ppd 531 final draft

Rebecca Chung Qianyao DuanKarl FieldingTanaya MalhotraAdam MontgomeryRui TuJonathan Yang

Translogic Solutions

Chassis Management at the San Pedro Bay Port Complex:Assessing the Viability of the “Pool of Pools” Approach

University of Southern CaliforniaSol Price School of Public PolicyPPD 531L: Spring 2015 Transportation Studio

FINAL REPORTApril 27, 2015

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AcknowledgementsThis report could not have been developed without the insight and knowledge of many transportation professionals, guest speakers, the Port of Los Angeles and the Port of Long Beach. We would especially like to thank Professor Eric Shen for support, instruction, and guidance in developing this report. In addition, we would like to thank the following individuals:

Alex CherinHarbor Trucking Association

Kathy CulverSenior Supply Chain Manager

Kroger

Jolene HayesSenior Freight Transportation Consultant

Cambridge Systematics

Annie NamGoods Movement Manager

Southen California Association of Governments

Malcolm Daugherty DirectorCaltrans

Will KemptonExecutive Director

California Transportation Commission

Bill MongelluzzoSenior Editor

Journal of Commerce

Dick SteinkePorts Practice Leader

Moffatt & Nichol

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S. Executive Summary 1

I. Introduction 3

II. History of Chassis Management 9

III. Existing of Chassis Management 13

IV. Current Challenges 27

V. Assessment and Recommendation 31

VI. Lessons Learned: Successful Chassis Sharing Examples 55

VII. Alternatives 59

VIII. Stakeholder Implications 61

IX. Conclusion 65

X. Contributing Authors 69

Table of Contents

a. Chassis Asset Ownership and Provision 32 b. Chassis Storage 35c. Chassis Availability 37d. Chassis Inspection, Maintenance & Repair 45e. Chassis Adminsitration 48f. Summary of Recommendations 50

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S. Executive Summary

The opportunity inherent in any new venture is that flexibility exists to readily evolve and adapt to meet the needs of customers or stakeholders. Yet what some may describe as an opportunity, others may describe as a challenge. New ventures often require making difficult decisions, without the benefit of hindsight, that will set the venture on a course that is not so easily adaptable. The recently formed Pool of Pools at the San Pedro Bay ports complex currently sits at that juncture. The Pool of Pools formed to better manage chassis supply with the option to re-main as multiple pools operating within a larger pool, allowing for existing chassis hosting, usage, and contribution agreements to remain in place, or to evolve into a single regional ‘super pool’ that might require all existing agreements to be re-negotiated.

The purpose of this report is to identify which course the Pool of Pools should follow. Through our research and analysis we find that the Pool of Pools should continue with its current operating model of multiple pools with an inter-pool usage agreement. This model provides the benefit of no delay in implementation, increased competition amongst the pools, the continuance of established chassis agreements, and not having to introduce a new third-party pool operator to the chassis agreement negotiations.

Most importantly, the current operating model allows for the Pool of Pools to maintain its flexibility. With so many questions remaining on what is the most effective and efficient model to optimize the supply of chassis, future conditions may require a different market response that might ultimately become a single regional pool. However, as this report recommends, the existing Pool of Pools approach should remain while evolving over the next few years into an even more efficient and effective chassis management system.

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I. Introduction

Image courtesy of Karl Fielding

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The Ports of Los Angeles (POLA) and Long Beach (POLB) are not only integral compo-nents of Southern California’s business land-scape, together they make up the nation’s largest gateway for international trade, accounting for 40 percent of the nation’s import containers and close to $500 billion in cargo each year (Facts at a Glance, 2015). However, the San Pedro Bay ports have gradually lost market share to other U.S. ports and, more significantly, to Canadian and Mexican ports. Increased competition and ongoing operational inefficiencies are placing the Southern California ports at risk of losing addi-tional market share, which would have a serious effect on the regional and national economy. There are many factors that impact the perfor-mance of a port, including the infrastructure at the port and its surrounding intermodal facili-ties, operational processes, as well as labor and environmental policies. The POLA and POLB made global headlines in 2014 due to worldwide shipping delays resulting from a wide variety of inefficiencies. Not only were organizations such as the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Asso-ciation (PMA) involved in labor negotiations and work slowdowns, but the ports were further plagued by delays linked to large vessels clogging ports, a lack of available truck drivers, and issues surrounding the availability of chassis (Vineyard, 2015). With the labor conflict seemingly resolved for the immediate future and ongoing investments in place to improve port infrastructure, attention has now turned to resolving the issue of chassis management. Chassis service at the ports became problematic following the shipping lines’ deci-sion in 2009 and 2010 to liquidate chassis fleets as a response to the low cargo volumes precipi-tated by the global recession (Rodrigue, 2012). Figure 1.1 highlights the change in chassis own-

ership from 2009 to 2013. Equipment leasing providers purchased the majority of the chassis fleet and an ad hoc service model involving mul-tiple pools and specific service agreements slowly evolved. As cargo volumes boomed in the years following the recession, marine terminal oper-ators, truck drivers, labor, and shippers voiced concern over the increasing inefficiencies of the service model offered by the various chassis pools. The issue reached a crisis point in 2014 when a lack of available chassis was identified as a prominent contributor to the congestion at the ports (Mongelluzzo, 2014).

Some media outlets reported of a chassis short-age at the ports, while others claimed the ports suffered from a chassis dislocation problem. In response, the POLA and POLB, along with a key group of stakeholders, formed a Chassis Operations Group in 2012 to develop a more efficient chassis supply model. Partly as a result of the working group, plans were formulated to develop a neutral chassis pool for the ports. Labeled the “Pool of Pools”, the planned neutral chassis pool consists of approximately 81,500 third-party owned chassis that are interoperable, which allows truck drivers to deliver containers and chassis to different terminals even if the owners are not the same (Mongelluzzo, 2015).

Launched in March 2015, the ‘Pool of Pools’ is still in its early stages and questions abound on the appropriate size, management, location, and maintenance of the pool when port operations rebound from the dismal slowdown. Will the pool be able to accommodate cargo volumes at their peak? Would an off-site pool location better suit the storage needs of the terminals? Are there other chassis supply models that would provide more efficiencies and be less costly? While the neutral pool was never expected to be a panacea for the congestion issues surrounding the port, it is expected to provide improved chassis service

Vision

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to the previous model and solve the concerns of shortage and imbalance that plagued the ports in 2014.

Source: Consolidated Chassis Management (CCM) 2014

Figure 1.1 United States Chassis Ownership Change

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In order to accomplish the required analysis and recommendations, this report has a limited and focused structure. Due to the recent “Pool of Pools” implementation, it is not prudent to re-visit the justification for creating a shared chassis resource. Instead, the scope of this report focuses on the existing chassis situation including recent shared resource developments and whether or not this collective approach will meet the needs of the dynamic and growing port complex in the San Pedro Bay. In order to properly assess this particular challenge, a number of different topics must be explored. These include, but are not limited to, the history of the POLA and POLB and their chassis operations, current chassis practices at both ports, challenges facing the industry related to current practice and pro-jected future demand, recommended solutions based on quantitative and qualitative analysis, and viable next steps required for implemen-tation. It should be noted that this report and its recommendations are specific to the chassis management issues facing the POLA and POLB and will not necessarily be directly applicable to other port facilities. However, to the extent that other ports are facing similar chassis challenges, this report could offer a helpful starting point for how other port managers might wish to consider addressing their own circumstances.

ScopeThis report responds to the questions of viability surrounding the “Pool of Pools” and develops quantitative answers to the aforementioned questions of appropriate pool size, management, location, and maintenance. It also analyzes the question of whether previous problems of chassis supply were a result of a shortage, dislocation, or both. With cargo volumes expecting to grow and storage space becoming an ever-increas-ing constraint at the ports, this report closely examines whether the supply of 100,000 chassis in the pool will always guarantee availability, and if not, how and where the pool should be expanded. Additionally, other alternatives to the neutral pool model are explored to determine if a more effective and efficient supply model could be developed. Lastly, recommendations and an implementation schedule accompany the results derived from the report’s analysis.

The recommendations offered by this report are not based solely on quantitative analysis. As with any issue involving various stakeholders with competitive agendas and intertwined histories, data and numbers often cannot elucidate a clear-cut solution. Data is superfluous if the context, history, and stakeholder’s input are not clearly understood. To address this concern, this report also includes a qualitative analysis of the current chassis management in conjunction with the quantitative analysis. The offered recommenda-tions are not based exclusively on numbers, but also take into account the implications for each stakeholder.

Report Objectives

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Reference

1. Facts at a Glance. (n.d.). Retrieved April 9, 2015, from http://www.polb.com/about/facts.asp

2. Mongelluzzo, B. (2014, September 12). Chassis shortage could lead to gridlock at LA-LB, termi-nals warn. Retrieved April 9, 2015, from http://www.joc.com/port-news/us-ports/port-los-angeles/chassis-shortage-could-lead-gridlock-la-lb-terminals-warn_20140912.html

3. Mongelluzzo, B. (2015, February 28). LA-Long Beach, chassis lessors form neutral chassis pool. Retrieved April 9, 2015, from http://www.joc.com/port-news/us-ports/chassis-leasing-companies-agree-formation-neutral-chassis-pool-los-angeles-long-beach_20150228.html

4. Rodrigue, J., Zumerchick, J., Lanigan, Sr, J., & Barenberg, M. (2012). Intermodal Chassis Utiliza-tion: The Search for Sustainable Solutions. Retrieved April 9, 2015, from http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaperjprev3.pdf

5. The Port of Los Angeles. (2015, March 20). About the Port. Retrieved April 9, 2015, from http://www.portoflosangeles.org/about/facts.asp

6. Vineyard, J. (2014, September 25). 5 Factors Causing Congestion at the Ports of L.A. and Long Beach. Retrieved April 9, 2015, from http://www.universalcargo.com/blog/bid/103989/5-Factors-Causing-Congestion-at-the-Ports-of-L-A-and-Long-Beach

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II. History of Chassis Management


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Operation of a Conventional Chassis Management Model During the early days of containerization in the 1960s, ocean carriers or shipping lines operating in the U.S. had full ownership of their chassis. Ocean carriers had their own chassis pools and provided free use of these chassis to truckers for goods transferring and distribution in order to secure market share in the interior of the Unit-ed States. This model was successful in the San Pedro Bay because the POLA and POLB had available land that allowed terminals to store chassis on site and to place containers “on-wheels” instead of stacking them.

