Chassis

JOC: Difficult solutions to US chassis chaos emerge

Containers and chassis have a symbiotic relationship in the supply chain, so intertwined that freight grinds to a halt when the two are out of sync. The chassis is a linchpin between on-time deliveries and delays, as most recently shown when shippers front-loaded cargo in December to avoid potential US tariffs in January. Equipment shortages arose in January in Los Angeles; Long Beach; Chicago; and Memphis, Tennessee.

The problem is simple even if the solutions are not. Lowering trigger thresholds, building a strategic chassis reserve, and constructing a truly open chassis network would mean higher bills for beneficial cargo owners (BCOs).

The first two options would require more equipment, which could idle for months and months, depreciating in value without generating any return on invested capital. The final idea would also disrupt the exclusive deals between ocean carriers and chassis providers to provide competitive rates to BCOs. Each, though, can prompt a well-deserved discussion on how to stop the equipment shortages from happening time and time again.

The issue boils down to an idiom: you don’t build the church for Easter Sunday. To do so would be a great customer service decision but a poor business one.

Chassis providers are trying to solve the problem by adding more equipment annually.

By the end of 2018, Direct ChassisLink, Inc. (DCLI) had purchased 5,600 marine chassis, upgraded more than 27,000 pool chassis with radial tires, and converted 80 percent of the fleet to LED lights. DCLI has invested $45 million to upgrade its existing fleet and spends millions each year in repairing broken chassis.

TRAC Intermodal bought nearly 8,000 chassis in 2018 and refurbished another 8,000.

Flexi-Van Leasing built more than 4,000 units in 2018 and upgraded 15,000 with radials and LEDs across the country. It also plans to continue to add radial and LEDs and recondition older units.

Demurrage and detention/per diem penalties, nevertheless, have skyrocketed in recent years. In 2014, fees from ocean carriers surged 90 percent. In 2015, they rose another 86 percent because of West Coast port strikes, according to the Federal Maritime Commission (FMC).

After a decline in 2016, penalties rose 30 percent in 2017 to about the same total as 2015. Terminal operator demurrage rates show a similar trend, according to the FMC.

Much of the shortage goes back to when the ocean carriers exited the chassis business — sort of. Evergreen and Matson are the only major ocean carriers still using their own chassis; others tie the hands of truckers by signing exclusive deals with chassis providers. The benefit is that BCOs pay very little for a chassis, but the downside is the ocean carrier keeps its hand firmly in the game by dictating which equipment must be used.

When those limited options are unavailable, terminal and container demurrage quickly follows. Thousands of dollars in unnecessary penalties are racked up per shipper because the terminal becomes a storage yard and a trucker is forbidden from using its own chassis.

Not all demurrage is tied to chassis shortages or union strikes. Fees are also tied to poor weather, customs inspections, or congestion issues. Finding a better chassis business model, however, could reduce the frequency of penalties and minimize disruptions.

Given chronic congestion in Southern California; New York and New Jersey; Norfolk, Virginia; Charleston, South Carolina; Savannah, Georgia; Memphis, Tennessee; and Chicago, everyone benefits by eliminating chassis availability as a contributing factor.

“There is no one problem to be solved across all markets. Each market is unique and faces a different set of supply chain-driven circumstances that can lead to intermodal inefficiencies. Looking for a ‘one size fits all’ solution that is solely focused on chassis will not meet the complex needs of ports and inland intermodal hubs,” DCLI said in a statement to JOC.com.

So, what is the answer? Should shippers hold enough chassis in inventory for the worst-case scenario even if they go unused for months?

Lower the stress-trigger threshold

Every chassis pool administrator establishes a utilization percentage that, when exceeded, requires equipment providers to add more units as soon as possible. It’s a trigger signifying a pool is stressed.

Utilization percentages require some complicated calculations, including how long BCOs hold on to chassis, but it’s a figure that factors in broken equipment. So, if 5 percent of chassis require maintenance and repair, the utilization percentage drops to 95 percent.

There is no uniform trigger point covering all ports and inland rail locations. In some markets, that trigger may be 85 percent. Port officials in Savannah, Georgia, and Charleston, South Carolina, convinced Consolidated Chassis Management (CCM) to lower its trigger from 80 percent to 75 percent. Triggers might be reset at 75 percent in the Gulf and interior hubs such as Chicago and Memphis, according to sources.

