Intermodal Relief

Some federal regulations just make sense. Take the new rules governing the maintenance of intermodal chassis, passed as part of the Federal Highway Reauthorization bill and signed into law by the President in August, 2005. It's only reasonable to set standards and assign responsibility for the maintenance of the estimated 750,000 to 1,000,000 intermodal chassis that haul cargo containers up and down America's highways. But up until now, no one has been responsible... and the trucking industry has been paying a heavy price for it.

CHASSIS ROULETTE

Historically, if one of your drivers picked up an intermodal cargo container at a port or a railroad terminal, he or she would first need to pick up a chassis. But until the driver conducted a pre-trip inspection, he or she would have no idea what they were getting.

"You could have good ones one week and then the next week you'll get ten bad ones right in a row," says Randy Guillot, president of New Orleans, LA-based Southeastern Motor Freight. "The lights are out, the air lines are broken, the brakes are out of adjustment. That's what we've been living with as an industry.

"The big issue for me was that we don't own the chassis, we only operate them. Yet we were the ones responsible on the roadside inspections when DOT would pull you over," Guillot says. "We were the ones whose safety records were being dinged because of chassis issues. We had the opportunity to inspect, but we didn't have the opportunity to maintain these units. Nor did we see maintenance records. So we were being blamed for everything on those chassis and we didn't own them or maintain them. That's a big sore spot on our side."

"A lot of the chassis are older than hell," says Curtis Whelan, executive director of the Intermodal Motor Carriers' Conference of the American Trucking Associations (ATA). "When you go to the area where the trucker picks up the chassis before he picks up the container, a lot of them, even to the untrained eye, look like pieces of junk. They're rusty, there might be a light hanging off, or not there at all, you don't know if the attachment mechanisms are working properly.

"This was not a deal where there's a nice brand-new, clean chassis waiting for you," he says. "You were sent to a chassis area and it was up to you to find a good one, and there were days when the ones that were out there were not necessarily up to anyone's standards. But if you're a trucker and you're supposed to pick up the container, what are you going to do? Do you wait for a better one to be dropped off, or do you say, ‘I'll take this one. This is the best I can get.' It's deferred maintenance. These things were looked at once a year and they had a stamp put on them. There isn't a lot to them, but they are a very safety-critical portion of moving a very heavy container somewhere."

MARKETING TOOL

How did this sad state of affairs come about? According to Whelan, it all happened because of a marketing strategy.

"In the rest of the world, the trucker generally owns his chassis, and what was done (in the U.S.) was the ocean carriers wanted to keep their chassis as part of their marketing," he explains. "So, when they would go out and get business, part of the deal was that they had chassis available."

As the intermodal industry grew in North America, ocean carriers, railroads and trucking companies all agreed to adhere to the Uniform Intermodal Interchange and Facilities Access Agreement. The agreement spelled out which of the three stakeholders was responsible for which aspects of the intermodal shipping system, yet, strangely, it left the matters of chassis maintenance and inspection up in the air.

"Under the agreement, if I pick up a chassis and I'm moving a container around and some damage occurs, the issue becomes, who has to pay for that?" Whelan says. "And the agreement was not particularly specific. So there was always a battle, for instance, with tires, as to whether or not tire damage that occurred while the chassis was in the possession of the motor carrier or the trucker was because the driver hit a curb, or didn't have it inflated correctly, or was the result of normal wear and tear on the tire itself."

Worse yet, there were no requirements for the owners of the chassis to identify themselves on the equipment. So when a Department of Transportation (DOT) roadside inspection uncovered a safety violation on a chassis, the inspector had no choice but to cite the driver and his/her trucking company. After all, possession is 9/10ths of the law.

Of course, drivers are required to conduct a pre-trip inspection of the chassis, but that can lead to its own complications. "If you hook up to a chassis and it's in horrible condition, the driver's going to catch that on his pre-trip inspection," Guillot explains. "Then he's going to have to wait for a repair or look for a different unit. Time delays at the wharf trying to get it repaired can be substantial, and that's been a thorn in our side."

REACHING CONSENSUS

Clearly, the trucking industry had an unworkable—and unacceptable—situation on its hands.

In 2004, the ATA formed the Intermodal Motor Carriers Conference, and the group's first task was to address what had become known as the "roadability" issue with the ocean carriers and the railroads. After much negotiation, the three industry stakeholders agreed to rules that would require the chassis owners to identify themselves on the equipment, would set standards for maintenance, and would establish responsibility for safety and maintenance problems.