The conventional chassis management model was criticised for being unsustainable for the following reasons: 1) inefficient repositioning between inland distribution centers, warehouses and ports needed to return chassis to their own-

Decline of the Conventional Chassis Management Model

ers; 2) raising demand for terminal land due to increased capital investment restricted available space for chassis storage; 3) truckers bringing foreign chassis to the ports causes a redundant flipping process which increases delay. The first change from the conventional free chassis service model occurred in 2009 as Maersk introduced the Direct ChassisLink Inc. (DCLI) program in the Northeast and Ohio Valley, charging truckers for chassis usage. The DCLI program was ex-tended to the San Pedro Bay ports after October 2010 when Maersk announced that it will cease to provide chassis for containerized cargo. Soon after Maersk took the lead in changing the con-ventional management model, other ocean car-riers and shipping lines followed. In April 2010, Atlantic Container Line decided to phase out its chassis service and stopped providing chassis service for trucking companies at any of its port. In October 2010, Hyundai announced that it would stop providing chassis on the West Coast in 2011. In January 2011, CMA CGM had set a timeline for terminating their entire chassis ser-vice by March 2011. In February 2011, Hapag Lloyd announced that it was getting out of the chassis business in April 2011.

Since ocean carriers are getting out of the chassis business, third party - chassis leading company, which provides and manages independent chassis pool separately and charges for usage and man-agement service appears in market. In August, 2010, the first neural chassis pool provider, Direct ChassisLink started extending service to California including San Pedro Bay ports and this landmark agreement accelerates the boom-ing chassis leasing company. In January, 2011 TRAC Intermodal extended its web-based and service covering rentals, leasing and other related

Emergence of the Third Party and the Grey Chassis Pool

Chassis management has gone through four stages:

1) Operation of conventional chas sis management model2) The decline of the conventional chassis management model3) The emergence of a third party and neutral chassis pools4) The beginning of the cooperat ed chassis pools.

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Between 2011 to April 2013, different types chassis pools coexisted at ports lacking of uni-form and collaborative management agreement. The phasing out of ocean carriers and merging in of leasing company in chassis supply failed to balance the demand during this period. Attempt in coordinating between terminal operators, ports, ocean carriers and leading companies has been made under urgent request from beneficial cargo owner. There are many incentives for ports to establish cooperated chassis pool. It allows carriers to divest themselves of a portion of their equipment fleet freeing up both capital and land. Also, the adoption of chassis pools rationalizes terminal operations, improves safety and reduces congestion by minimizing in-terminal moves.

In April, 2013, Ports of Los Angeles and Ports of Long Beach issued RFP for chassis supply model and In 2014, Direct ChassisLink, TRAC Inter-modal, Flexi-Van as well as SSA Marine which control 95 % of the chassis at San Pedro Bay ports reached an agreement to develop a neu-tral or gray chassi pool.The vast majority of all chassis in operation in the harbor will fall under this program. DCLI has approximately 30,000 chassis, Flexi-Van has 19,000, TRAC has 37,000 and SSA Marine 9,000. Pool operators grant the right of overseeing daily logistics and repo-sitioning of the whole chassis pool by bring in a team consist of each company’s representative. A separate third-party service provider will manage billing and other proprietary information.

The Beginning of the Cooperated Chassis Pools

services to the intermodal drayage community on a short to medium term basis. Flexi-Van also entered the market and adds chassis leading service at the same time. According to a national chassis ownership survey by Circa, leasing com-panies’ market bumped increased from 65% in 2011 to 87% 2014.

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References

1. Patrick Burnson (2015), Ports of LA/LB launch container chassis scheme, Retrieved from http://www.logisticsmgmt.com/article/ports_of_la_long_beach_launch_container_chassis_scheme

2. Bill Mongelluzzo (Oct, 2014), Four chassis operators agree to form pool at LA/LB, Retrieved from http://www.joc.com/port-news/us-ports/port-los-angeles/four-chassis-operators-agree-form-pool-la-long-beach_20141031.html

3. Marc-Andre Roy, TRB annual conference (Jan, 2015), Evolving US chassis supply market, Re-trieved from http://www.cpcstrans.com/files/4914/2141/9799/Roy_Marc-Andre__-_Evolving_US_Chassis_Market.pdf

4. Hanh Dam Le-Griffin and Tomas O’Brien, (May 2013), IMPACT OF STREAM-LINED CHASSIS MOVEMENTS AND EXTENDED HOURS OF OPERATION ON TERMINAL CAPACITY AND SOURCE-SPECIFIC EMISSIONS REDUCTIONS, Retrieved from http://cite-seerx.ist.psu.edu/viewdoc/download?doi=10.1.1.410.3542&rep=rep1&type=pdf

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III. Existing Chassis Management


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The Conventional ModelPerhaps the most common model found in the U.S., chassis in the conventional model are owned or leased by ocean carriers. All management and operational activities such as “chas-sis procurement, demand / supply, maintenance, logistics and administration” (p.25, TRB, 2012) are carried forward by the ocean carrier as well. A master transportation facilities agreement would be made between the marine terminal and the ocean carrier with regards to storing, inspecting, maintaining and repairing the chassis.

Although ocean carriers have the option of owning their own chassis supply, recent study indicates that ocean carriers prefer leasing chassis instead. However, the transition to leasing chassis can be challenging as it requires ocean carriers to dispose of their current assets (Roy, 2015). Furthermore, the increasing costs associated with chassis ownership and management and the growing concerns from government on safety and roadability has led ocean carriers to re-evaluate their position in the realm of chassis management (Rodrigue, Zumerchik & Ogard, 2012).

In Southern California, Evergreen Shipping Agency (America) Corporation (Evergreen Lines) is the only ocean carrier that currently operates under this model with approximately 8,000 chassis. Motor carrier that use chassis owned by Evergreen Lines are expected to pay use charges on a per-diem basis if they exceed the standard free time, as shown in Table 3.1. These detention charges and free time are for motor carriers that have an origin (or destina-tion) at POLA or POLB.

Source: High Mountain Transport LLC, 2014

Currently, the San Pedro Bay ports are served by four different chassis supply models: the Conventional Model, Cooperative Pool, Neutral Pool, and Terminal Pool. Each of the models operate differently with respect to its ownership, operations and provision of chas-sis (Transportation Research Board [TRB] 2012). The following section would provide a more in-depth description of the four models.

Table 3.1: Equipment Detention & Free Time for Chassis within Los Angeles or Long Beach, California

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Unlike the conventional model, the cooperative pool is a shared fleet among a group of contributors. Each participating member is required to contribute their own chassis to the pool based on their cargo volumes (Le-Griffin & O’Brien, 2013). Non-ocean carriers (e.g. leasing companies) can be part of the chassis supply model and this arrangement is known as the Unitary Pool Concept (UPC). The purpose of the cooperative pool model is to enable synergy among ocean carriers and more effectively utilize chassis (Wilson, 2011). In terms of management and operation, the contributors can make a joint decision to hire a management company to carry forward activities such as chassis procurement, mainte-nance, and logistics (TRB, 2012). A detailed facilities agreement is also required to articu-late the rules associated with storage, inspection, and maintenance (TRB, 2012).

There are three cooperative pool models currently operating in Southern California: the Grand Alliance Chassis Pool (GACP), Los Angeles Basin Pool (LABP), and New World Al-liance (NWA). GACP owns a total of 12,000 chassis with Hapag Lloyd, NYK and OOCL as the primary shipping line members. The chassis found in this pool are located at the Yu-sen Terminal (Berths 212 -225) at the POLA, Long Beach Container Terminal (LBCT, Pier F at POLB) and International Transportation Service (ITS, Pier G / J at POLB). LABP has the largest chassis inventory of 35,000 chassis with numerous participants (see Table 3.2). The chassis in the LABP are located at West Basin Container Terminal (Berths 100 – 102, 121 – 126 at the POLA), ITS, Total Terminals International (TTI, Pier T at POLB), and Pacific Container Terminal (PCT or Pier J at POLB). Lastly, NWA has the second largest chassis pool with 24,000 chassis with APL, HMM, and MOL as participants. The chassis are distributed among terminals such as Pier 300 / Eagle Marine (Berths 302 – 305, at POLA), California United Terminals (Pier 400 at POLA) and TRAPAC (Berths 136 – 147, at POLA). A summary of the different cooperative pools are provided in Table 3.2.

Each cooperative pool formulates its own standard free time and detention charges per day to the motor carriers. Based on the Uniform Intermodal Interchange & Facilities Access Agreement (UIIA), ocean carriers usually provide 5-10 working days of free time to the motor carriers (High Mountain Transport LLC 2014). This means that motor carriers can utilize the cooperative pool chassis for free within that duration. However, once past those days, motor carriers are charged per calendar day between $6.00 and $52 per day if not returned to the agreed-upon location (High Mountain Transport LLC, 2014).

Regional Cooperative (Co-op) Model

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Table 3.2: Cooperative Pool Providers at San Pedro Bay Ports

Source: Translogic Solutions, 2015

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The Neutral ModelAlso known as “grey fleet” chassis, the neutral pool supply model is owned, managed and operated by a third party. Ocean carriers and motor carriers pays on a per diem rental rate that encompasses the physical asset (chassis), maintenance, repair and insurance (TRB, 2012). However, it should be noted that repositioning of the chassis is not included in the rental rate. The third party and the terminal undergoes a “hosting contract” where they would articulate the rules associated with chassis storage, inspection and maintenance (TRB, 2012).

The main neutral pool that operates in Southern California is Direct Chassislink, Inc. (DCLI) with a total of approximately 11,000 chassis. The common participants of DCLI include Maersk, Horizon and Safmarine. DCLI charges a rental rate which is invoiced directly to the users (motor carrier or ocean carrier). A summary of the current market rental rates for DCLI nationwide are illustrated in Table 3.3. As of January 1, 2015, it cost $20.25 per day to rent a chassis from DCLI in the Pacific Southwest region.

Source: DCLI 2014

Table 3.3: Current Neutral Pool Market Rates

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The Terminal PoolIn the terminal pool supply model, marine terminal operators provide their own chassis pool. The purpose is to offer flexibility and provide convenience to their users (e.g. ocean and motor carriers). Terminal pools operate either like a neutral pool where the terminal owns and operates the chassis, or like a cooperative model where the marine terminal rep-resents the ocean carriers in managing the pool. What makes this supply model unique is that a facilities agreement is not necessary as the terminal operator has oversight of both the terminal and the pool (TRB, 2012).

The West Coast Chassis Pool (WCCP) is the terminal pool for the San Pedro Bay ports complex with a total of 9,000 chassis in their inventory. As of December 1, 2012, the chas-sis rental rates were $14.00 per day for motor carriers. The rented chassis are to be returned to the “terminal of origin” which is either SSA Terminal – Pier A at POLB or PCT (Pier J) of POLB (“West Coast Chassis Pool, Chassis Agreement”, 2012).

