC in 2013 when the Memphis-based intermodal logistics company bought Express America Trucking Inc., which Bernard started in 2000.

To read more, visit, the Commercial Appeal.