Chassis Shortage across America

A chassis shortage has been announced at numerous ports across the United States, whether at the terminal on the coasts or railyards in the heart of America.  Some of the affected ports include the Port of LA-Long Beach, Port of New York-New Jersey, Baltimore, Savannah, Chicago, Memphis, Dallas, Saint Louis, and Kansas City just to name a few that affect our clients on a daily basis.

Why the Chassis Shortage?

With the implementation of the ELD Mandate, drivers can no longer pick up an extra load like they were used to doing prior to the regulation, (or even half a load for that matter).  Therefore, units will actually end up setting unused longer.  Along with them are the chassis.  Moreover,  many of the chassis included in the chassis pool are operationally impaired.  So coupled with the ELD Mandate, a large pool of broken chassis, larger volumes of shipments, congestion at the ports and rail ramps, increased street dwell and exiting ocean carriers, it is evident we have a chassis capacity problem in the industry.

Is this seasonal?

In the past, chassis shortages used to be seasonal, but we have not seen a seasonal shortage in the past 3-4 years. Right now, the shortage seems to be a constant.  Why?  Our economy has been booming, which means more containers have been coming in and out of our ports.  Unfortunately, that increase in containers has been using the same pool of chassis as seen in previous years.  So while our volumes in one area were growing, our volumes in chassis pools were actually shrinking due to those that need repair, etc.  On top of that, we are in the middle of the Chinese New Year hangover… meaning the week prior to and weeks after the holiday, shippers and importers play catch up in regards to their volume.

What do you do to prepare or overcome?

When asked, our partner Dave with CR Express replied, “I come in at 4:00 am and jump on the pool sites and secure bookings for as many chassis as I can.  It’s not a fool proof plan as they give out more bookings than chassis, but that is about all you can really do.  Customers don’t want to pay for the lift costs associated with using private chassis depending on the ramp.”  Our other partner, Luigi with R2R Intermodal mentioned, “We keep chassis with us to re-utilize for our next imports. We would rather pay an extra day or two on a chassis than have a driver wait 4 hours at the railroad looking for chassis.”

Suggestions

Be flexible when possible

• Avoid set appointment times.  Shippers and receivers need to understand the industry and how the chassis shortage is impacting the ability for a driver to show up at a particular time. If a hard appointment time is required, it is best to pay for a *pre-pull service to guarantee the chassis and appointment time.  Even then, other shipping nuances can occur and cause delays… such as weather!
• Have flexibility in loading and delivery windows
• Have flexibility in transit time

Consider routing international freight differently

• Talk to an international freight forwarder about your routing options.  What has been working in the past may not be what will work in the future

Share information

• It is important to share as much information as possible from the very beginning of the shipment. Find out what is actually important from the decision makers in your organization. Transit time, cost, your clients’ needs? Service providers can only move forward with the information you give and we all know what assumptions do…
• Give as much as lead time as you can when sharing information.

Be understanding

• Be empathetic and understanding to all involved in getting your freight to its final destination on time.  Capacity is tight. Don’t hold one party alone accountable.  There are many players in the supply chain, so consider every stakeholder touching your freight. In some instances, such things as severe ice storms are completely out of the supply chain control.

*What is a pre-pull?  When is this advantageous?

A pre-pull is necessary when rail free time is about to expire.  A freight forwarder or drayman may choose to pre-pull a client’s container to avoid higher rail storage charges when they cannot find driver capacity to actually deliver the freight or an appointment is required, for example.  The client will still have to pay storage charges at the trucker’s own yard, but they will be a fraction of the cost of the railyard storage fees.  Again, it is most advantageous when trying to avoid rail storage charges or to meet early appointment times. Note, usually pre-pulls and storage fees due to chassis shortages are not agreed upon in advance and are unavoidable when all truckers are having the same difficulty getting chassis for containers.

Why is a chassis required?

In short, to transport the container over the road. The loaded and empty units for international transit do not come with any sort of wheels.  The containers are stacked on top of each other to maximize space on vessels and trains. The chassis allows the unit to be mounted and then transported to the shipper and receiver.

Do dray service providers also include chassis?

This depends on the drayage company and the port.  Our Chicago drayage partners typically include chassis on all shipments. A chassis will also be included at times, when specialized equipment is needed, such as tri-axle chassis for movement of otherwise overweight 20′ units.  Tri-axle chassis is more expensive than normal chassis.  Typically, chassis is paid for per day and can range from $25-35 per day for a regular chassis.  In some cases, chassis rates are included in the drayage move and in some cases are charged separately.

What is a chassis split?  When is it required?

A chassis split is when a container returns or picks up at one location, but that location does not have any chassis on the premises.  Then the drayage company needs to source a chassis from another location to recover said container.