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Summary of Existing Chassis ManagementThe following Table 3.4 and Figure 3.5 summarizes the current San Pedro Bay chassis supply models. Overall, there are approximately 100,000 chassis being utilized by the Los Angeles region. The cooperative chassis supply model (GACP, LABP and NWA) makes up 72% of all the chassis inventory, leaving only 28% of the chassis inventory to other supply models (DCLI, WCCP and Evergreen).

Table 3.4: Current San Pedro Bay Chassis Models

Figure 3.5: Chassis Inventory by Providers

Source: Port of Long Beach, 2014


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Existing Chassis Management AnalysisThis section evaluates the existing chassis management system at the San Pedro Bay ports complex and identifies whether there is a shortage of chassis supply among each of the port terminals. The findings from this section will not only contribute to our understanding of chassis movements at POLA and POLB container terminals but it will also enable us to make effective and feasible recom-mendations in later sections.

The current system of chassis operations can be understood through the basic economic principles of supply and demand. The supply is dependent on what is currently being contributed by the different chassis supply models. As mentioned previously, the San Pedro Bay ports complex has approximate-ly 100,000 current chassis supply among the various models. The demand for chassis, on the other hand, is dictated by the consumer market which is analogous to the number of containers the POLA and POLB export and import on a daily basis. The difference between the supply and demand will indicate the container terminal performance with regards to effective chassis utilization.

Estimating Existing Supply of Chassis

Methodology

In a simple chassis movement, one would assume a truck would enter the terminal, pick up the chassis, receive the container and exit the terminal. Figure 3.6 illustrates the typical truck movement at the ports when there is a common chassis. In reality, however, the sequence of truck moves can be extremely complicated and would vary depending on the type of chassis supply pool, terminal opera-tions and job order given by the motor carrier (Le-Giffen & O’Brien, 2013).

Source: Le-Griffin & O’Brien, 2013

Figure 3.6: Truck Movement with a Common Chassis

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Due to the complexity of chassis supply movement, the following assumptions were made to simpli-fy the analytical procedures: -The total number of chassis supply found in each terminal are consistent every month. By keeping this value constant, we will be able to identify whether or not the San Pedro Bay Ports have a short-age in chassis.-It is assumed that chassis are only situated at Terminals that facilitate containerized cargo move-ments. Hence, only thirteen major (13) Terminals at San Pedro Bay Ports were taken into consider-ation. This however, does not preclude the fact that chassis are being stored in terminals that are not taken into consideration. Much rather, the purpose of this is to reduce the complexity of the analy-sis.-The total number of chassis supply for each terminal was distributed based on the total number of inbound and outbound truck lanes the terminal has. Truck lanes were utilized because of its strong relationship with the number of the chassis each terminal requires. The greater number of truck lanes indicates greater trucker volume and ultimately, a greater chassis volume. For example, Pier T has a total of 45 truck lanes and all the terminals combined has a total of 337 lanes (inbound and out-bound). Pier T would be proportioned to 13% (45 out of 337) of the 100,000 total chassis supply, which is 13,354.

Results

Based on the assumptions, Table 3.7 summarizes the distribution of 100,000 chassis among the 13 major terminals found at the San Pedro Bay ports complex.

Table 3.7: Number of Chassis for Each Terminal at San Pedro Bay Ports Complex


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Table 3.8: Assumptions for Calculating Chassis Management

Estimating Existing Demand of ChassisMethodology

The demand of the chassis per terminal is derived from the number of twenty-foot equivalent units (TEUs) that are handled by the POLA and POLB. As indicated in the previous section, the monthly TEU experienced by the San Pedro Bay ports varies on a monthly basis. The purpose of the analyses is to identify the peak months in which both ports encounter a large surplus or shortage of daily chassis supply.The following Table 3.8 summarizes the assumptions and methodology that have been used to deter-mine the existing demand of chassis.


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Results

With these assumptions, the amount of chassis (surplus and shortage) for each month was calculated for the POLA and POLB. An example of the chassis analysis for the month of December 2014 is shown in Table 3.9. A negative net chassis movement at the terminal indicates a shortage of chassis supply while a positive value indicates a surplus. In the month of September 2014, the San Pedro Bay ports experienced a shortage of 5,486 chassis. Pier T at POLB experienced the most shortage of 1,815 chassis and APL Terminal at POLA experienced a surplus of 362 chassis. Although a shortage of 5,486 chassis does not seem to be significant compared to the 100,000 supply of chassis (5%), it does have an overall negative impact on terminal performance. Inefficient distribution of chassis supply can affect the system operation times and further exacerbate the air quality, which will be discussed more in later sections (Le-Griffin & O’Brien, 2013).

Table 3.9: December 2014 Daily Chassis Supply for San Pedro Bay Ports

The monthly surplus or shortage of chassis for POLA and POLB in 2014 are illustrated in Figure 3.10 and 3.11, respectively. For the POLA, it is evidential that the port has inadequate supply of chassis for eleven months out of the twelve. The range of chassis shortage varies between 1,299 in the month of December 2014 to a high of 7,326 chassis shortage in September 2014. The only excep-tion is February 2014 in which a surplus of 3,802 chassis is generated.


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Figure 3.10: Port of Los Angeles Chassis Management for Year 2014

Figure 3.11: Port of Long Beach Chassis Manage-ment for Year 2014

Figure 3.12: Overall Shortage of Chassis at San Pedro Bay Ports in Year 2014

Similarly, the POLB also experiences significant amounts of chassis shortage. With the exception of March, all the months in 2014 experience a chassis shortage that ranges from a low of 1,416 in Feb-ruary and a high of 7,651 chassis shortage in September. The overall chassis shortage for both ports is illustrated in Figure 3.12.




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Despite the 2014 Port Issues, historic trend from the past five years indicate that the shortage of chassis supply is expected to grow in the coming years. Although there are instances in which the port would experience spike of chassis surplus, the average net chassis movement is still well within the negative range. To further exacerbate that already lack of chassis supply, the increase in container volume in the future would pose a significant problem. Figure 3.15 shows the potential increase in container volumes over the next three years.

With the recent 2014 Port ILWU dispute, one would question the validity of the quantitative anal-ysis. The data may not be an accurate representation of the chassis operations. Hence, similar chassis management analysis was conducted for 2010 to 2013 to see if there has been historically a trend of chassis shortages. Figure 3.13 and 3.14 illustrate the daily chassis usage (quartiles) at the Port of Los Angeles and Long Beach between the years of 2010 to 2014, respectively.

Trending Shortage of Chassis Supply

Figure 3.13: Trending Shortage of Chassis Supply at POLA

Figure 3.14: Trending Shortage of Chassis Supply at POLB

Figure 3.15: San Pedro Bay Ports Forecasted 3 Year Demand

Source: Translogic Solutions, 2015 Source: Translogic Solutions, 2015


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Reference

Le-Griffin, H. & O’Brien, T. (2013). Impact of Stream-Lined Chassis Movements and Extended Hours of Operation on Terminal Capacity and Source-Specific Emission Reductions. Metrans Trans-portation Center USC and CSULB. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?-doi=10.1.1.410.3542&rep=rep1&type=pdf.

Myer Mohaddes Associates. (2001, June). Ports of Long Beach / Los Angeles Transportation Study. The Port of Long Beach and the Port of Los Angeles. Retrieved from http://www.polb.com/civica/filebank/blobdload.asp?BlobID=7969.

Port of Long Beach. (2014). TEUs Archive Since 1995. Retrieved from http://www.polb.com/eco-nomics/stats/teus_archive.asp.

Port of Los Angeles. (2015, February). Historical TEU Statistics (by calendar year; includes monthly data). Retrieved from http://www.portoflosangeles.org/maritime/stats.asp. West, R. & Thammiraju, R. (2010, November 1). Ports of Los Angeles and Long Beach Year 2010 Marine Terminal Gate Surveys. [Draft Memorandum]. Oakland, CA: Cambridge Systematics.

Roy, M. (2015, January 14). (Still) Evolving US Chassis Supply Market, Port Drayage and Chas-sis Management [Presentation Slides]. TRB Annual Conference: Washington, DC. Retrieved from http://www.cpcstrans.com/files/4914/2141/9799/Roy_Marc-Andre__-_Evolving_US_Chassis_Mar-ket.pdf.

Rodrigue, J., Zumerchik, J. & Ogard, E. (2012). The U.S. Transition to a Motor Carrier Supplied Marine Chassis: Operational Impacts On and Off Terminal. Retrieved from http://people.hofstra.edu/jean-paul_rodrigue/downloads/TRB%20Chassis%20Paper%2080112%20FINAL.pdf

High Mountain Transport LLC. (2014, January 10). UIIA Equipment Providers Free Days and Per Diem / Use Charges. Retrieved from http://highmountaintransport.com/Per%20Diem%20Docu-ment.pdf.

Le-Griffin, H. & O’Brien, T. (2013). Impact of Stream-Lined Chassis Movements and Extended Hours of Operation on Terminal Capacity and Source-Specific Emission Reductions. Metrans Trans-portation Center USC and CSULB. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?-doi=10.1.1.410.3542&rep=rep1&type=pdf.

Wilson, M. (2011). AAPA Operations, Safety, and Information Technolog Seminar Terminal Ef-ficiency Best Practices – Chassis Pools. Hamburg Sud North America, Inc. Retrieved from http://www.aapa-ports.org/files/SeminarPresentations/2011Seminars/11OpsSafetyIT/Wilson_Mike.pdf.

West Coast Chassis Pool. (2012). West Coast Chassis Pool, Chassis Agreement. Retrieved from http://www.emodal.com/common/motorcarrier_wccpchassisagreement.pdf.

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IV. Current Challenges


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In the United States, chassis have historically been owned and supplied by shipping lines at lit-tle or no cost. With shipping lines moving out of the chassis business in recent years, the question of who will now provide the chassis has emerged.

As discussed in previous sections, the goods movement industry has been adapting from ocean carriers providing customers with chassis equipment and bundled services at a low price to the transfer of chassis assets and management to leasing companies. The burden of responsibil-ity for the chassis supply has now shifted on to truckers and shippers. One of the bigger chal-lenges faced by truckers in chassis management is an inevitable waste of time and money delivering a container at one terminal and a chassis some-where else. For this reason, terminals frequently run short of chassis during busy periods. Out-of-service chassis and billing problems have also become recurring issues.

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In addition to terminals, distribution centers also face a chassis utilization problem. While contain-er storage at terminals is a mixture of wheeled and stacked, reach stackers (or cranes) are not available at distributions centers. Thus, the choice for a truck driver is to wait for unloading and return with the empty chassis, or leave the chassis for unloading at a later time via the more prevalent drop and leave, pick and go option (Rodrigue, J. Et al., n.d.). This results in many missing chassis in the system, and months pass before they can be used again. Another utiliza-tion issue that surfaces is no daily fee assessment, since the need to get the empty chassis back to the terminal takes a backseat over other supply chain priorities.