Jim Newsome, CEO of the South Carolina Ports Authority, believes the proper trigger should be 70 percent.

“The penalty for not having a chassis is huge. You’re into expensive demurrage of $100 or $150 per day, delays in terminals, and bobtails,” he said. “The idea that you cut the chassis fleet as close as you can to perfection doesn’t make sense to me. Shaving the chassis fleet to the bare minimum necessary drives inefficiencies in the supply chain.”

Some of the utilization problems are the BCOs’ own doing. In January, the chassis supply at the Port of New York and New Jersey was lower than usual as dwell times — the time a chassis is out on the street — went up among BCOs. TRAC sent a bulletin to customers urging them to return long-dwelling equipment, some of which it claimed as out for more than 15 days.

The Pacific Merchant Shipping Association reported dwell times in November averaged 3.5 days, up from 2.5 days last spring. About 13 percent of chassis were out on the street for five or more days, up from 5 percent last spring.

Building a reserve fleet

Another idea is establishing a reserve fleet in cases of emergency similar to the Strategic Petroleum Reserve — an emergency supply of crude oil in barrels located underground in Louisiana and Texas.

This is similar to a lower trigger point because both would require providers to increase the supply of chassis in the United States. Purchasing new chassis, however, is getting more expensive because of tariffs on Chinese-made units and rising US steel prices because of tariffs.

TRAC has been pivoting toward this idea with what it calls a “safety stock inventory.” Extra roadable chassis are stored in key markets but not placed into active use until its pool is stressed.

“[The chassis] may sit months or even an entire year and never move. We’re willing to make the investment in anticipation of spikes in demand,” said Val Noel, TRAC’s chief operating officer (COO).

Flexi-Van also has ready reserve units in large markets.

The problems with a reserve fleet are similar to lowering triggers.

Who pays for the new units? How often is the reserve used, and are the proper amounts deployed in the right locations?

An analogy is supplying water in supermarkets before a hurricane or blizzard. Pictures on television and social media show empty shelves, so why wouldn’t a supermarket always have enough water in stock? Under the supply chain model, a supermarket chain will transport essentials from other cities ahead of the storm. It doesn’t make financial sense to always carry gallons of water and pallets of batteries in inventory when such storms happen a few times per year.

The same applies to chassis. Is it smart for them to collect dust? It might be a wise customer service goal but an unwise and costly business decision.

“It’s a tough balancing act for us or anyone,” acknowledged Shawn Tibbetts, COO of the Virginia Port Authority, which owns the Hampton Roads Chassis Pool II. “We plan for the peak, but then we look at the valleys in demand as opportunities to upgrade the fleet, maintain it, and make the pool as efficient as possible.”

Gray pools are not truly open

Even in existing gray pools, also known as interoperable pools, the main contributors are TRAC Intermodal, DCLI, Flexi-Van Leasing, and the North American Chassis Pool Cooperative (NACPC).

Other chassis providers such as TAL International, Milestone Equipment Holdings, American Intermodal Management (AIM), and Star Leasing are permitted to contribute to gray pools, but it would make no sense.

Even if their equipment were used, they wouldn’t book the revenue under “box rules.” When a drayman uses a TRAC pool chassis on a Maersk Line container, DCLI actually gets the revenue. An electronic data interchange (EDI) message is sent when a trucker leaves the terminal. The equipment provider collecting the money is based on whose box is hauled. In the Maersk example, DCLI invoices the customer even though a TRAC pool chassis was used.

The revenue is even in the end because TRAC would collect revenue, for example, when a DCLI chassis is used on an APL container.

Since AIM, Milestone, and Star Leasing don’t have any contracts with ocean carriers; however, they wouldn’t be paid in the gray pool. They have their own depots. The clock begins when the chassis leaves and ends when it is returned. No EDI message is sent upon exiting the terminal.

One option would be to eliminate box rules to create a fully unrestricted open choice in CCM pools.

Flexi-Van fully supports the idea, but DCLI opposes it. DCLI told JOC.com that neither box rules nor choice improves or impedes availability, and neither is relevant to chassis supply.

Use the airport model

One way to even the playing field is to find ways to allow AIM, Milestone, Star, and TAL to better compete on daily rentals to truckers. A solution can be found in the airport car rental industry.

Currently, DCLI, TRAC, Flexi-Van, and CCM pools have “counters” and “cars” on the “airport” grounds, while AIM, Milestone, and Star Leasing are relegated to offsite properties. Naturally, any short-term user would use a provider on the airport grounds.

