Intermodal equipment owners, truckers split over "roadability" bill
Owners say increased inspections of containers, trailers, and chassis could cause delays; truckers laud the proposal's focus on safety.
By Staff -- Logistics Management, 9/1/2003
Legislation designed to shift responsibility for the safety of container, chassis, and trailers—the "roadability" of those units—has split the intermodal world into two camps. Reps. Richard Baker (R-La.) and Henry Brown (R-S.C.) last month introduced H.R. 2863, the Intermodal Equipment Safety and Responsibility Act of 2003. That bill would make safety the responsibility of the ocean shipping lines and railroads that own the equipment, rather than the motor carriers that pick up and deliver containers and chassis. In addition, the bill would require federal authorities to inspect equipment and maintenance records at least every three months, and to inspect and repair equipment each time prior to offering it to a motor carrier.
Organizations that have voiced concern about the proposed legislation include the Association of American Railroads, the Waterfront Coalition, the Ocean Carriers Equipment Management Association (OCEMA), the International Institute of Container Lessors, the National Association of Waterfront Employers, the National Marine Safety Council, the U.S. Maritime Alliance, the Pacific Maritime Association, and the National Industrial Transportation League.
Opponents worry that conducting detailed inspections every time a container or chassis moves will slash productivity and cause delays in the name of safety. They also worry about the potential additional cost. "In the federal regime these types of inspections are required once a year," says Jeff Lawrence, a lawyer with Sher and Blackwell in Washington, D.C., and general counsel for OCEMA. "There are ongoing requirements for drivers to do walk-around inspections each time they pick up a chassis. And providers regularly do maintenance and inspections on them as issues come up. But to have a full inspection every time any chassis moves in and out of a warehouse, DC, or factory—the potential for cost would be in the billions.
"What this legislation [will do] is shift the economic burden in a way that will yield virtually no benefit," Lawrence continues. "It would yield huge hangups and bottlenecks at ports and railheads around the country, along with billions of dollars in costs which would ultimately get passed to U.S. businesses."
But the motor carriers that haul intermodal containers refute those arguments. The American Trucking Associations (ATA) came out at the end of July in favor of the bill, citing it as "long overdue" and lauding its focus on equipment safety. "If [the ocean carriers] fix [the equipment], a motor carrier will be able to come in and spend less time in the port because they won't have to spend hours looking for good equipment," says Bill Wannamaker, the ATA's director of intermodal and governmental traffic operations. "That's all we're asking. Fix the equipment. Make it safe."
The ATA believes that trucking companies should only be held accountable for the safety of their own fleets and not for the condition of equipment they've received on loan from ocean and rail carriers, says Wannamaker. Assigning responsibility to the equipment owner should be a simple, clear-cut matter, he argues. "Whose name is on the inspection sticker?" he asks rhetorically. "That's who's responsible."
The question of possession versus ownership appears to be at the heart of the matter. Ocean carriers, railroads, and leasing companies own the chassis and containers, but loan that equipment to motor carriers for local pickup and delivery.
"[Our opponents] suggest that 'control' means that the equipment is in your possession," Wannamaker says. "So as soon as you take possession of equipment you've never seen you're responsible for all its flaws? That's ludicrous." The bill addresses that issue by defining the "equipment controller" as any party with a legal right, title, or interest in the equipment. Only motor carriers to whom the equipment owner has contractually delegated responsibility for maintenance and repair would be held liable; the wording specifically excludes motor carriers that simply provide or arrange intermodal transportation.
Wannamaker also points out that although the police cite motor carriers hauling intermodal equipment for any safety shortcomings they detect during roadside inspections, that does nothing to improve equipment safety. "The police can write citation after citation against the same [motor] carrier, and there's nothing they can do to make it safer," he says. "And why? Because [the equipment's] not theirs."
But Tom Malloy, a vice president at the Intermodal Association of North America (IANA), says that assigning responsibility is not so simple as the truckers make it out to be. He says a working group composed of representatives from rail, ocean, trucking, and leasing companies that has been meeting for about five years has found that the matter is far more complicated than simple asset ownership. "The group has come into agreement that there are times when it falls to the motor carrier who has it on the street and other times when it's on the provider of the equipment," he says.
Although shippers are not directly affected, the issue bears watching. That's because whichever way it finally is decided—whether by congressional fiat or by industry consensus—the cost of compliance eventually is likely to be passed on to shippers in the end.
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