Guidebook for Assessing Evolving International Container Chassis Supply Models (2012)

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32 | 32 U.S. Chassis Supply: Regional Perspectives Key Messages The prevalence of different chassis supply models, and the size of related chassis fleets, differs greatly by region. But all chassis supply models are in play in each region. Northeast: Neutral pool model most prevalent (45%), followed by ocean carrier chassis supply model (35%). In all other coastal regions (South Atlantic, Gulf, West Coast), the co-op pool predominates, followed by the ocean carrier model. Midwest (inland rail terminal): Co-op pool model most prevalent (60%), followed by ocean carrier chassis supply model (20%). The motor carrier model is most significant in the South Atlantic and Gulf Regions, but represents only 10% in both cases. Marine and rail terminals exerted significant influence in the rise of chassis pools over the past 10 years to alleviate terminal capacity constraints and improve operating conditions. NCFRP Report 20 | Guidebook for Assessing Evolving International Container Chassis Supply Models

Guidebook for Assessing Evolving International Container Chassis Supply Models | NCFRP Report 20 | 33 4.1 Regional Variations in the U.S. Supply Models The prevalence of different chassis supply models and the size of related chassis fleets differs greatly by region; indeed, the U.S. chassis supply landscape is rather heterogeneous and has been evolving in response to different regional influences. The following Figure 4-1 provides an overview of the regional distribution of active ocean container chassis in the U.S., by type of chassis supply model (excluded are chassis that are laid up or otherwise not currently in service). It should be recognized that this regional breakdown is an approximation and is continually evolving. Figure 4-1. Approximate Active Chassis Supply Models by Region Source: CPCS estimate and mapping of various data sources collected by the research team, including through consultations with industry stakeholders. Tables 4-1 to 4-5 provide an overview of chassis supply models in each of these U.S. regions, including key players, major influencers, and their evolving context. Again, these figures represent active chassis and the discrepancy with the total population of 565,000 is accounted for by inactive and laid-up chassis.

34 NCFRP Report 20 | Guidebook for Assessing Evolving International Container Chassis Supply Models | 34 Table 4-1. Northeast U.S. Chassis Supply Summary In the Northeast, the neutral pool market share has increased by 15 percentage points in the last year as two co-op pools— Maher terminal (approximately 8,000) and NERP (approximately 4,000) have converted to neutral pools managed by TRAC Intermodal and Flexi-Van, respectively. The change to neutral pools was influenced by the ocean carrier’s strategy to exit providing chassis. Since the conversion, several former co-op members have implemented or announced plans to eliminate providing chassis. Table 4-2. South Atlantic U.S. Chassis Supply Summary South Atlantic Wilmington, Charleston, Savannah, Jacksonville, Charlotte, Atlanta, Miami 70,000 chassis (est.) Model Market Share Description Ocean Carrier Owned and Operated 30% On terminal, controlled by ocean carriers. Co-op Pool 55% On terminal, controlled by CCM operating company. Neutral Pool 5% TRAC Rail pool, Flexi pool (at rails) and DCLI. Motor Carrier- Supplied 10% Only includes motor carrier owned or long-term leased chassis where motor carrier is IEP. In the South Atlantic, co-op pools predated the formation of CCM, which started its pool in 2007 by combining two multi- carrier co-op pools. The marine terminals in this region are operating terminals, two of which formed a discussion agreement to harmonize chassis operations because there is significant equipment flow between them. These operating terminals influenced the ocean carrier decision to support a single chassis pool (the CCM co-op). Northeast Boston, NY/NJ, Philadelphia, Baltimore, Norfolk 80,000 chassis (est.) Model Market Share Description Ocean Carrier Owned and Operated 35% On -terminal, controlled by ocean carriers. Terminal Pool 15% Hampton Roads (Norfolk) chassis pool. Neutral Pool 45% Includes TRAC Metro, Flexi-Van, Northeast Regional Pool (NERP) and DCLI. Motor Carrier- Supplied 5% Only includes motor carrier owned or long-term leased chassis where motor carrier is IEP.

