Chassis providers raise rates as operating costs increase

Dive Brief:

Chassis lessors Flexi-Van Leasing, TRAC Intermodal, and Direct Chassis Link (DCLI) are raising daily usage rates for chassis pools, American Shipper reported Wednesday.
The three chassis providers cite generally increased costs and maintenance needs as a reason for the rate increases, with DCLI citing increased labor costs, specifically.
Meanwhile, the North American Chassis Pool Cooperative intends to retain current rates for both pool and premium chassis, regardless of a rise in labor and inventory fees plus fleet enhancement, according to the report.

Dive Insight:

Chassis are a pivotal piece of the supply chain puzzle, as the Hanjin debacle demonstrated last year.

In September and October of 2016, countless chassis were essentially out of commission, stuck under unmoving Hanjin containers. Stevedores were unable to get access, severely limiting loading and unloading speeds. Port managers were frustrated and impatient as the empty containers sat idle, consuming space. Various suggestions were floated, such as storage in nearby freight yards, but all were ultimately rejected as bad for the surrounding community. The containers simply.....lingered.

In fact, it wasn't until November that Hanjin pledged to retrieve its empties. With more than 4,000 containers consuming space at the port of Long Beach, their promised disappearance was met with relief. Chassis access was clear again, and terminals could operate normally.

Yet, over the past year terminals and chassis providers have been battling over payment and space. Terminals claim chassis pools take up significant real estate they do not pay for, whereas chassis providers argue their services are essential to terminal operations.

Originally, the terminals announced they would charge a chassis usage fee of $5 per entry, exit and storage — a cost which would have cost providers up to $28 billion annually, according to some reports. Although the proposal was soon tabled over outrage, terminals insist they have a right to charge for the real estate used by chassis.

Labor is one factor, but the rate increase is likely also due to this continuing battle as chassis prepare to pay terminals more for operating within their space.