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July 21, 2014

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10 THE JOURNAL OF COMMERCE JULY 21.2014 COVER STORY TH E BUS I E ST CONTAI N E R gateways on the U.S. East and West coasts are trying to bring order to the chaos of intermodal chassis. It won't be quick or easy. Chassis have emerged as a top obstacle to improved productivity at the ports of Los Angeles and Long Beach, and New York-New Jersey. Truckers waste time and money deliv- ering a container at one terminal and a chassis somewhere else. Terminals frequently run short of chassis during busy periods. Out-of-service chas- sis and billing problems are constant headaches. For five years, the industry has been scrambling to adjust to the changes ocean carriers unleashed when they transferred most of their chassis to leasing companies and quit providing customers with "free" equipment in a bundled service. Truckers or shippers now have primary responsibility for chassis, as always has been the case in other countries. Ocean carriers' disengagement from chassis has coincided with explo- sive growth in ship sizes and carrier alliances that have created unforeseen strains on the system. The industry has been adjusting on the fly, and dealing with a kaleidoscopic array of models for chassis supply. "There is no one solution. If you ship across the country, you have to adjust to seven different models," said Steve Rubin, a former CEO at Princ- eton, New Jersey-based chassis lessor TRAC Intermodal who has studied the industry closely. Rubin, principal at InterPro Advisory, this month was named interim CEO of Horizon Lines. Some clarity is starting to emerge. Virginia created a centrally managed portwide pool that's now in its third phase. The Ocean Carrier Equip- ment Management Association runs six regional co-op pools with 136,000 chassis at South Atlantic, Gulf and Pacific Northwest ports, and in inland regions. Chassis supply is a tougher nut to crack at the largest U.S. port gateways — Southern California and New York- New Jersey. Each has a hodgepodge of chassis pools that don't serve all termi- nals. The disjointed system is a cause and effect of wasted truck trips, slow equipment turnover and congested terminals. "It's a circular situation — chassis shortages cause delays at terminals, and delays at terminals cause chassis shortages," said Tom Heimgartner, president of Best Transportation in Port Newark, New Jersey. Port and industry leaders in Los "THERE IS NO ONE SOLUTION. IF YOU SHIP ACROSS THE COUNTRY, YOU HAVE TO ADJUST TO SEVEN DIFFERENT MODELS." The nation's three largest ports seek new frameworks to resolve a chassis market in crisis By Joseph Bonney and Bill Mongelluzzo GOING GRAY

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