Don't Go East When West Is Best
Not surprisingly, many company executives concerned about their products hitting the shelves in time for holiday shoppers, are threatening to divert ships from the west coast to eastern US port cities. Delays at the Port of Los Angeles are being blamed on many factors, but chief among them are changes in chassis ownership and deployment. Prior to the 2007 recession, major carriers typically just added low chassis rates to container shipping customers as part of the total pricing package.
Read More Possible West Coast Port Shipping Strike
Recently, many large ocean carriers including Maersk, Yang Ming, CMA, OOCL, NYK Line and Evergreen, have elected to stop providing chassis at several US ports due to major logistics issues and slim operating margins. Under the new arrangement, carriers first sell their chassis to a container leasing company that turns around and signs a user agreement with the carrier. The problem is that this is occurring at a time when carriers often have vessel-sharing agreements between three or more lines. This produces a need for "split deliveries" where a container might be dropped off at one terminal while the chassis is sent to another, creating a logistical nightmare. Confusion and delays seem inevitable.
The Great Chassis Shake-Up
Labor is also directly affected by this new operating model. Questions arise like which union is responsible for moving chassis with split-deliveries? Drayage drivers? Alternatively, there is fear among port union labor that this will be an entry point for management to assign these tasks to non-union help, possibly intensifying and stalling already protracted negotiations.
In an effort to smooth through these rough waters, outside experts have recommended implementing a pooling system involving the three dominant chassis management companies: Flexi-Van, Direct ChassisLink Inc., and TRAC Intermodal. The plan had given rise to concerns about possible anti-trust issues but they were resolved this month with a green light from the Justice Department. Nevertheless, a quick fix for the complex labor and chassis deployment issues seems improbable while continued delays appear to be the "new normal."
Make Port of Oakland Your New Normal
Why risk delays when you could be efficiently shipping cars out of the Port of Oakland? In an effort to help dealers and brokers, West Coast Shipping is offering for a limited time only, free transport from the Port of Los Angeles to our location. For shipping cars overseas, and for more information on how to ship cars through Port of Oakland, please contact our professionals for further details.