Friday, March 13, 2015

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How old school tech intensified West Coast port congestion

Though simple in construct, chassis are a low tech but vital link in moving millions of dollars of electronics, apparel and other goods bound for stores across the nation daily. That flow was disrupted when chassis went missing from the equation recently, exacerbated cargo congestion at the Ports of Los Angeles and Long Beach ports.

Although the recently resolved labor contract conflict between dockworkers and the port employers has earned the most headlines, changes in who manages the chassis have also contributed to gridlock at the ports. The combined results: more than two dozen ships anchored at sea waiting to be unloaded, weeks-long shipment delays and companies diverting their goods to other ports or shell out money to ship products by air.

The congestion has port officials and other stakeholders scrambling for solutions.

This week, three major chassis providers and a terminal operator have put into effect a pool system that would allow chassis to be shared. The Port of Los Angeles was instrumental in facilitating the discussion with chassis companies Direct ChassisLink Inc., Flexi-Van Leasing Inc. and TRAC Intermodal. Between the three companies, they own the majority of chassis with more than 80 percent of the 100,000 or so circulated in Southern California.

"The gray chassis pool, along with other initiatives underway to improve efficiencies, will help our marine terminals move effectively towards restoring cargo flow through this important gateway," said Port of Los Angeles Executive Director Gene Seroka in a statement.

The Port of Long Beach is working on providing its

Photo credit: Scott Varley/Press Telegram

own fleet of 3,000 chassis during peak hours. The pool, which is expected to be operational in June, would aid other chassis fleets when they are overwhelmed with demand.

Although congestion at the ports has been a recent development, the shifting control of chassis has been slowly changing in North America, where shipping lines used to offer chassis as part of their service for years. In ports in other parts of the world, trucking or leasing companies usually own and manage chassis.

After the recession, however, shipping lines started divesting their interest in the trailers to cut costs, selling them to third-party providers who penned separate lease agreements with shipping companies. To pick up the cargo containers, truck drivers need to be pulling the chassis under contract to that particular ship liner or they don’t get their payload.

Further complicating matters are newly formed alliances among shipping companies that load their cargo onto one megaship as a way of saving on fuel and other costs.

For more of the Press Telegram story:

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