"The talks were held in a very honest and open way, and a lot of trust was built up," says Jeff Lawrence, executive director of the Ocean Carrier Equipment Management Association (OCEMA). "The idea was to allocate, on a common-sense basis, the responsibility for inspection, maintenance and repair among the parties, based on their logical roles."

"When we came to Congress in March of 2005, our agreement was maintained throughout the hearing and markup process," Whelan says. Since that agreement has been signed into law, the legislative language has been turned into regulatory requirements by the Federal Motor Carriers Safety Administration (FMCSA), and submitted for review by the White House Office of Management & Budget.

"Given the fact that this was the product of an industry consensus, the new FMCSA Administrator didn't expect to see too many problems with it," Whelan says. "We're confident that there are no hidden issues out there that we haven't addressed. Whether that's true or not, we'll see after that goes public."

"The fundamental thing was that there would be a federal approach to this, and that FMCSA would oversee it," says OCEMA's Lawrence. "There's a provision that the intermodal chassis have to be identified to an equipment provider, and there's a systematic maintenance requirement. There's a rather specific set of inspection requirements for motor carriers, for the pre-trip inspection. There's a process where the equipment provider has to receive any indications that there's a problem with the equipment, and to sideline any equipment if there's a defect."

CHASSIS POOLS

"What gives me comfort is that, since the enactment of the law, even though we don't have regulations, we have already seen some very sizeable moves towards going to chassis pools and other issues that seem to be a logical outgrowth of the fact that the equipment provider is now going to be clearly responsible for his equipment," says Whelan.

He cites the Port of Virginia as a model for incorporating the chassis pool concept into the operations of a busy intermodal hub. The Port's chassis pool establishes operating procedures for the use and management of thousands of intermodal chassis, eliminating waste, costs and headaches.

"From the Port management and ocean carriers side it's great, because they got to reduce their inventory of chassis from about 22,000 to just under 16,000," Whelan explains. "So, from an acres point of view—how much space are we using for these chassis—they have been able to minimize the space the chassis take up. In addition they have been able to dramatically improve the reliability of the chassis, so instead of having a big ‘needs repair' broken pile taking up space somewhere, they have a very high level of reliability."

Similar enterprises are springing up at ports and railyards across the county, Whelan says, citing new pools at railroad yards in Denver, CO, and Jacksonville, FL, just in the last 18 months. "Faced with these new requirements on roadability, the people that own these resources are finding that it makes a lot more sense, from a business standpoint of trying to maximize the chassis, of having a third party maintain them and eliminate all those various headaches," Whelan explains.

"As time has progressed (the owners) have gotten much better with the equipment, and when the regulations are in effect it will get better still," says Guillot, who sits on the Board of ATA's Intermodal Motor Carriers Conference.

"Now, we're not anywhere near to scratching the surface of how many chassis are actually going to be in a pool," says Whelan, "but the fact that these are coming on board at strategic points and are being evaluated by the equipment providers leads me to believe that that's going to be the way we move. In the interim, if you're an ocean carrier and you've got chassis, you're now going to be responsible for seeing that they're maintained properly, there will be standards as to what that means, and it will be clear that that is your responsibility—deficiencies will be charged to you, not to the driver or the motor carrier. And when we get into who broke what we'll have a far better idea of who is responsible."

SAFETY IS KEY

"The trucking industry's big push all along has been safety," Guillot says. "We want these things safe on the road. It's not our mechanics working on these units; it's the steamship lines', it's the railroads', the leasing companies'. It's their mechanics who work on these things, and if you have your mechanic working on it then you should be responsible for maintaining it, and knowing what's going on with it. Don't put that responsibility solely on the truck driver.

"Maintain the unit properly," he goes on. "Let us do a visual inspection to make sure it's safe from a visual standpoint. But we don't know all the mechanics, we don't know the history—did that particular unit get in a wreck last week? Did that particular unit break down last week? Do we have to double-check the brakes because they just got repaired? We don't know those things.

"As long as they do their part, we'll do our part," Guillot concludes, "and the roads will be safer every day."

Editor's note: Because the intermodal regulations are under review by the White House Office of Management & Budget, they are, as yet, unavailable for publication. For more information, go to:

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