Terminals witness an increase in marginal cost for chassis storage as volume increases. Empty chassis are parked, stacked or racked, which require a chassis stacker and operator (Rodrigue, J. Et al., n.d.). Although parked chassis terminals require neither, they need greater capital invest-ment in terms of land and labor used for track-ing and managing the fleet, including searchers to locate chassis and containers parked incorrect-ly by drayage drivers.

Additionally, a tremendous growth in ship sizes has coincided with disengagement of ocean carriers from chassis management. This, coupled with the increase in carrier alliances, has created strain on the chassis management system. Thus the biggest challenge facing the chassis industry is how to evolve into and maintain a new, more effective model of chassis supply.

Current ocean carriers, many of who have no plans to further invest in chassis, believe the chassis supply pool is moving towards a transi-tion phase as carriers continue to divest in chassis operations. This transition is anticipated to create three major challenges: asset disposition, com-mercial considerations and motor carrier invoic-

ing accuracy (Roy, M., 2015).

One of the other stakeholders involved in chas-sis management is the beneficial cargo owner (BCO). From their perspective, the primary chassis challenge is cost and service. The BCO’s concern originates from the fact that the poten-tial for higher costs could substantially alter their management methods. Additionally, as per data from the Transport Research Board (TRB), the BCOs rate themselves as least able to operate a chassis pool and prefer the status quo (Roy, M., 2015). The motor carriers, collectively, also pre-fer the status quo and believe the transition away from ocean carriers providing chassis would not only create billing inefficiencies but also would not contribute to increasing productivity. Ad-ditionally, the initial cost of chassis and parking and storage requirements would be big hurdles to chassis pool ownership for both BCOs and motor carriers.

Public agencies and planning organizations, on the other hand, have more varied outlooks and interests. Port authorities favor the chassis man-agement transition while state planning agen-cies and metropolitan planning organizations (MPOs) perceive it from a broader perspective and have concerns ranging from land use plan-ning for storage and maintenance to increased truck traffic and congestion.

Largely, the short and medium term chassis chal-lenges point towards pooling which would have policy and planning implications in terms of land use, truck congestion, off-terminal storage and many others. In the long term, the various challenges associated with chassis supply can be addressed through coordination with different stakeholders while accounting for their various interests, influences and regional discrepancies.

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Reference

1. Rodrigue, J. et al. (n.d.). Intermodal Chassis Utilization: The Search for Sustainable Solutions. Retreived From http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaper-jprev3.pdf2. Rodrigue, J. et al. (n.d.). Intermodal Chassis Utilization: The Search for Sustainable Solutions. Retreived From http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaper-jprev3.pdf3. Roy, M. (2015). (Still) Evolving US Chassis Supply Market [ Powerpoint slides]. Retreived From http://www.cpcstrans.com/files/4914/2141/9799/Roy_Marc-Andre__-_Evolving_US_Chassis_Mar-ket.pdf4. Roy, M. (2015). (Still) Evolving US Chassis Supply Market [ Powerpoint slides]. Retreived From http://www.cpcstrans.com/files/4914/2141/9799/Roy_Marc-Andre__-_Evolving_US_Chassis_Mar-ket.pdf

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V. Assessment & Recommendation


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37,000

30,000

19,000

Flexi-Van

Direct Chassis Link

TRAC-Intermodal

Chassis Asset Management and Provision

With an end to fifty years of chassis ownership by shipping lines and a resulting shift in asset financing from Chassis acquirement to ocean going assets like ships and containers, the POLA and POLB currently have chassis pools support-ed by port authorities and leasing companies. Due to the previous lack of coordinated chassis sharing, shortages and dislocations have been surfacing since spring of 2014, sparking a port congestion problem that has been getting pro-gressively worse over the course of time. Howev-er, in an effort to counter the chassis congestion and mismanagement, three major chassis pools serving the San Pedro Bay port complex entered into an agreement effective March 1, 2015. As discussed in a previous section, the three pools involved in this agreement are the Los Angeles Basin Pool (LABP), the Grand Alliance Chassis Pool (GACP) and the Direct ChassisLink Pool (DCLP). The development of this cooperative pool has been a two year process initiated by POLA and POLB. Although they are landlord ports and could not force a solution to the har-bor’s inefficient chassis regime on the chassis pro-viders, the ports acted as neutral brokers to bring the parties together (Mongelluzo, B., 2015).

Commonly referred to as the “Pool of Pools”, this agreement allows their chassis fleets to inter-change between pools on a free-flow basis. It also encompasses a combined fleet of approximately 81,500 chassis with an expanded set of 12 com-mon start/stop locations covering all major ma-rine and rail facilities in the port complex. Under the “Pool of Pools” operation, any chassis in the combined fleet can be utilized and dropped by any party who is an authorized user in one or more of the aforementioned pools regardless of

Figure 5.1 Number of Chassis per Leasing Company in the Pool of Pools


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the markings on the individual unit (FlexiVan Leasing, 2015). This cooperative “Pool of Pools” operation is expected to increase overall availabil-ity of chassis as well as eliminate chassis splits or swaps previously caused by mismatches of users and pools at San Pedro Bay port facilities.With representatives from each of the three pool operators overseeing daily logistics and reposi-tioning of more than 81,500 chassis, this cooper-ative pool will be instrumental in creating a new supply model. Presently, eleven of the thirteen container terminals at the San Pedro Bay ports, as well as the off-dock rail yards, are taking part in the new arrangement. The two remaining ma-rine container terminals utilize their own equip-ment, yet have the option to participate in the future. This asset ownership agreement allows the cooperating pools to remain commercially independent, with each chassis provider compet-ing for business and setting its own leasing terms and rates.

However, since the cooperative chassis pool is interoperable, it requires a third party to perform various chassis usage reconciliation tasks while meeting government regulations on anti-trust, ensuring neutrality and keeping commercial terms confidential (“Port Strategy”, 2015). International Asset Systems (IAS) has taken the responsibility to facilitate this operation and audit cross-pool usage such that the pro-cess remains transparent for users. IAS, which is a neutral body without cargo or asset related interests, connects shipper communities to the goods transport industry. As an intermediary, IAS enables asset providers to easily and conve-niently rent their chassis to their motor carrier partners and other potential chassis users. It also enables easy registration, rental approval agree-ments for motor carriers as well as monitors their rented chassis fleet, view and reconciles chassis rental charges, and facilitates easy downloading of information for billing (The IAS Team, 2015).

It is evident that this model of chassis asset ownership and provision aims for higher effi-ciency and consolidated supply. With proper business rules, data exchanges and support, it can be anticipated that this pooling would ensure an improved form of asset management than prior practices. This system of chassis provision will provide terminal operators and trucking com-panies at the San Pedro Bay ports much more flexibility in obtaining chassis which will ensure reliable cargo operations.

Interoperability of chassis across the terminal complex is expected to reduce time spent in travel to pick up or return chassis, improving motor carrier productivity which will in turn benefit the shipping lines and beneficial cargo owners utilizing the ports. Additionally, marine terminal operators would not be required to seg-regate chassis from the participating pools which, along with greater utilization efficiencies, creates valuable terminal open space in the crowded port area. Recommendations

Based on the above assessment of cooperative pool chassis ownership and provision, a number of improvements would help increase the effi-ciency of the current approach. First, the ports should require complete cooperation as well as participation in the cooperative pool from con-tainer terminals, shipping lines and the trucking community. Additional space should be created to provide for storage and management of the cooperative pool chassis as well as for efficient sorting of cargo. This would reduce wait times for truckers and increase economic output, generating benefits such as increased air quali-ty due to decreased fuel usage while idling and reducing congestion by increasing the efficiency with which containers can enter and exit the

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ports. The success of the cooperative pool model is dependent on ensuring maximum availability, utilization, and value of chassis, as well as min-imizing redundancy, congestion and waste. The POLA and POLB should provide further ad-justments and improvements to this new model while working with existing partners to ensure efficiencies are delivered.

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Chassis Storage

A large number of chassis are still stacked and stored at marine terminals. Chassis pools have increased the efficiency of daily operations through interoperability, but they do not address the inherent inefficiencies of storing, managing and maintaining chassis on-dock. Containers carrying freight generate revenue in the goods movement business, not the chassis used to move the containers. Chassis are only necessary tools for inland haulage. If a container is not being transported, it serves no operational function to be stored on a chassis. The more chassis are used for transporting containers, and not for non-revenue relocation or storage, the greater the ability to drive down chassis costs per intermodal revenue move (Zumerchik, Rodrigue & Lanigan, 2012).

As supply chains became more sophisticated, the nature of temporary container storage at termi-nals has evolved. Instead of container storage be-ing used solely for the synchronization between transport modes, shippers and logistics service providers started to use terminals for cost-free storage of consignments. Now high dwell times of containers are more likely to be attributed to supply chain strategies rather than port terminal operational challenges. One of the reasons is cash flow. The majority of imported containerized freight is controlled by the receiving cargo own-er, and the terms of payment to vendors in many

cases are not cleared until the freight is delivered to the facility. Naturally, receivers want to take delivery of product as close as possible to the date of sale to both improve cash flow and lower inventory carrying costs. Because ports typically give importers five days of free time allowance before demurrage charges, cargo owners benefit with the use of the port container yards as supply chain buffers. It actually can be longer than five free days when the demurrage charge clock of a port does not start until all containers are dis-charged. For instance, the containers unloaded on day one could have a free time allowance of seven or more days. The international container stored long term at marine terminals worsens chassis and container utilization, with the worst case scenario being the supply chain combi-nation of wheeled port terminals (five to eight days) servicing drop/pick cargo receivers (anoth-er 10 to 20 days). Depending on the goods being transported/stored in the container, it is worth noting that cargo owners may be willing to pay the demurrage fees if the additional postpone-ment benefits their strategy. Many international cargo receivers have limited container storage space at receiving facilities, and internal coordi-nation between the transportation department and store fulfillment operations is highly variable (Rodrigue, Zumerchik & Ogard, 2012).

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Current intermodal terminals are landlocked and have limited room for expansion, so there is continual debate on how best to value land in relation to operations. According to an internal study related to the cost of chassis storage at the POLA and POLB in 2007, over 300 acres of useable land was occupied by stored chassis, enough space to house a large shipping terminal. This lack of productive use on high-value land resulted in an estimated annual storage cost of $50-$60 million. Thus, a greater share of users providing their own chassis storage and opera-tions will not only reduce cost, but also increase throughput. Every acre not needed for chassis storage is an additional acre available for con-tainer storage and/or faster selection of customer import containers because less stacking is needed if there is sufficient space. Options for expansion are limited at the ports, and purchasing adjacent real estate is often not feasible because of lack of availability, community opposition, high cost, and the need for environmental remediation (JWD Group, 2003).