But at the Port of New York and New Jersey, traditional chassis providers have been kicked off terminal grounds. The same could occur in the future in Los Angeles.

Gene Seroka, executive director of the Port of Los Angeles, said moving chassis to near-dock sites would free up as much as 80 acres of terminal space for containers. The port has identified several parcels that could qualify and is exploring those options.

Nathanial Seeds, CEO of AIM, said he would consider establishing a joint off-site location if more ports end up doing the same. The idea is co-locating outsiders in a building near the traditional pool depot. Each would have a counter and a lot, similar to how Avis, Budget, Hertz, and other rental car companies co-habitate in an airport. In this case, AIM, Milestone, Star, and TAL are the rental companies.

“If the chassis providers were no longer on the terminal grounds, this proposal would make sense. You would be competing on service, quality, price, and innovation like the car rental companies. We know the chassis space needs this desperately,” Seeds said.

Southern States model

One proposed model championed by the Georgia Ports Authority, South Carolina Ports Authority, and NACPC would establish a Southern States Chassis Pool. It would be a gray pool but not completely open.

Only NACPC, TRAC, DCLI, and Flexi-Van could contribute to the pool under the proposal presented to the Ocean Carrier Equipment Management Association, which has been skeptical of the idea. Milestone and AIM would be allowed to contribute to the Southern States Chassis Pool because NACPC would handle the invoicing on all transactions and disperse the founds to the appropriate chassis provider.

The real benefit of the Southern States model is at-cost price. Regardless of which chassis is utilized, a flat price would be established for BCOs, likely between $13 and $16 per day based on current pricing.

The two port authorities already oversaw the addition of 4,000 chassis last year, and Georgia will open a new 12-acre chassis yard before this year’s peak.

Assuming control of the problem

“If you are a global logistics director and you have any sort of consistent, measurable volume, you must have your own chassis fleet,” said Andrew Nutting, senior logistics manager with 1A Auto, whose previous stops included Bob’s Discount Furniture and TJX Companies.

Shippers wouldn’t necessarily need to buy their own chassis, which costs between $10,000 and $15,000 per unit. Nutting said having a chassis fleet under their control is the key.

Leasing chassis on a long-term agreement is a popular alternative. Milestone offers such an arrangement, as do most other equipment providers.

DCLI believes a better solution would be building out the digital supply chain platform to track assets. DCLI is an investor in the Blume Global platform, formerly known as REZ-1.

There are immediate benefits for BCOs using their own chassis at marine terminals, which ground containers. Some inland rail terminals mount boxes onto chassis beforehand, so a “flip charge” is assessed to put it on another chassis. Typically it’s about $50 or $100.

“The return on investment for a chassis is less than three years. If you anticipate being in business for the next three years and importing containers, go buy chassis or lease them. It just makes total sense,” Nutting said.

Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe.

 

SOURCE: JOC

Milestone Chassis - GN-TRI

Transport Topics: Milestone Chassis Expands Footprint in Western, Midwestern Markets

Transportation equipment company Milestone Chassis is looking to address nationwide chassis shortages with several service improvements and two new locations.

New Locations

Milestone has expanded offerings for the Los Angeles-Long Beach, Calif., market, including after-hours pickup (5 p.m. or later) and an increase in inventory levels for available equipment types (40-foot gooseneck, 20-foot tri-axels and 20-foot sliders).

To better serve Midwestern markets, Milestone will open locations in Cleveland and Detroit. The former has close proximity to Norfolk Southern and CSX rail ramps, the latter to Norfolk Southern, CSX, CP and CN rail ramps.

“We listened to our customers,” Milestone Executive Vice President Doug Hoehn said in a press release. “We have demonstrated our commitment to being the nation’s premiere intermodal lessor in 2018 — you can expect a continuation of these efforts in 2019. We will continue to evolve our offering in line with market needs.”

 

About Milestone: 

With a combined fleet of approximately 85,000 chassis, trailers and domestic containers – Milestone is one of the nation’s most comprehensive lessors of transportation equipment. Since 1995, we have provided asset management services, financing, maintenance and more to customers that describe us as flexible, trustworthy and customer-centric. Let us optimize your transportation needs!

