Maersk to Charge Lease Fee for Intermodal Chassis

This story appears in the June 29 print edition of Transport Topics.

The world’s largest ocean container shipping company, Maersk Line, said it will begin charging leasing fees to local truckers who use their intermodal chassis, which traditionally have been free.

The move sparked outrage from motor carriers at the Port of New York and New Jersey, the nation’s third largest, where Maersk said it would introduce the lease charge.

The ocean carrier said June 18 that it would add the yet-to-be-determined lease charge as it forms a container pool at the East Coast port, which it said would encourage better utilization of its chassis fleet and reduce emissions.

“Truckers will be able to utilize the same chassis for multiple moves at different terminals and for different [container] lines, driving out inefficiencies and providing the supply chain benefits that only the user controlling the chassis can deliver,” Andrew Chinigo, a Maersk Inc. vice president, said in a statement. “When fully implemented, it will improve port air quality and reduce port area congestion.”

“I am totally against it,” said Gregory Scott, vice president of operations for BBT Logistics, Newark, N.J. “Steamship lines have asked us for a cut in rates. There are fuel surcharges. Now here we go — another cost is being dropped on the trucker.

“Who’s going to absorb this?” Scott said. “Our customers certainly aren’t going to.”

“I’m the president of a trucking association representing companies that do 70% of the drayage at the port, and I hear about this in a press release,” said Jeff Bader, president of the Association of Bi-State Motor Carriers, Port Newark, N.J. “I don’t think that’s very professional.”

Scott agreed.

“Lo and behold, they are going to change the rules in mid-stream,” said Scott, adding that a port-wide chassis pool with multiple participants and no cost to the truckers could be a workable alternative. “They didn’t even go to us and say, ‘What do you think?’.”

Maersk’s plan initially would cover about 5,000 chassis at the New York-New Jersey port complex and would be the first step toward a nationwide container pool expected to be in place next year. The pool eventually will include 90,000 units and reduce carbon dioxide emission by more than 4,000 tons when it’s in place nationally, Maersk said in a statement.

“The program is being phased in,” Maersk spokesman Dana Magliola said. “We are meeting with truckers, railroads, port officials, terminal operators and labor to make sure the program is well understood.”

A chassis pool operated in Virginia by Virginia International Terminals has reduced empty moves and chassis fleets by 25% or more, the port-affiliated agency said. Savings result from allowing truckers to use pool chassis to carry any ocean carrier’s container instead of having to match up the chassis owner’s box with one of its chassis.

In ports where there isn’t a pool, drivers typically use chassis from the same ocean carrier whose freight they are carrying. Maersk’s plan could allow truckers to use its chassis on other lines’ freight, but would charge them.

Bader said Maersk’s drayage subsidiary, Bridge Terminal Transport, will have a “distinct advantage” because that company will be reimbursed for the chassis lease fee on certain deliveries while others will have to pay the charge for every move, whatever it might turn out to be.

“Reimbursement as far as BTT is concerned is among the details that have yet to be determined as a part of the program,” Magliola said.

Curtis Whalen, executive director of the Intermodal Motor Carrier Conference of American Trucking Associations, expressed concern about the prospect of motor carriers being required by Maersk to take some responsibility for equipment maintenance, which would be contrary to the provisions of the chassis maintenance rules that took effect June 17 (click here for related story).

“It is an important program,” Whalen said, adding that his group supports chassis pools because of their efficiency. “After three years or more, the ocean carrier industry has eight pools with 120,000 units. In one fell swoop, Maersk has added 90,000.”

Magliola said the date of Maersk’s announcement was coincidental to the introduction of the federal rules.

Though they criticized the move, both Bader and Scott praised the quality and efficiency of Maersk’s intermodal operations at the port.

“Members are saying there are still a lot of questions to be answered in terms of the details [about Maersk’s plan],” including cost, Whalen said.

Tom Malloy, vice president of the Intermodal Association of North America, said the industry trade group could not comment on the plan because the details aren’t yet known.

Los Angeles and Long Beach, Calif., are the two largest U.S. container ports.