Ex-Hanjin exec advises talks about chassis loss with US shippers

BILL ROONEY, president of WFR Solutions and the former president of Hanjin Shipping America, is calling for carrier-trucker-shipper talks about the disappearance of chassis once offered by container lines in the US.


Most carriers have ceased to offer chassis to shippers because it was a loss-making proposition. What was designed to distinguish one carrier from another ceased to do so when the majors joined in, after it became a cost without benefit.


Speaking at a webinar organised by America's National Industrial Transportation League, Mr Rooney said that carriers should have said that "we are going to change the way we do business and let's have a conversation about that. But that's a difficult thing to talk about."


Mr Rooney said the annual cost of operating a single chassis is US$2,000. Add leasing (or owning), maintenance insurance, and management costs, they total $5.25 a day or $1,916.25 per year.


Companies renting chassis charge $13 a day, but Mr Rooney said they generate revenue every other day. Moreover, the equipment is greatly in demand at peak periods and there is the cost of repositioning containers for which there is no revenue and money is lost in dwell time or when they are being repaired.


Of shippers, he said: "I have almost uniformly heard that there has not been a lot of dialogue, though I think it is picking up at this point."


Mr Rooney said there are about 650,000 chassis involved with 335,000 owned by carriers, 300,000 owned by lessors and 15,000 by other firms, reported American Shipper. New chassis cost US$8,000, and the average book value $3,000 to $4,000 per unit.


"I have faith in the market sorting this out," Mr Rooney said. "But the danger may be in the transition. How does the industry - carriers, truckers, shippers - how does everyone transition from one paradigm to the other without dropping the ball."
(Source:http://www.schednet.com)