The Wheels on the Chassis Go Round and Round … Not

Truck chassis sit at a shipping terminal.

With the current focus on the tens of thousands of containers stuck on ships outside major U.S. ports, it’s easy to forget a maxim of supply chain management: If it’s not on wheels, it’s not moving.

Equally important as the big steel boxes that carry virtually every type of consumer product imaginable is the set of wheels — the chassis — that ferry them between modes and to final destination. And chassis today are in seriously short supply where they’re needed most.

A significant number of chassis are stuck beneath containers, both empty and loaded, parked in yards awaiting trucks to haul them away. Others are awaiting maintenance or repair, or squirreled away at some undisclosed inland site.

“The fleet wasn’t made to accommodate this level of cargo volume,” says Mike Wilson, chief executive officer of Consolidated Chassis Management LLC (CCM), which oversees a nationwide pool of “neutral” chassis, available for rental to all shippers and motor carriers. Dwell times have lengthened considerably in recent months, he says, with the period between a chassis leaving the yard and returning for reuse going from 5.2 days to around 12 days.

Wilson hesitates to apply the word “shortage” to the present-day state of affairs. With cargo backed up from ports all the way to inland points, it’s more than a matter of adding equipment. “If we were able to pump in another 100,000 chassis,” he says, “they would more than likely end up under boxes parked at a distribution center or warehouse yard, just like currently.”

Chassis have been a sore point with shippers and transportation providers ever since ocean carriers began shedding ownership of that asset more than a decade ago. Today, says Wilson, approximately 40% of the operating marine chassis fleet is in private hands, dedicated to particular logistics service providers, while 60% is operated in pools such as that of CCM. A handful are controlled by shippers themselves, although that model is difficult to sustain without sufficient volume to justify the investment.

The problem of accessing chassis has been in the making for a long time, well before the current congestion triggered by factors arising from the COVID-19 pandemic. And the mix of ownership options hasn’t made the situation any easier to puzzle out. When ocean carriers divested their chassis, many of the units were sold to leasing companies that have moved increasingly toward the use of proprietary equipment.

Wilson believes the concept of interoperable pools to be the better direction for chassis provision in the years ahead. “It’s the most efficient way to operate,” he says. “To be able to put any chassis under any box, and drop off at any facility, gives flexibility to motor carriers. You don’t have to go hunting for specific chassis.”

Still to be determined is the long-term impact of today’s congestion on chassis provision methods. Wilson hopes it will cause shippers and logistics providers to embrace the neutral approach. “With the right collaboration and dialogue, we can move in the direction of more interoperable pools,” he says, claiming that this approach is yielding efficiencies at major hubs around the country.

The challenge for all logistics providers is to manage the natural peaks and valleys of demand that characterize most supply chains. That’s another reason why simply expanding chassis fleets won’t solve the problem. “No chassis model is going to manage a surge such as we’ve seen, regardless of the model itself,” Wilson says. “The church isn’t built for Easter Sunday; to invest in excess capacity is far too expensive.”

The solution lies in making better use of the chassis that are already in service. Wilson estimates that 80% of them are sitting idle in parking lots. To free up that equipment, some containeryards are creating grounded operations, whereby containers are stacked and the wheels freed up for reuse. Most major marine terminals have adopted that model, but it’s not necessarily the case at inland rail ramps.

Better tracking technology is helping to speed up the maintenance and repair of chassis, which are being equipped with GPS and telematics devices that not only specify location of the equipment, but also the condition of brakes and tires, and whether there’s a container atop the unit.

None of that is of much help in loosening the current logjam, but the crisis is likely to focus more attention on how logistics providers and shippers can use technology to better manage a limited fleet of essential equipment. “It still needs a lot of R&D,” says Wilson, “but the next five years are going to see some real interesting developments.”