As the percentage of chassis provided by the co-operative pool increases, which in turn requires storage of fewer chassis, terminal operators ex-pect to see an improvement in most performance metrics. Terminal operators also feel the land cost (rent) of storing chassis at the terminal even-tually will be passed along to the chassis pools and result in higher per diem lease rates. This is because the current practice of the container yard serving as a supply of “free parking” for terminal customers is effectively giving something away for free that has a significant cost to the provid-er. There are three components to this cost: the direct cost in the form of rent; functional costs of constructing, gating, monitoring, lighting and maintaining the storage area; and the opportuni-ty cost of using the land for some other produc-tive use. (Rodrigue & Notteboom, 2009).

Recommendation

This report recommends that marine terminal chassis storage be kept to a minimum and that off-site, cooperative pool storage be utilized as much as possible. This will free up the more valuable terminal port land for economic ac-tivities and enable the managers of the cooper-ative pool to balance the fleet more efficiently throughout their different storage yards.

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Chassis AvailabilityIn current practices, “the anticipated flow of chassis between the terminals and the rail is discussed every day to determine if repositioning of the chassis will be necessary” (Keever, 2005 as cited in Le-Griffin & O’Brien, 2013, p. 21). Having chassis available at the right time and place is convolut-ed and has been the nexus for chassis shortage at the San Pedro Bay ports (Mongelluzzo, 2014). By exploring new strategies in chassis repositioning, POLA and POLB can take advantage of a series of benefits that include: an improvement in motor carriers overall transaction movement by reducing the time used to wait for an available chassis, better understanding of chassis inventory for leasing companies and more efficient use of terminal space for terminal operators.

Chassis Locations As mentioned previously, chassis will continue to be available for motor carriers at their existing loca-tions under the pool of pools agreement. Motor carrier can pick up and/or drop off bare chassis at 12 different port terminal locations. These locations are listed in Table 5.2:

Repositioning Operation Group With chassis available at so many locations, it is crucial that there are chassis available at the Port Terminals when it is required by motor carrier. Hence, a Repositioning Operation Group (ROG) is being established to facilitate the logistics of chassis management. The group will consist of staff from the three major chassis leasing companies: DCLI, TRAC and Flex-Van. The following section iden-tifies the challenges and opportunities the ROG will face with the new Pool of Pools chassis arrange-ment.

Source: Flexi-Van Leasing, Inc., 2015

Table 5.2: Start/Stop Locations of Chassis

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Roadability Regulation In 2009, the Federal Motor Carrier Safety Administration (FMSCA) implemented the Roadability Regulation, which shifts the liability of the chassis’ condition from the motor carrier to the inter-modal equipment provider, or IEP (Rodrigue, Zumerchik & Ogard, 2012). The purpose of the Roadability Regulation is to establish systematic chassis inspection and provide a means of effectively reporting defective or deficient equipment. To facilitate the administrative process, all chassis being utilized are required to be marked by IEP on the chassis’ bolster and side rails (Consolidated Chassis Management, n.d.). Figure 5.3 illustrates the stencils on the chassis that are being managed by Direct ChassisLink, Inc.

Source: Direct ChassisLink, Inc. https://www.dcli.com/Chassis Identification Although chassis identification is done primarily due to the Roadability Regulation, it can also be leveraged by leasing companies to keep track of chassis availability. By providing additional infor-mation on the chassis, this process will be streamlined for the ROG. Chassis under the Pool of Pools will have stencils corresponding to their associated chassis pool (TRAC Intermodal, 2015). Table 5.4 summarizes the stencils found on each chassis carrier alliance group.

Figure 5.3: Typical Chassis Stencil Identification

Table 5.4: Summary of Stencils Found on Each Chassis Alliance Group

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These labels will ensure a clear demarcation between chassis found in the Pool of Pools and foreign chassis. According to Le-Griffin & O’Brien, foreign chassis are defined as chassis that are found on the terminal premises but are not part of the alliance pool and were abandoned by motor carriers (Le-Griffin & O’Brien, 2013). Currently, foreign chassis are extremely problematic for port termi-nals, motor carrier and the ROG as they complicate the chassis transactions and take up terminal space (see previous section for further information on chassis storage). The use of a chassis identifica-tion stencil can help better manage chassis on terminal by enabling staff to quickly recognize where different chassis belong. Figure 5.5 illustrates how the different chassis identification stencils can be utilized to reduce complexity for the ROG. Figure 5.5: Process of Retrieving Chassis at the Port Terminal

*Particular emphasis is made for chassis leasing companies that operate in a multitude of alliance pools. For instance, Direct ChassisLink, Inc. manages chassis in for Direct ChassisLink Pool as well as Grand Alliance Chassis Pool.


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Inbound and Outbound Gates, Prioritizing on What Matters

To facilitate the ROG’s management process, it is crucial that the terminal operators be rigorous on chassis regulations at the inbound and outbound gates. By having more stringent regulations over foreign chassis, better control can be obtained over which chassis are traversing in and out of the port terminal. This will reduce the number of foreign chassis on the terminal and drastically reduce the time it requires the ROG from searching for the appropriate chassis. Secondly, the ROG should work in conjunction with terminal operators to consider having tempo-rary priority lanes that are strictly for chassis movement. By providing these priority lanes, we can en-sure that the supply of chassis is consistently available for motor carriers. The dwell time at the gates may increase for motor carriers, but the overall dwell time for the entire transaction process can be potentially reduced. Having these lanes are temporary also provides flexibility and increased control for how the terminal operators manage the flow of containers.The following is an example of a scenario that could be implemented at California United Terminals (CUT) at the POLA.

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Case Study of CUT, POLA

One of the bigger terminals at the POLA, CUT on average process more than a million TEUs on and off vessels each year (California United Terminals [CUT], 2011a). To handle such demand and ensure efficiency, CUT has total of 10 and 6 inbound and outbound lanes, respectively. In terms of chassis storage, there is approximately 2.8 acres of area with an additional 1 acre for foreign chas-sis (as defined by CUT, “bad order chassis area”). Figure 5.6 is the terminal map of CUT (CUT, 2011b). The movement of chassis among the terminal are also highlighted in the figure.

The implementation of the Pools of Pools chassis arrangement based on the recommendations men-tioned earlier could result in a series of benefits for CUT. First, by providing more strict regulations at the gates, CUT could significantly reduce the area used to store foreign chassis and leverage this surplus of land for either more cooperative pool chassis fleet or as temporary container storage area.

Second, if a vessel berths at CUT, the overall percentage of inbound trucks expecting a chassis is 38% (West & Thammiraju, 2010). In other words, 38% of the trucks with only bobtails would show up at the inbound gates of CUT. With such a high percentage of inbound truck trips, CUT could

Figure 5.6: California United Terminal


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reduce the 10 inbound lanes to 9 lanes and enable 1 lane for the ROG. This way, CUT could pro-vide sufficient amount of chassis supply via ROG trips without significantly hindering the 38% of inbound trucks that need a chassis. Figure 5.7 provides an illustrative example of how the inbound gates would function at CUT. This priority lane should be located on the far left lane so it will not interfere with trucks entering the terminal land that already have a chassis or are carrying containers.

Figure 5.7: California United Terminal Chassis Movement

Leveraging Opportunity from the PierPass Program

Implemented in July 2005, the PierPass Program was introduced to extend the terminal’s operating hours to mitigate peak hour congestion at the ports. So far, the PierPass program has shifted 30% of the truck traffic to evening and weekends (Le-Griffin & O’Brien, 2013). As an alternative to the dynamic priority lane, the ROG can leverage opportunities from the PierPass Program and utilize off peak hours to complete chassis repositioning movements. This way, it would also eliminate the competition with motor carriers during the peak hour periods.

Ocean carriers inform terminal operators a few days before the arrival of each vessel so that the ROG can move chassis in accordance to the anticipated demand. If a vessel is expected to arrive in the next


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couple of days with 14,000 TEUs at POLB Total Terminal International (TTI), the ROG can use the PierPass’ off-peak operating hours to transfer chassis to TTI prior to the vessel’s arrival. Table 5.8 summarizes the Terminals at San Pedro Bay ports that operate during off-peak period as of March 6, 2015. The green cells indicate that terminal is open that particular off-peak period and red indicates that the terminal is closed.

Recommendations Repositioning chassis is not a simple task. Ensuring chassis’ availability not only requires rigorous effort from the ROG but also complementary effort from motor carriers and terminal operators. In order to improve cooperative pool efficiency, the following steps are recommended:

Table 5.8 :Summary of Terminals at San Pedro Bay Ports that Operate during Off-Peak

All chassis under the Pool of Pools Chassis agreement should be required to have proper stencil iden-tification. Marking of the carrier alliance pool (DCLI, LABP, GACP, or TNWA) should be on the chassis’ bolster and side rails.

Terminal operators need to be stringent on rules for foreign chassis entering and leaving the terminal land.

Both the terminal operator and ROG should implement priority lanes strictly for the purpose of chassis repositioning. Alternatively, the ROG could pursue times for chassis repositioning that align with the PierPass Program off-peak period hours.

Source: PierPass Program, 2015

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Lastly, the POLA and POLB should consider analyzing the environment and social impacts associat-ed with the additional trips that are potentially made by the ROG. This would include the peak hour congestion period as well as during the PierPass off-peak terminal hours.

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Chassis Inspection, Maintenance & RepairCurrent Issue:

Chassis maintenance and repair was an issue in the recent union labor dis-pute at the ports and continues to be a controversial issue on which parties are reluctant to compromise. Many of the shipping lines purchased, main-tained and repaired the chassis that truckers used to dray containers to and from marine terminals for free before 2012. Under this conventional chassis management model, the chassis inspection, maintenance and repair were performed by ILWU mechanics since most of the shipping lines are members of PMA, which retains a contractual relationship with ILWU. However, the chassis management model has been changing from the conventional model to a combination of neutral, terminal and cooperative model. Third-parties like chassis leasing company have no contractual relationship with ILWU and no obligation to ILWU for labor employment. It continues to be a concern in the industry that leasing companies will have chassis inspection, maintenance and repair work done at off-dock sites without ILWU workers.

The position of ILWU is clear: any change in chassis ownership shouldn’t affect or change their jurisdiction over chassis inspection, maintenance and repair. From ILWU’s perspective, the contractual relationship shifts from between ocean carriers and ILWU to ILWU, leasing company, ocean carriers and terminal operators. ILWU has been repeatedly urging terminal operators to issue requirements that mandates on-dock pre-trip chassis inspection. This would make ILWU mechanics the only eligible mechanics able to inspect chassis before motor carriers are allowed to pull the chassis and containers from their facilities. For ocean carriers and terminal operators, this issue could be problematic considering that both parties don’t have ownership of the chassis anymore.

