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Midwest marine chassis shortage worse than two months ago: TRAC
Source
American Shipper
Post Date
06/23/2021

The supply of marine chassis at US Midwest rail hubs, which had already worn thin two months ago, has gotten even worse and is causing container stacks to pile into the thousands and storage bills to escalate to unthinkable levels, according to conversations with importers and chassis provider TRAC Intermodal.

There has been plenty of blame to go around for storage bills that by some accounts have exceeded $10,000, with fingers pointed at railroads, chassis providers, and shippers, too, who are holding onto chassis longer than ever before and hurting other shippers in the process.

The primary factor contributing to the equipment shortage across all chassis providers is the sheer volume of containerized cargo that has been flooding the US for the last 11 months and counting. The number of 40-foot containers on the North American rail network last month increased 27 percent year over year and 4.2 percent compared with May 2019, according to the Intermodal Association of North America (IANA).

TRAC currently has 11 cities in which chassis supply is ¡°constrained¡± or ¡°in deficit¡± ¡ª the two most severe levels of a shortage ¡ª up from nine markets two months ago, the equipment provider told JOC.com. In most of these 11 locations, competitors DCLI and Flexi-Van Leasing are also extremely low on available chassis, especially 40-foot units, according to conversations with local drayage providers.

Val Noel, chief operating officer of TRAC, noted that during the cargo surge, customers have regularly taken more than 11 days to return chassis, which s up harming other shippers waiting to receive their loads.

¡°When we look at [the percentage of chassis out for more than 11 days], we are at a low point of like 31 percent, and a high point of 43 percent,¡± Noel told JOC.com. ¡°Normally it¡¯s in the 17 to 18 percent range, but now 43 percent in one market are out on the street greater than 11 days. When you build your fleet, you build it based upon equipment turning. When it doesn¡¯t turn, and you throw this huge demand, its going to some bumps in the road.¡±

The latest location where TRAC is seeing surging demand and diminishing supply for chassis is the Seattle-Tacoma area of the US Pacific Northwest. Noel said TRAC is moving 600 chassis into Washington state to address the shortage caused by a recent uptick in port volumes.

¡°It¡¯s not from a lack of effort or willingness; our company has invested hundreds of millions of dollars into this thing,¡± he said. ¡°But it¡¯s just a struggle trying to keep up with the volume as well as the dwell. And I know dwell sounds like an excuse, but it¡¯s having a profound impact on us.¡±

Ground Zero: Chicago and the Midwest

TRAC is seeing the greatest shortage of chassis in the Midwest cities of Chicago, Illinois; Cincinnati, Ohio; Cleveland, Ohio; Columbus, Ohio; Detroit, Michigan; Indianapolis, Indiana; Louisville, Kentucky; and Pittsburgh, Pennsylvania.

The number of 40-foot containers in May that were offloaded in the Midwest jumped 35 percent from a year ago and 14 percent compared with May 2019, according to IANA. That has resulted in a container deluge in Chicago, in particular.

¡°Our industry has held its own in the Northeast and in the Gulf Coast,¡± Noel said. ¡°The spot in the last eight weeks area that¡¯s changed has been the inland Midwest markets. We¡¯re just seeing large quantities of cargo come into these cities. [Importers] consume all the chassis out on the street, and then you get another unit train, and we just dont have enough assets.¡±

Union Pacific Railroad (UP) has placed between 1,500 and 2,500 containers in stacks in the Global IV terminal in Joliet, Ilinois, just outside Chicago, due to the lack of chassis, according to conversations with equipment providers and trucking utives in Chicago. Some sources have told JOC.com the number is at least 2,000, if not more than 2,500, but a UP spokesperson declined to provide an estimate.

Each cargo owner with a container in those grounded stacks in Global IV must pay storage fees, a form of demurrage, even though the western US railroad will not say when these boxes will made available for pickup. Some containers have been inaccessible in stacks for more than a month, according to conversations with two importers and two freight forwarders.

TRAC and DCLI have told JOC.com that they are working as hard as possible to reposition enough chassis to whittle down the stacks in UP¡¯s Global IV facility.

Chassis shortages in Ohio and Indiana also demonstrate just how much volume is moving inland from US ports.

Noel said Cincinnati, Cleveland, Columbus, and Indianapolis historically would receive blocks within a larger unit train, averaging 100 to 175 containers that were switched in Chicago from trains that go directly to and from seaports. This year, however, Noel said railroads are building unit trains at ports that are exclusively for Ohio and Indiana rail hubs, disging 300 to 350 containers in single stops, on top of the demand already tappi


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