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October 15 2018

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October 15 2018 | The Journal of Commerce 29 www.joc.com Government authorities were successful while the chassis lessors weren't, the key differ- ence was US businesses aren't being harmed on cranes but are on chassis. "Including the additional $200 bil- lion just imposed, the total Section 301 tariffs on Chinese commodities and China's retaliation responses cover about 10 percent of all trade that moves through America's ports by value, which is concerning," AAPA President Kurt Nagle said. "AAPA was pleased, however, to see that port cranes were removed from the list, as we recommended at the recent hear - ings. Tariffs on these cranes ... would have harmed ports' ability to make the investments necessary to handle the larger vessels now being used in ocean trade and hurt US international competitiveness." There has been little substantive reaction to tariffs being assessed on chassis. CIMC told The Journal of Commerce that it was displeased, while Cheetah Chassis said it was happy with the decision. DCLI would only say that "we are still working through the implications of this decision for our business. As such it is too early at this point for us to comment." DCLI earlier said it spent $140 mil- lion on more than 10,000 new Chi- nese-made chassis during the last four years, which, with the tariffs, would have cost an additional $35 million. As many of these chassis lessors are owned by private equity groups, any adjustments in price could alter the bal- ance between refurbishing old chassis and purchasing new units. In the end, shippers don't care whether a chassis is refurbished, remanufactured, or new, as long as the equipment has anti-lock brakes, LEDs, radial tires, modern electrical wiring, and other features to guarantee a safe and reliable delivery to distribution centers. JOC email: ari.ashe@ihsmarkit.com twitter: @arijashe MARINE TERMINALS WERE spared a multimillion-dollar tariff that could have placed a crimp into projects to expand US ports, but chassis providers and users didn't get a reprieve amid a dispute between US and Chinese equipment manufactur- ers. Shippers ultimately will suffer because chassis lessors will pass along these extra costs by raising prices on daily rentals or long-term leases. The Office of the US Trade Rep- resentative released the final list in September after hearings into a 25 percent tariff on goods touching vir- tually every US industry. The Section 301 Committee, an intergovernmental working group, heard testimony in August from chassis manufacturers and providers that are integral in the use of wheels to deliver containers. China Intermodal Marine Con- tainers (CIMC), the world's largest container and chassis manufacturer, spearheaded an effort with chassis lessors such as Direct ChassisLink Inc. (DCLI), Flexi-Van Leasing, TRAC Intermodal, and the North American Chassis Pool Cooperative to outline how a tariff could cost the industry more than $100 million and was im- proper because US manufacturers can't churn out equipment fast enough to satisfy the needs of cargo owners. Cheetah Chassis led an effort to maintain the tariffs, arguing that CIMC flooded the US market with cheap chassis and a protectionist measure would put them back on equal footing while only costing ship- pers fractions of a penny per item. An average chassis costs $10,000 to $12,000. The Port of Virginia and the American Association of Port Author- ities (AAPA) lobbied against a tariff on ship-to-shore and gantry cranes because there are no US manufactur- ers of the equipment that costs more than $14 million per unit. While it's not known why the port New Jersey's regulations have made it relatively easy for owner-operators to exist. He suggested that drivers who face difficulty obtaining the IRS designation may opt to ply their trade in nearby ports, such as Philadelphia or Baltimore. And some truckers designated as employees may leave drayage and take a position in other sectors of the trucking industry that are more lucrative, he said. Edisson Villacis, an independent drayage operator in the Port of New York and New Jersey who runs a Face - book page for drivers, said he doesn't believe many independent operators want to be employees because they're reluctant to give up the ability to set their own hours and workloads — reasons they got into the business in the first place. John Vreeland, a labor attorney whose firm has handled transportation cases in New Jersey, said he believes the rule is a "pretty big change," with potentially sweeping consequences. Truckers may be reluctant to seek the IRS designation, fearing that an adverse ruling could trigger an audit of their past tax payment practices, and may therefore face a tougher test if later confronted by the Labor Depart - ment, he said. JOC email: hugh.morley@ihsmarkit.com twitter: @HughRMorley1 A tale of two tariffs Terminals get reprieve on cranes, while shippers will feel pain on chassis By Ari Ashe

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