The ocean carriers have been for years trying to end their stake in the “trucking” business in North America. With carriers working hard to return to profitability and with the trucking business perceived as a liability, getting out is not an option but a necessity. But beyond the ocean carriers, what’s next?By Stas Margaronis, AJOTOcean carriers are ending their ownership of chassis used to transport ocean containers to and from U.S. ports and shifting that ownership to trucking companies and chassis pool owners in a move that will save carriers money, but create a new burden on truckers. The American Trucking Association (ATA) newspaper Transport Topics noted in a November 29, 2010 issue that ocean carriers used “new, tougher federal safety rules related to chassis safety “ as a reason to exit the chassis business and change the business model to make truckers provide the chassis needed to move the boxes. And that has prompted major changes for intermodal carriers, who have found themselves grappling with transition-related troubles ranging from tires to inadequate storage space to funding. Seven smaller ocean carriers (now eleven-see below) have followed industry leader Maersk Line in getting out of the container supply business. Now, in order to move containers, intermodal freight lines must rent, lease or purchase them. There are four important impacts of this move:
  • The move increases the financial burden on owner operators who need the chassis to perform the truck drayage of containers to and from ports.
  • It outsources jobs currently being done by longshore workers doing maintenance and repair on the docks and shifts those jobs to chassis owners and truckers at off-dock locations.
  • Also it creates a new profit center for chassis owners who lease to truckers, such as Maersk.
  • Inevitably, it raises freight costs to shippers.
Bud Turri, president of Tighe Drayage in Oakland, California in an interview with AJOT said, “The bottom line here is the customer is going to pay more, because the trucker is going to pay more. As of the first of the year, we are going to buy a couple of chassis to keep in the yard. The problem is that you can only use them if you have something like a container to put on top of it. A flat bed has a better dual use capability, but we will figure out with our customers how many chassis we need. Maersk does have a chassis pool so with them we can obtain a chassis when we need it, but with the other steamship lines we don’t know. Within six months to a year, I am sure something will be worked out. The problem is whether there will be enough chassis available for truckers and whether we will see shortfalls and delays and for how long.” Unionization Possibility Seventeen thousand owner operator truckers are the target of a Teamster union organizing effort at the ports of Los Angeles and Long Beach. The American Trucking Association is appealing new Port of Los Angeles clean air rules that would require these owner operators become trucking company employees. This would make them eligible for Teamster unionization. At the same time, trucking executives are worried that this unionization campaign will be helped by the higher cost of new chassis ownership to truckers. The reason is that the higher costs for leasing and maintaining the chassis may increase the cost to the harbor drivers to the point where they will seek protection from the costs by demanding trucking companies employ them instead of hiring them as independent contractors. As employees, the drivers could enlist the Teamsters union help in representing them in contract negotiations with the companies. Tighe Drayage’s Bud Turri agrees that the changes could make it more attractive for owner operators to join the Teamsters: “I do agree this added cost could make it more attractive for owner operators to join the Teamsters. As costs go up it gets tougher for small operators to stay in business, and we’re talking about