Ocean carriers, ports want to grow the South Atlantic Chassis Pool

Dive Brief:

The Ocean Carrier Equipment Management Association and three Southeast U.S. port authorities want a single company, Consolidated Chassis Management, to operate the largest chassis pool in the country beginning in October 2023.
CCM would grow the South Atlantic Chassis Pool to about 85,000 chassis from its current 60,000 over the next seven years and lower the pool’s utilization rate to between 73% and 75% to improve availability, CEO Mike Wilson said in an interview Tuesday with Supply Chain Dive.
The pool, which serves the ports of Savannah, Jacksonville and Wilmington and inland facilities in the region, would focus on interoperability, Wilson said. "A trucker can pick it up in Savannah and drop it in Atlanta, or pick it up in Charlotte, and drop it off in Wilmington. It gives the user complete flexibility as to how to use that chassis."

Dive Insight:

The seven-year memorandum of understanding, which includes an additional five-year option, is subject to a review by the Federal Maritime Commission. It has not yet been filed, and Wilson declined to share the exact details of the arrangement.

But if approved, it would change how the South Atlantic Chassis Pool is operated.

CCM would still manage the pool. But instead of chassis-leasing companies contributing equipment to the pool and dealing directly with truckers, shippers and ocean carriers, CCM would lease the chassis from the owners, contribute them to the pool and set publicly available rates. Those haven't been announced yet.

"We base the price of the chassis on the cost, not based on somebody trying to generate a profit," Wilson said. "It's more about a longer-term-style investment."

Chassis demand has surged to handle record cargo volumes. The Port of Jacksonville handled a record 1.4 million containers in FY2021. The Georgia Ports Authority announced plans to increase its container capacity by 60% after already reporting a 20% increase in TEUs in the 2021 calendar year. The Port of Wilmington handled 324,145 TEUs in the fiscal year, a 40% increase from 5 years prior, spokesperson Christina Hallingse said in an email.

The pool's next iteration, South Atlantic Chassis Pool 3.0, would be "responsive to swings in chassis demand, providing cargo customers throughout the Southeast with a reliable chassis supply to meet their evolving needs," Jaxport CEO Eric Green said in a statement.

Jeffrey Lawrence, executive director of OCEMA, which represents 10 major ocean carriers and owns the pool through a subsidiary, said in a statement the public-private effort would provide port users and the ports with "access to the most resilient, efficient, and environmentally sound regional chassis fleet in the U.S."

The new system would create a single contact for pool members in search of a chassis and centralize the responsibility for improving chassis supply during periods of high demand. As part of the deal, CCM would refurbish the current fleet and add telematics and other equipment, Wilson said.

"This is really an evolution in chassis provision, in my mind," Wilson said. "It takes the best of the proprietary pools, which is asset control, quantity of chassis, and quality control, in terms of the condition of the chassis, [and puts it] into the control of one manager in one regional pool."

Griff Lynch, executive director of the Georgia Ports Authority, said in a statement the new pool setup would "refurbish and replace chassis to improve fluidity and keep pace with the tremendous container trade growth across the South Atlantic."

The need for chassis will only grow alongside the number of ships calling East Coast ports as an end-around to West Coast congestion. The route from Asia is expected to see a "staggering" 40% increase in capacity this year, Alan Murphy, CEO, Sea-Intelligence, wrote in a post Tuesday.

Murphy wrote the surge "increas[es] the likelihood that the East Coast ports will also start to feel the stress of additional cargo."

Clarification: The headline on this story has been updated to note the pool is expected to grow under Consolidated Chassis Management.