Chassis Inspection:

Chassis inspections include individual chassis induction procedure, FMC-SA (Federal Motor Carrier Safety Administration) inspection and pre-trip inspection. Individual chassis induction procedure is required for all chassis accepted into a pool and are usually required and conducted by individual chassis pool managers. FMCSA inspection is a periodical inspection mandat-ed by the federal government. Pre-trip inspection is required in the current West Coast Chassis Pool Chassis Management Agreement before every chassis departs from the terminal, which is negotiable in terms of the contractual relationship between ILWU, leasing company, ocean carriers and terminal operators. It is anticipated that the ILWU mechanics will demand the juris-diction to inspect every chassis before it leaves the terminals

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Chassis Maintenance & Repair:

There are generally two locations where a chassis could be maintained: the maintenance of chassis on the roadside and maintenance of chassis in the storage pool. Roadside chassis maintenance is provided for chassis repair in goods movement. Motor carriers use chassis only for the purpose that they are interchanged for and are required to promptly return them to a valid start or stop location listed in West Coast Chassis Pool Chassis Agreement. If the chassis is interchanged by a motor carrier or is otherwise authorized by a mo-tor carrier to be in the possession of other parties, the motor carrier has the responsibility to abide all terms of this agreement in the same manner as it is in possession of previous Motor Carrier. Additionally, when chassis is lost, stolen from, badly damaged or destroyed by motor carrier, the responsible user has the obligation to pay the actual cash value or the depreciated replace-ment value of the chassis (West Coast Chassis Pool Chassis Agreement).

In regards to maintenance of chassis in a pool location, chassis owners or chassis management companies have the responsibility to prevent potential hazards such as broken chassis, corrosion, stolen or lost chassis, as well as to keep the number of functional chassis in inventory at acceptable levels. Chassis operator and owner, as appropriate, each have the right to recover and arrange storage for any equipment that has been lost, abandoned, desert-ed,impounded or otherwise located outside the possession of the motor carri-er responsible for such equipment, if after reasonable notification by operator or owner, motor carrier fails to recover and return the chassis to the terminal.

According to West Coast Chassis Pool Chassis Agreement, there are two scenarios under which chassis repair can occur: fixing reparable damage to the chassis and replacing tires. Any damage to equipment or repair of damage to tires during trucker’s possession is the sole responsibility of motor carrier while repair of equipment and tires unrelated to damage occurring during motor carrier’s possession is the sole responsibility of the operator and owner.

Recommendations:

To improve the efficiency of chassis maintenance:

On-dock pre-trip inspection should be conducted by ILWU labor as claimed in the current West Coast Chassis Pool Chassis Management Agreement regardless of the ownership of the chassis.

Chassis leasing and management companies should conduct its own individ-ual chassis induction inspection.

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Chassis maintenance and repair at the official start and stop locations as agreed by each party should be conducted by ILWU labor. Third-party, chassis leasing and management companies would coordinate the return of broken chassis to start and stop locations for repair.

Chassis leasing and management companies should provide roadside chassis maintenance and repair.

Table 5.9: Table of Chassis Maintenance Responsibilities


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Chassis Adminstration (Billing, Leasing, etc.)The cooperative pool operators will manage their own respective pools which involves inde-pendently establishing their own proprietary rates for daily chassis usage and also continu-ing to be competitive with each other (Longshore and Shipping News, 2015). The three operators are keeping the same rates, insurance models, and leasing agreements as before. The biggest change is the interoperability of the chassis themselves.

Table 5.10 shows the daily market rates for three major leasing companies that make up the Pool of Pools. Most trips utilize the daily chassis rental rate. All of the charges are per chassis, per calendar day or any part thereof.

By charging daily rates, the Pool of Pools discourages the use of chassis for storage and drop-and-hook operations. This also incentivizes motor carriers to return the chassis after each use, resulting in a higher chassis daily use rate for the supply pool. The collaborative pool must also consider maintaining economically competitive daily rates to discourage motor carriers and BCOs from purchasing their own chassis, which would reduce the need to utilize the pool. CCM, the largest chassis management company in the U.S., has seen its daily chassis rates increase by 45 percent since 2010 (Mongeluzzo, 2014). Table 5.11 shows that owning or long-term leasing of chassis could be more cost-efficient for motor carriers. If motor carriers invest in their own fleet, then they would be responsible for maintenance and repair, roadability regulations, labor, and storage. However, if the bottom line is im-proved by securing their own chassis supply, then motor carriers could stop utilizing the cooperative pool.

Table 5.10: Daily Market Rates for Leasing Companies in Pool of Pools

Source: DCLI 2014

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Recommendation

Due to the recent adoption of the Pool of Pools approach, it is recommended that the current pricing scheme remain in place, which allows the three major leasing companies to compete on daily rates. This pricing scheme should ensure a competitive daily rate, thereby discouraging motor carriers from purchasing chassis and maximizing the use of the collaborative pool.

Table 5.11 Cost of different chassis ownership + lease structures


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Summary of Recommendations

1. Chassis Ownership and Provision

2. Chassis Storage

3. Chassis Availability

a) POLA and POLB should require participation in the cooperative pool from container terminals, shipping lines and the trucking community.

b) Minimize chassis storage on-dock to allow for efficient sorting of con-tainers at the terminal.

c) Chassis management should be structured to ensure maximum avail-ability, utilization, and value of chassis and minimum redundancy, con-gestion and waste.

d) POLA and POLB should provide further adjustments and improve-ments to the new cooperative model while working with existing part-ners to ensure efficiencies are delivered.

a) Keep on-dock marine terminal chassis storage to a minimum

b) Utilize off-site, cooperative pool storage as much as possible.

a) Require all chassis under cooperative pool management to have proper stencil identification on the bolster and side rails.

b) POLA and POLB should require terminal operators to be stringent on rules for foreign chassis entering and leaving the terminals.

c) Both the terminal operators and ROG should implement priority lanes strictly for the purpose of chassis repositioning.

d) ROG should implement times for chassis repositioning that align with the PierPass Program off-peak period hours.

The recommendations of this report based on the assessment of the current Pool of Pools model are summarized below:

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4. Chassis Inspection, Maintenance & Repair

a) Regardless of chassis ownership, on-dock pre-trip inspection should be conducted by ILWU labor according to the current West Coast Chassis Pool Chassis Management Agreement.

b) Chassis leasing and management companies should conduct their own individual chassis induction inspection.

c) Chassis maintenance and repair at the official start and stop locations should be conducted by ILWU labor. Third-party, chassis leasing and management companies should coordinate the return of broken chassis to start and stop locations for repair.

d) Chassis leasing and management companies should provide roadside chassis maintenance and repair.

a) Due to the recent adoption of the Pool of Pools approach, it is recom-mended that the current pricing scheme remain in place until such time that market forces necessitate a change.

b) The pricing scheme should ensure a competitive daily rate, thereby discouraging motor carriers from purchasing chassis and maximizing the use of the collaborative pool.

5. Chassis Adminstration

e) POLA and POLB should analyze the environment and social impacts associated with truck trips for chassis repositioning.

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Reference

California United Terminals. (2011a). Welcome to California United Terminals (CUT). California United Terminals (CUT). Retrieved from http://www.shipcut.com/. California United Terminals. (2011b). Yard Map. California United Terminals (CUT). Retrieved from http://www.shipcut.com/yard-map.php. Consolidated Chassis Management. (n.d.). Frequently Asked Question (FAQ). Consolidated Chassis Management. Retrieved from http://www.ccmpool.com/Chassis-Pools/CCM-Pool-General-FAQ-Page.aspx. Flexi-Van Leasing, Inc. (2015, March 2). Pools of Pools Operation in Los Angeles and Long Beach Begins March 1, 2015. Flexi-Van Leasing, Inc. Retrieved from https://www.flexi-van.com/Flexi-CloudNewsAnnouncements/Intermodal/FVLIPoolofPoolsLABPMarch012015.pdf. Le-Griffin, H. & O’Brien, T. (2013). Impact of Stream-Lined Chassis Movements and Extended Hours of Operation on Terminal Capacity and Source-Specific Emission Reductions. Metrans Trans-portation Center USC and CSULB. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?-doi=10.1.1.410.3542&rep=rep1&type=pdf.

PierPass Program. (2015, March 6). PierPass OffPeak Schedule. PierPass. Retrieved from http://www.pierpass.org/wp-content/uploads/2015/02/RollingSchedule.From-3.6.15.pdf. Mongelluzzo, B. (2014, September 23). DOJ ruling will help resolve chassis shortages at LA-Long Beach. Journal of Commerce. Retrieved from http://www.joc.com/port-news/us-ports/port-los-ange-les/doj-ruling-will-help-resolve-chassis-shortages-la-long-beach_20140923.html. TRAC Intermodal. (2015, March 13). Pool of Pools – Frequently Asked Questions. TRAC Inter-modal. Retrieved from http://www.tracintermodal.com/wp-content/uploads/2015/03/TRAC-Inter-modal-Pool-of-Pools-FAQs-3-13-2105dh.pdf. Rodrigue, J.P., Zumerchik, J. & Ogard, E. (2012, August 1). The U.S. Transition to a Motor Car-rier Supplied Marine Chassis: Operational Impacts On and Off Terminal. Transportation Research Board, Paper 13-4625. Retrieved from http://people.hofstra.edu/jean-paul_rodrigue/downloads/TRB%20Chassis%20Paper%2080112%20FINAL.pdf. West, R. & Thammiraju, R. (2010, November 1). Ports of Los Angeles and Long Beach Year 2010 Marine Terminal Gate Surveys. [Draft Memorandum]. Oakland, CA: Cambridge Systematics.

