Insights - July/August 2017 - 9

Consolidation among ocean carriers could be the most
effective way to increase street turns, Hilsenbeck said.
A focus on truckers also is a necessity, others said.

Trucker Focus Needed
According to Hilsenbeck, "Chassis utilization really comes
down to every drayman's individual business style," which often
is defined by whether its operations are repetitive - in and out of
the same location. Fleets that run to many inland locations where
terminals are "wheeled" have a different approach, he said.
Lane touted the value of shifting to more trucker-controlled
chassis, since he believes it will spur demand for more robust
asset tracking and utilization. Improved information availability
also is opening up a market for more use of brokerage services
for draymen to cope with the shortage of drivers.
Hickman said the software company's trucker partners prefer
to own their own chassis because that can help to improve utilization, though there is some reluctance to take that step because
flip or swing charges can increase costs.
Hickman said the intermodal industry's next advancement
needs to be faster movement of information to truckers, particularly for equipment availability at port and rail terminals, which
can improve utilization.
Anderson cited complexity in the billing process, which often
arises when the equipment provider isn't sure who to bill as the
chassis starts moving. To counter that, Chassis Finder, which is
part of Milestone Equipment Holdings, requires that users certify
they are the billable party when they use the equipment.
"Adding new equipment could be an answer, but it's expensive
versus considering other options such as shorter-term leasing
during high demand," Anderson said. Chassis Finder created a
platform with an alternative that posts chassis for daily or brief
period rentals.

Truckers: Utilization, Acquisitions Both Needed
Truckers embrace both utilization and equipment acquisitions.
"The North American Chassis Pool Cooperative strongly
supports one thing that helps utilization for everyone," said Dave
Manning, who is chairman of the four-year old pool and president
of TCW. "That is the gray pool. It is still the way to go," he said,
with growth from new and existing participants alike.
Pools need to be enhanced, he said, with specs for radial
tires, anti-lock brakes and LED lights that also will aid utilization,
particularly because time-consuming and costly tire failures have
been cut by more than half when radials are used instead of bias
ply tires.
A key issue for future growth is trucker choice for chassis

use, rather than a mandate from a leasing company/ocean
carrier agreement. "The trucker is paying the bill," Manning said.
"Getting the chassis should be their choice, not the steamship
line's because it's their particular box."
Companies such as SalSon Logistics and Milestone have
been adding chassis to their fleets this year.
Sam Farruggio, president of Farruggio's Express, said international equipment utilization has improved, though there are still
concerns. An important one, he said, is that chassis providers
say they aren't making money, raising the question of how long
they'll want to stay in the business.
"We have had to become better stewards of how we book and
manage [international] freight," Farruggio said. Friday international
deliveries are shunned because the carrier doesn't want to pay for
the chassis over the weekend while it sits at a customer's dock.

Lower Costs Essential
The continuing push to lower intermodal drayage costs also
is affecting the long-term picture, he added. The prospect of
continually lower rates and depressed return on investment in an
unsettled market discourages motor carriers' acquisition of chassis, which can boost utilization.
"I'm not sure it is worth a major chassis investment until
we know where we are going as an industry, and shippers or
BCOs are willing to re-establish longer-term relationships," he
added. "You can't pay $13,000 for the right equipment when
you only have a one-year contract with customers. That kind of
investment just doesn't work."
American Intermodal Management
CEO Nathaniel Seeds stressed the
importance of talking with truckers
about chassis, saying the company
decided, after multiple conversations
with drivers and mechanics, on brake
and light designs for their units that
would last longer and be easier to
repair. "They are mundane things, but
the improved physical characteristics
Seeds
make for a better piece of equipment for
motor carriers," Seeds said, and also improve utilization.
One of its equipment features is a GPS mounted sensor to
track when use begins, loads are mounted or dismounted, and a
software addition that attaches the container number to the AIM
chassis.
Seeds explained why information linking chassis and containers matters.
"As important as it is to know where the chassis is, the BCO is
more interested in where the container is," Seeds said.

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July/August 2017 | Intermodal Insights

Table of Contents for the Digital Edition of Insights - July/August 2017