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July 3, 2023

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44 Journal of Commerce | July 3, 2023 www.joc.com Beyond the Docks: From Inland Ports to Transloading Special Report Chassis lessors have said there's no difference between the quality of a new or refurbished chassis. The cost, however, is much higher for new units, due in part to a slow ramp-up in production by US-based providers in the wake of import duties that raised the price of chassis made in China by approximately 300%, DCLI CEO Bill Shea noted during the Georgia Foreign Trade Conference. "Despite the softness in the market, we have not seen a reversion on pricing for new chassis," he said. "We always knew the US chassis would cost more than from China, but there are also issues around com- ponents that are keeping the price high. Hopefully, we'll see a softening in the prices, but it makes the case for us to do refurbishments right now." TRAC Intermodal has opened six refurbishment shops with more to come, COO Val Noel said June 15 during the Agricultural Transpor- tation Coalition's (AgTC) annual meeting in Tacoma, Wash. "We've got about 70,000 of our 200,000 units upgraded already," he said. "We've got about another 30,000 that have been refurbished, so over 50% of our fleet is either refurbished or upgraded." He added, "If I had a magical wand, I'd wave it and do it all overnight." From 2.0 to 3.0 Equipment providers have not disclosed full details on how many chassis they refurbished on an annual basis, but rehabilitating older units will also be a major part of the South Atlantic Chassis Pool 3.0 (SACP 3.0), scheduled to replace the current 2.0 pool in October. All three top chassis lessors have committed to the SACP 3.0, which will have 50,000 units covering the ports of Savannah, Ga.; Jacksonville, Fla.; and Wilmington, NC. While pool administrator Con- solidated Chassis Management (CCM) has bought some new chas- sis, it told the Journal of Commerce that most of the SACP 3.0 fleet will be refurbished units. "Chassis in the SACP will move from an average age of about 21 years old to under four years old within four years from now because of this refurb program, thanks to the investments made by the leasing companies," CCM CEO Mike Wil- son said during the Georgia Foreign Trade Conference. Two other US chassis lessors, Flexi-Van and NACPC, have long supported the SACP model, but there were questions about whether DCLI and TRAC would fully get on board with the new pool because they have generally been opposed to the single-pool operator models. For example, both DCLI and TRAC have long opposed a single-pool chassis model in Memphis. "We can argue whether or not a single-provider pool brings competi- tion into markets, but what we won't argue with and fully support is the fact that SACP 3.0 will improve the supply and quality of the [chassis] in this region," DCLI's Shea said. "We're looking to invest $225 million in our assets that support this pool, and we hope to conclude negotiations on our lease agreements [with CCM] in the next few weeks." Jake Gilene, chief commercial officer of TRAC, said the company will make a similar commitment to SACP 3.0. "We're not quite at $225 million, but we're going to be a little more than $200 million of repurposed assets for the pool," he told the conference. However, Ian Nicks, vice pres- ident of multimodal operations at Valley Express, said a lack of safe, reliable chassis at Minneapolis rail ramps has forced the trucking com- pany to purchase its own equipment. "I can't haul any door moves [car- rier haulage] in Minneapolis because the pool chassis we are supposed to use will not make it to delivery without breaking down, without tires blowing or without some sort of issue happening," Nicks told chassis providers during the AgTC event. "When we used pool chassis, between 40% and 60% of the time we had a breakdown within 250 miles of Minneapolis … For inland ports like Minneapolis, no offense, they're garbage." JOC email: ari.ashe@spglobal.com twitter: @arijashe Refurbishing chassis consists of stripping a unit to its bare steel and rebuilding it with new components. Ari Ashe / Journal of Commerce

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