West Coast Chassis Pool Chassis Agreement, Retrieved from:http://www.emodal.com/common/mo-torcarrier_wccpchassisagreement.pdf

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ILWU & PMA- Tentative Agreement on Chassis Maintenance & Repair Reached. Retrieved from:http://www.junologistics.com/ilwu--pma---tentative-agreement-on-chassis-maintenance--re-pair-reached---update-jan-27-2015/Inspection, Repair and Maintenance Regulation Part 396, Federal Motor Carrier Safety Administra-tion, Retrieved from:http://www.fmcsa.dot.gov/regulations/title49/section/396.17

Mongelluzo, B. (2015, Feb 28) LA-Long Beach , Chassis Lessors Form Neutral Chassis Pools. Trac Intermodal. Retrieved From http://www.tracintermodal.com/index.php/la-long-beach-chassis-les-sors-form-neutral-chassis-pool/

Flexi Van Leasing. (2015, March 2). Pool of Pools Operation in Los Angeles and Long Beach Begins March 1. Retrieved From https://www.flexi-van.com/FlexiCloudNewsAnnouncements/Intermodal/FVLIPoolofPoolsLABPMarch012015.pdf

(2015, March 3). ‘Pool of Pools’ Uncovered. Port Strategy. Retreived From http://www.portstrategy.com/news101/port-operations/planning-and-design/pool-of-pools-uncovered

the IAS Team. (2015, March 16). What do the West Coast Port Strikes Mean to My Supply Chain. Retreived From http://interasset.com/blog/

(2015, Feb 27). Leading Chassis Providers Announce “Pool of Pools”, Operations commence March 1, 2015. PR Newswire. Retrieved From http://www.prnewswire.com/news-releases/leading-chas-sis-providers-announce-pool-of-pools-operations-commence march-1-2015-300043150.html

Rodrigue, J. et al. (n.d.). Intermodal Chassis Utilization: The Search for Sustainable Solutions. Re-treived From http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaperjprev3.pdf

Rodrigue, J. et al. (n.d.). Intermodal Chassis Utilization: The Search for Sustainable Solutions. Re-treived From http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaperjprev3.pdf

Roy, M. (2015). (Still) Evolving US Chassis Supply Market [ Powerpoint slides]. Retreived From http://www.cpcstrans.com/files/4914/2141/9799/Roy_Marc-Andre__-_Evolving_US_Chassis_Mar-ket.pdf

Roy, M. (2015). (Still) Evolving US Chassis Supply Market [ Powerpoint slides]. Retreived From http://www.cpcstrans.com/files/4914/2141/9799/Roy_Marc-Andre__-_Evolving_US_Chassis_Mar-ket.pdf

WD Group. (2003). U.S. Container Terminal Throughput Density. Report to the Port of Houston Authority.

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Rodrigue, J. P., & Notteboom, T. (2009). The terminalization of supply chains: reassessing the role of terminals in port/hinterland logistical relationships.Maritime Policy & Management, 36(2), 165-183.

Rodrigue, J. P., Zumerchik, J., & Ogard, E. L. (2012). The US Transition to a Motor Carrier Sup-plied Marine Chassis: Operational Impacts On and Off Terminal. In Working Paper.

Zumerchik, J., Rodrigue, J. P., & Lanigan Sr, J. (2012, April). Automated transfer management systems and the intermodal performance of North American freight distribution. In Journal of the Transportation Research Forum(Vol. 48, No. 3).

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VI. Lessons Learned: Successful Chassis Sharing Examples


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Successful Chassis Sharing Examples

The newly formed Pool of Pools should look to other chassis pools that have been implemented around the country to determine the best practices for effectively managing their shared resources. With multiple IEPs competing within the pool, it was necessary for a third party, International Asset System (IAS), to act as a neutral manager and moderator for the Pool of Pools (Pool of Pools Uncov-ered, 2015). IAS will be responsible for ensuring coordination among pool contributors and per-forming functions such as shared expense apportionment, forecasting, and migration management (Port Performance Task Force, 2014). IAS is also in the challenging situation of determining whether the inventory of available chassis is able to meet the demand; however, before this can be deter-mined, the company has to ensure that the current supply is being managed correctly. Purchasing more chassis inventory may not be a viable option with the current location constraints. To add to the complexity is that many supply chain professionals foresee chassis pools as the intermediate step before individual motor carriers begin purchasing their own chassis, which would diminish the need for a chassis pool (Rodrigue, 2012).

Other chassis pools and IEPS around the county have implemented a Chassis Management System, which establishes set parameters, or key performance indicators (KPIs) to be tracked during pool operations. Table 6.1 lists common KPIs for chassis management:

Table 6.1: Key Performance Indicators for Chassis Management

Source: “Port Performance Task Force”, 2014

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Consolidated Chassis Management (CCM), one of the largest chassis management companies in the United States with over 140,000 chassis in various pools, currently deploys a sophisticated manage-ment information system to track real time chassis usage rates (Systems, 2015). IAS currently utilizes ChassisManager with the San Pedro Bay chassis pools, an online system for members to register, receive rental agreement approval, monitor their rented chassis fleet, view and reconcile chassis rental charges, and easily download information for billing (“High Tech and High Touch” 2015). This sys-tem will need to be expanded to track and manage the common KPIs listed in Table 6.2 Another tool being implemented with other chassis pools is the ‘street turn system.’ A ‘street turn system’ is an online platform that allows chassis pool members to match up, or re-use, containers and chassis at off-dock service locations. By using the system, members can post information on contain-er or chassis availability, exchange equipment outside of port terminals, and make informed decisions on equipment utilization. Figure 6.2 shows the efficiency flows that could be gained with ‘street turn’ implementation. In 2007, the Port Authority of New York and New Jersey developed a pilot project known as the ‘Virtual Container Yard’ that helped facilitate the transfer of containers and chassis for reuse outside of the terminal (Port Performance Task Force, 2014).

Source: “Port Performance Task Force”, 2014

Figure 6.2: Street Turn Design

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References

1. “High Tech and High Touch – Your Chassis Are Taken Care of.” (n.d.). IAS ChassisManager. IAS. Web. 08 Apr. 2015. <http://www.interasset.com/chassis-manager.php>.

2. “Intermodal Transportation Solution Eliminates Empty Miles and Documents Asset Transfer.” (2014, September 18). IAS ChassisManager Facilitates Street-Turns. IAS. Web. 08 Apr. 2015. <http://www.interasset.com/news/pr/2014/IASChassisManagerFacilitatesStreetTurns.php>.

3. “Pool of Pools Uncovered.” (2015, March 3). Port Strategy. Web. 7 Apr. 2015.

4. “Port Performance Task Force.” (June 2014). The Port of New York and New Jersey. Web. 05 Apr. 2015. <http://www.panynj.gov/port/pdf/pptf-final-report-june-2014.pdf>.

5. Rodrigue, J., Zumerchick, J., Lanigan, Sr, J., & Barenberg, M. (2012). Intermodal Chassis Utiliza-tion: The Search for Sustainable Solutions. Retrieved April 9, 2015, from http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaperjprev3.pdf

6. “Systems.” (2015). Consolidated Chassis Management. Web. 08 Apr. 2015. <http://www.ccm-pool.com/Customer-Tools/Systems.aspx>.

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VII. Alternatives


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One alternative to the Pool of Pools model would be the evolution of the chassis management system into a single regional ‘super pool’. Under this model, all ocean carriers, motor carriers, and IEPs would have to renegotiate chassis hosting, usage, contribution, and operating agreements with the regional ‘super pool’, which would act as the sole pool operator. Competition would be reduced but a major delay in implementation could occur due to the need to renegotiate the chassis management agreements. Once these new agreements are established, the ‘super pool’ model has the potential to reduce chassis management complexity and administrative costs. However, there are potential chal-lenges with this approach. The regional ‘super pool’ further commits the San Pedro Bay ports into a pool sharing model when the supply of chassis is still influx and questions remain on the future of chassis ownership. The recommended improvements to the Pool of Pools approach made in this re-port would provide the San Pedro Bay ports with the flexibility to adapt and grow over time without overly committing to a single pool approach.

Another alternative would be for the San Pedro Bay ports complex to transition to having motor carriers and BCOs own and manage their own chassis fleets. This approach, utilized throughout many major port areas around the world, would take advantage of the fact that domestic chassis replacements will be necessary in the near future. With the average age of the U.S. chassis fleet at 15 years of age and the useful life of chassis at only 20 years of age, the next five years is a critical time to invest in the chassis management system that will most effectively utilize the chassis fleet. For exam-ple, Lowe’s, one of the top importers in the United States, recently announced the long-term lease of a dedicated chassis fleet with Flexi-Van and Atlantic Intermodal Service, without any third-party intervention (Mongeluzzo, 2014). The prime advantage of moving to the motor carrier/BCO mod-el is that costs per intermodal revenue move would be at their lowest because the chassis would be used strictly for transportation, and not for operations or storage (Rodrigue et al., 2012). By owning chassis, motor carriers would need to maximize the utilization of the chassis through transportation to keep costs as low as possible. On the other hand, moving to the motor carrier model would carry some inherent risks. Motor carriers and BCOs would have to address questions of storage require-ments, chassis maintenance and repair, and maintaining roadability regulations. Most importantly, this model would require motor carrier companies and BCOs to make a substantial capital invest-ment, while these costs are currently distributed among the current participants in the Pool of Pools

Alternatives

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VIII. Stakeholder Implications

Image courtery of LA Times

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Stakeholder Implications

The Pool of Pools supply model at the POLA and POLB includes a wide range of stakeholders with direct and indirect interests, expectations and performance needs in terms of chassis supply and movement. They range from BCOs, ocean carriers, motor carriers, marine terminals, public agencies and planning organizations including port authorities, and unions responsible for chas-sis maintenance and repair.

Motor carriers will witness the most significant change with this new chassis supply model. The ease of utilizing and dropping chassis at any of the twelve start/stop locations will increase efficiency and driver productivity while reduc-ing waiting time and congestion. This reduction in time spent to pick up or return chassis will maximize driver turn times, and minimize delays in sourcing chassis. This increase in motor carrier productivity will also benefit BCOs, who expect deliveries to arrive on time and prefer a perennial supply of chassis to minimize any transit delay. Terminal operators will also benefit from this model as they will now have more flexibility in obtaining chassis and would not be required to segregate chassis from the participating pools. This will be instrumental in opening up valuable terminal real estate in the crowded port area.Public agencies and planning organizations have interests that revolve around land use, traffic and environmental implications. Since the Pool of Pools model has the potential to reduce conges-tion on roads by minimizing truck movements, this would positively affect air quality and road safety in the communities around the San Pedro Bay ports. Public institutions and neighbors will also benefit from a decrease in overall land footprint necessary due to efficient storage and management. The ILWU, as the entity currently responsible for inspection, maintenance and repair of the chas-

sis, is a crucial stakeholder to consider because the chassis providers the in the Pool of Pools model are not members of the Pacific Maritime Association (PMA) and therefore are not con-tractually obliged to utilize the ILWU. The tenta-tive agreement currently in place suggests that ILWU will have jurisdiction to inspect chassis before they leave the terminal; however, this still needs to be voted on by the ILWU. Finally, the public authorities that run the POLA and POLB will need to adjust to this new supply model of chassis operation while catering to the existing market. This shift from old to new will requires new systems, procedures, processes and skill sets. Therefore, the San Pedro Bay ports will need to ensure full cooperation from other stakeholders and maintain efficiency standards in order for this model to be a success. At this early stage in implementation, the cooperative pool model has done a good job integrating the priorities of the various stakeholders involved. Each stakeholder is invested in the model, either operationally or financially. That being said, the three companies owning the different pools have the biggest responsibility for running this por-tion of the supply chain. Successful long term implementation will result in increasing im-provement to the environment due to decreased fuel usage and further reductions in congestion due to more efficient chassis fleet management.

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References:

NCFRP . (2012). Guidebook for Assessing Evolving International Container Chassis Supply Model. Washington D.C.: Transportation Research Board.

