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 ·

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 [email protected]

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

· All Topics
Latest Whitepaper
Download: Material Handling Technology Survey Results
Readers are buying and replacing warehousing and distribution center software, but not before they do their own homework.
Download Today!
From the July 2017 Modern Materials Handling Issue
Shuttle and case dispensing technologies help Southern Glazer’s Wine & Spirits keep up with demand in one of the most competitive markets in the country.
Southern Glazer’s Wine & Spirits: Designed to Last
Automation: What’s at the heart of your system?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Warehouse Execution Systems (WES): The Pathway to Same-Day Fulfillment
This webinar explores the processes and technologies enabling same-day, same-hour order fulfillment using intelligent supply chain software.
Register Today!
EDITORS' PICKS
Southern Glazer’s Wine & Spirits: Designed to Last
On Long Island, the country’s premier distributor of wine and spirits turned to shuttle and case...
GE Healthcare System Report: Lean repairs
Self-driving mobile robots improve cycle times and reduce floor space at GE Healthcare’s new...

Materials Handling Innovation (and why it matters)
Every company considers itself an innovator. It’s time to include materials handling leaders in...
Thrive Market’s Startup Distribution Network
How does a fastgrowing, e-commerce startup company build out order fulfillment capabilities? Thrive...