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Agricultural shippers face added container chassis expense

CL, CMA-CGM, Cosco, Evergreen, Hanjin, Maersk, NYK and OOCL have announced plans to no longer provide chassis, the letter stated.
By Patrick Burnson, Executive Editor
September 09, 2010

In a letter sent to shippers today, the Agriculture Transportation Coalition (AgTC), said several major ocean carriers will no longer be providing container chassis.

CL, CMA-CGM, Cosco, Evergreen, Hanjin, Maersk, NYK and OOCL have announced plans to no longer provide chassis, the letter stated.

“NYK had announced an effective date of September 1, 2010, but this has postponed this,” said AgTC spokesmen.

According to the AgTC, Maersk has announced October 4, 2010 as the date for divestment of chassis at California’s ports and rail yards:

“Henceforth, the truckers will have the choice to provide their own chassis, use customer-owned chassis, or rent the chassis from Direct ChassisLink, a Maersk affiliate for $11/day. Of course, the truckers will likely charge the cargo owners additional amounts to cover their own extra operational and administrative costs.”

The move should hardly come as a surprise to West Coast shippers, however, as they were warned of this development at last June’s AgTC annual conference in San Francisco.

AgTC spokesmen allowed that the lines “correctly point out” that the U.S is the only market in the world where ocean carriers provide the chassis, and that stricter safety and reporting requirements will drive costs up further.

“While carriers have said that carriers and shippers should work together to jointly reduce costs, this appears to be a fairly significant increase in shipper costs (and administrative burden), with no recognition of the impact by the carrier, and no sharing of the burden,” AgTC said, adding that essentially, this amounts to a unilateral rate increase.

“So the question becomes - if the carriers regularly impose surcharges on the basis that they have additional costs, such as for bunker fuel, for terminal handling, shouldn’t they provide a freight rate reduction now that they are shifting a significant cost from themselves to the shipper?”

So far, said the AgTC, such requests, even from major shippers, have been rejected.

About the Author

Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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