(2015, Feb 27). Leading Chassis Providers Announce “Pool of Pools”, Operations commence March 1, 2015. PR Newswire. Retrieved From http://www.prnewswire.com/news-releases/leading-chas-sis-providers-announce-pool-of-pools-operations-commence march-1-2015-300043150.html

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IX: Conclusion

Image courtesy of LA Times

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Over the past five years, the chassis ownership, operations, and management model in the United States has undergone a massive transition. The supply and availability of chassis across the nation’s ports was thrown into disarray after ocean carriers began to divest from providing and managing chassis in 2010. As highlighted in this report, the effects were especially felt at the nation’s busiest intermodal hub, the San Pedro Bay ports complex. With each passing year, the San Pedro Bay ports have made incremental steps towards evolving into a more efficient model. This transition culminat-ed in March 2015 with the launch of the Pool of Pools. By evolving from an ocean carrier chassis model to a collaborative pool model, the ports took a critical step in redefining their chassis manage-ment structure and addressing the uncertainty created only a few years prior.

With such a recent launch date, the Pool of Pools chassis model has yet to produce conclusive data and results on the efficacy of its management structure. One advantage of being so newly formed is that the model can still adjust and evolve to meet the needs of its stakeholders. Currently, the Pool of Pools is operating as multiple pools with an inter-pool usage agreement, which allows all previ-ous operating arrangement between shipping lines, motor carriers, and IEPs to remain in place. The main operational difference of the Pool of Pools from the previous model is the inter-pool usage agreement overseen by the third-party entity IAS. Because all existing operating arrangements were maintained, the Pool of Pools was able to immediately address the issue of interoperability, which was at the root of the chassis dislocation crisis in 2014 (Mongeluzzo, 2014). The Pool of Pools coop-erative model should remain in place and continue to improve based on the recommendations in this report. While this report supports the benefits created by the Pool of Pools, it also provides several recom-mendations to become even more efficient, cost-effective, and functional for its stakeholders. These recommendations should be implemented over the next two to three years in order for the ports to continue refining and improving their cooperative pool model. Depending on the performance of these recommendations, additional refinements and improvements will likely be necessary. In other

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References:

Mongelluzzo, Bill. “Chassis Crisis at LA-LB.” Chassis Crisis at LA-LB. Journal of Commerce, 3 Feb. 2014. Web. 20 Apr. 2015.

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X : Contributing Authors

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Rebecca Chung is dual degree student of the Master of Planning at the USC Sol Price School of Public Policy and Master of Science in Civil Engineering – Transportation Engineering at USC Viterbi School of Engineering. She is expected to grad-uate in May 2015 with emphasis in Transportation and Infrastructure Planning. As a long-term career objective, she wishes to gain an insight in transit planning, specif-ically in the interaction between transit infrastructure and urban land use.

In May 2013, Ms. Chung graduated on the Dean’s Honor List from the University of Waterloo, Canada with a Bachelor of Applied Science, Civil Engineering. Through several internships in the undergraduate pro-gram, she brings to the team over two years of expe-rience in transportation planning and engineering in both the public and private sector setting. She has been involved with various types of projects such as traffic impact studies, parking studies, traffic operations and transit projects.

Ms. Chung is a highly capable individual with a strong academic background and possesses a comprehensive understanding of the technical elements of transporta-tion planning through her work experience. She hopes to amalgamate ideologies found in engineering and urban planning such that she can conceptualize the problem analytically but also consolidate it with the spatial thinking of a city planner.

Ms. Chung is currently working at Fehr & Peers Transportation Consultant (Los Angeles Office) as a transportation planning intern where she assist the team members in urban transportation demand forecast modeling.

Qianyao Duan is currently a sec-ond-year graduate student enrolled in Master of Planning at USC Sol Price school of Public Police. With the con-centration of transportation and infrastructure, she is very interested in transportation planning based on Geographic Information Systems (GIS). Also, she is expected to get the Geographic Information Science and Technology Certifi-cate when she graduate in May 2015.

Prior to the her studying at USC, Qianyao studied GIS for four years in Wuhan University of Technology and got a Bachelor of Science Degree in GIS. With both the bache-lor’s degree in GIS and the GIST certificate, Qianyao has very solid knowledge and practical skills in data acquisi-tion, data processing, database establishment, as well as spatial analysis and modeling.

Qianyao is now working as the Forecasting and Modeling Intern at Southern California Association of Governments (SCAG). She mainly conduct quality control and address data requests from local inputs across the SCAG Region for the Regional Transportation Plan/Sustainable Com-munity Strategy (RTP/SCS). From April 2014 to March 2015, Qianyao worked as the Research and Evaluation Intern at Community Health Councils, where she primar-ily supports data management and community research for the Center for Diseases Control and Prevention (CDC) funded projects, including Racial and Ethnic Approaches to Community Health (REACH) Grant andCommunity Transformation Grant (CTG).

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Karl Fielding is a second year Master of Planning student at the University of Southern Cali-fornia Sol Price School of Public Policy. He is expected to graduate in May 2015 with an emphasis in Trans-portation and Infrastructure Planning. Mr. Fielding plans to utilize his masters degree to focus his profes-sional work on how better transportation infrastructure decision making can help improve accessibility and the quality of life for local jurisdictions and community members. He is also passionate about the relationship between transportation and land use.

In May 2007, Mr. Fielding graduated with honors from the University of Southern California with a Bachelor of Arts in Environmental Studies. In 2008, he began his planning career at PBS&J/Atkins in Los Angeles, performing environmental analysis on real estate and in-frastructure projects in Southern California. This work exposed him to project development and approval, real estate development, urban planning, and transportation planning.

After three years at PBS&J/Atkins, Mr. Fielding moved to Sacramento and joined Parsons Brinckerhoff as part of the program management team for the California High-Speed Rail Authority, working to secure environ-mental approvals in the Central Valley and transition the high-speed rail project into construction. Now based in Los Angeles, he works on corridor planning and stakeholder engagement for the Southern California sections of the project. Mr. Fielding looks forward to finishing his graduate degree and continuing his work in the field of transportation planning.

Tanaya Malhotra is a second year graduate student at Sol Price School of Public Policy, University of Southern California, studying Masters in Urban Planning. She is expected to graduate in Fall 2015 with a specialization in sustainable land use. Her long term career objective is to get in the field of planning consulting exercising theoretical knowledge in practical development of sustainable cities specifically in contexts of transporta-tion and urban land use.

In 2011, Ms. Malhotra graduated with a Bachelor’s degree with honors in Economics from Delhi University, India. To further her interest in economic development she pur-sued her first masters in Environment and Economic De-velopment also from Delhi University. Having conducted her own research as a part of her Master’s thesis and later publishing and presenting a paper on it,

Ms. Malhotra is proficient in qualitative analysis. Her background in Economics provides her with a quantitative background, experience in quantitative research and use of economic and statistical concepts which provides her an edge in business, finance and accounting related research.

Through internships and exposure to fields of manage-ment, research and compliance in varied cultural contexts of Kuwait, England, India and Indonesia, Ms. Malhotra brings to the team a global outlook and a strong academic and research background backed by spatial planning skills. She plans to integrate her analytical social science capabili-ties with transportation planning concepts, to enhance her experience and knowledge in the realm of transportation.

Ms. Malhotra is currently working at LADOT, as a transit planning intern where she assists the team in Streetcar Project Management and LADOT emergency planning.

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Adam Montgomery is a dual degree student in the Master of Planning and Pub-lic Administration program at the USC Sol Price School of Public Policy. Simultaneously, he also maintains a full-time staff position at the USC Marshall School of Business in the Data Sciences and Operations Depart-ment, where he works as a program administrator for the Center for Global Supply Chain Management. He also currently works as a Marine Science Technician in the US Coast Guard Reserves and a research intern for the Los Angeles Economic Development Corporation (LAEDC), where he is working on a small team to de-velop the 2016-2020 Los Angeles County Strategic Plan for Economic Development.

Prior to his admission to USC, Adam spent four years working in various capacities outside of the United States. He spent a year teaching, developing curriculum, and evaluating students in a demanding international academy on the island of Jeju, South Korea. Preceding his time in Korea, he served in the US Peace Corps in the village of Potrero Reduccion as an agricultural and community development specialist. While in Paraguay, he received several months of training in the practice of beekeeping. He used this training to teach the villagers of Potrero Reduction how to maintain an apiary, harvest honey, and find opportunities for farmers to sell bee-re-lated products at various markets.

Adam received his Bachelor of Arts in Business Admin-istration from the University of Memphis, where he was also a member of the university soccer team. While at the University of Memphis, he pursued a professional soccer career and spent his summers playing for several semi-professional soccer teams in Nashville, Denver, and Boston.

Rui Tu is currently a second-year Master of Planning Student with a focus on transportation plan-ning at USC Sol Price School of Public Policy and She is also enrolled in the Sustainable Planning and Policy Certificate program at USC. She is expected to graduate in December 2015. Her long-term career objective is to get insight of how to achieve sustainability in transpor-tation planning, especially in transit planning and active transportation.

In July 2013, Ms. Tu graduated at the top of her class from the University of Guangxi, China with a Bachelor Degree of Engineering in Urban Planning. Through her internships at pubic agencies and private firm in both China and U.S., she brings to the team experiences in urban planning, urban design and transportation plan-ning. She has the ability to accomplish multiple tasks for the team including literature review, data generation and analysis, urban design, report writing, mapping and modeling.

Rui Tu is a highly self-motivated person with a strong interest in transportation planning and academic as well as professional background in planning. She believes that transportation planning is not only just about engineer-ing, but also interacts with the art of design and com-munity dynamics. She is hoping to integrate her diverse knowledge and skill sets in the realm of transportation planning. Ms. Tu is currently working at LADOT as a active transportation intern where she assists the Bike Safety Score Project and Bikeway Planning.

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Jonathan Yang is a 2nd year Masters of Planning Student at the USC Sol Price School for Public Policy. He is expected to graduate in May 2015 with an emphasis in Transportation and Infrastructure Planning. His long term career objective is find the most effective bridge between policy and urban design.

In June 2012, Mr. Yang graduated from the University of California, San Diego with a Bachelor’s of Art in Urban Studies and Planning. Throughout his intern-ship experience in his undergraduate and graduate studies; he was able to experience the non-profit, public and the private sector. Mr. Yang has had experience working for councilmember’s, transportation agencies, and land use consultants. This is what he brings to the team; the ability to bridge together the many facets of planning into a cohesive and effective document and discussion.

Mr. Yang is a highly capable individual with a strong academic background. He has experience and a com-prehensive understanding of transportation planning as well as experience with urban design. He hopes to find the most effective connecting thread between design and policy.

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Image courtesy of LA Times