Guidebook for Assessing Evolving International Container Chassis Supply Models | NCFRP Report 20 | 35 Table 4-3. Midwestern U.S. Chassis Supply Summary Midwest/Rail Only Chicago, Ohio Valley, Tennessee Valley, St. Louis, Kansas City, Denver/Salt Lake 100,000 chassis (est.) Model Market Share Description Ocean Carrier Owned and Operated 20% On terminal, controlled by ocean carriers. Co-op Pool 60% Includes Chicago and Ohio Valley [Chicago Ohio Valley Consolidated Chassis Pool (COCP)], Mid-South (Memphis and Nashville), Midwest (St. Louis and Kansas City), and Denver Consolidated Chassis Pool (DCCP) (Denver and Salt Lake). Neutral Pool 15% TRAC Rail pool, Flexi pool (at rails) and DCLI. Motor Carrier- Supplied 5% Only includes motor carrier owned or long-term leased chassis where motor carrier is IEP. The railroads partnered with their ocean carrier customers to develop co-op pools in this region as terminal capacity constraint occurred in the middle part of the past decade. Prior to this effort, most ocean carriers operated their own chassis fleet. Since chassis were predominantly stored on-terminal, reducing the number of units to likewise reduce chassis storage acreage was the main objective. Like the marine terminals in the South Atlantic, the railroads influenced the ocean carriers to support a single pool, which promoted the efficiency of the gray fleet concept. Table 4-4. U.S. Gulf Region Chassis Supply Summary Gulf Region Houston, New Orleans, Mobile, Dallas/Ft. Worth, San Antonio, El Paso 60,000 chassis (est.) Model Market Share Description Ocean Carrier Owned and Operated 25% On terminal, controlled by ocean carriers. Co-op Pool 50% On terminal, controlled by CCM operating company. Neutral Pool 15% TRAC Gulf Regional pool, Flexi pool (at rails) and DCLI Motor Carrier- Supplied 10% Only includes motor carrier owned or long-term leased chassis where motor carrier is IEP The Gulf region traditionally has had a fairly significant share of chassis pooled, and prior to CCM there were two large neutral pools, operated by TRAC and Flexi-Van. The ocean carriers decided in 2008 to expand the co-op efforts to the Gulf, and with the support of the railroads consolidated many of the ocean carriers that had participated in the neutral pool into the CCM product.

36 NCFRP Report 20 | Guidebook for Assessing Evolving International Container Chassis Supply Models | 36 Table 4-5. West Coast U.S. Chassis Supply Summary West Coast LA Basin, Oakland, Pacific Northwest (Portland, Tacoma, Seattle) 180,000 chassis (est.) Model Market Share Description Ocean Carrier Owned and Operated 33% On terminal, controlled by ocean carriers. Co-op Pool 43% Grand Alliance Co-op pool in Los Angeles Basin Pool (LABP) co-op pool of several ocean carriers, managed by Flexi-Van. TNWA [APL, MOL, Hyundai Merchant Marine Co., Ltd. (HMM)] VSA co-op. Marine terminals a mix of grounded and wheeled, while rails are wheeled. Terminal Pool 8% SSA pools in Los Angeles, Oakland, and Pacific Northwest. ITS in Long Beach. Neutral Pool 11% BACP, owned and managed by Flexi-Van in Oakland. DCLI. Motor Carrier- Supplied 5% Only includes motor carrier owned or long-term leased chassis where motor carrier is IEP. Fourteen marine terminals operate in the LA-Long Beach port complex, many of them either wholly operated by ocean carriers or in a joint venture with marine terminal operating companies. The development of the mega-alliance movement in the mid- 1990s gave rise to three major alliances—TNWA (APL, MOL, HMM), Grand Alliance (NYK, Hapag-Lloyd, OOCL), and CKYH (Cosco, “K” Line, Yang Ming, and Hanjin)—and container and chassis flow among and between marine and rail terminals dramatically increased. Each alliance created its own co-op chassis pool to dramatically reduce container/chassis mismatches for wheeled import cargo and to reduce chassis repositioning expenses.