 

SOURCE: Transport Topics 

Milestone Chassis & HTA

Milestone Chassis Partners with HTA to Reduce Turn Times

Problem Solvers

Truckers in Southern California who encounter an emergency requirement for a chassis, or wish to supplement their existing fleet during the peak season, can now turn to a joint pool established by the Harbor Trucking Association (HTA) and Milestone Chassis.

With chassis shortages intensifying during the peak shipping season, the HTA, with about 100 member companies in Los Angeles-Long Beach, on Oct. 4 launched its partnership with Milestone to offer members round-the-clock access to a diversified chassis fleet at their combined yard in Wilmington, California.

“It really started to hit in the last couple of weeks,” Doug Hoehn, executive vice president of Milestone, said Wednesday. Chassis shortages and dislocations occur on and off throughout the year in the largest US port complex, but they are especially prevalent during the late summer-autumn peak shipping season.

To read the rest of the story on JOC, click here.

 

SOURCE: Journal of Commerce

John Kiss

Meet John Kiss

John Kiss enjoys getting creative, especially when it comes to architecting deals for Milestone customers. “If we need to build X number of equipment, we will place that customer-specific order, we are not restricted,” he says. “Because we are flexible, it makes us a premier provider.”

Kiss, who serves as Director of Midwest, Gulf and Western Regional Sales, shares about the benefits of new vs. refurbished chassis, how Milestone goes where its customers are, and why he has a-ha moments every day.

PROFESSIONAL BACKGROUND

Tell us about your responsibilities as Regional Sales Director at Milestone Chassis.

I oversee the sales activity for the Midwest, Gulf and West regions. A lot of my time is spent in assisting with strategy and transitioning accounts for our clients. I’m responsible for overall growth for both revenue and volume, along with handling some of my own accounts.

What do you enjoy most about your job? 

I enjoy providing new and flexible solutions for each customer and the challenges that brings.  We think “customer first” and try to put ourselves in their position to think about where we can provide benefit and value.

NEW VS. REFURBISHED

There’s a lot of discussion in the industry around new vs. refurbished chassis. Why is this so important?

New equipment is built to the most updated standards and will always have components like anti-lock brakes, PSI and all the newest most modern technology.  Our chassis will always be built this way. When it comes to remanufactured, or refurbished, you are just doing that. You might get a new paint job and a few new things slapped on, like radial tires. But at the end of the day, it’s old.

At Milestone, we sell the total cost of operations of a brand-new chassis and we will share with customers what it costs to operate our equipment versus run of fleet or refurbished chassis. If you take our rates, combined with M&R expense for new chassis, versus rates for run of fleet or refurbished chassis and compare those two different costs, you will see a difference. If you look at the soft costs, time spent on the road, safety, keeping drivers happy, and listing those modern features, compared to the costs it takes to operate an older chassis – drivers being broke down by the side of the road and sheer lack of the modern equipment – once you stack those up, the argument becomes pretty compelling. It makes sense to use brand new premium chassis.

Has Milestone conducted studies on the benefits of using premium chassis vs. refurbished ones?

We have. We have done our own internal studies. There is also published data out there in terms of older pool chassis. You add those numbers together and you compare them, that’s what we drive home to customers. Our cost to operate a brand-new chassis is about .70 cents per day.

Compare that to $4-6 a day for standard run of fleet or refurbished equipment. Our customers know what to expect with Milestone. We are not changing specs on equipment. We will continue to build the most modern fleet. Nothing will be older than 2016.

FLEXIBILITY, CREATIVITY & GROWTH

Goals for the coming year in the Chassis Division?

Right now, we have 29 locations across the country. But we are looking at other locations where we need to have a presence. We’ve got a great network and great infrastructure in place. We can go to where our customers need us. The longer we do this, the more solutions we are able to offer. We’ve got the people in place with the experience; we’ve got the fleet in place to be flexible.

Are you looking at any other specific growth opportunities in other markets?

We see specific growth opportunity in multiple markets. It’s great that market conditions have dictated what people needed. The trucking community is getting more of a voice in the kind of equipment they want and need to use.

Your last a-ha moment?

Whether it’s location based or if it depends on the structure of the deal, we have a lot of those a-ha moments. These come from the discovery process and being able to provide customers with flexible, specific solutions. The company has the ability to architect deals to our specific customer’s needs. We have a-ha moments every day!

Milestone at IANA EXPO 2017

A Look Back on IANA EXPO 2017!

Review

IANA EXPO is always a great time to connect & learn! This year presented new opportunities to share with customers

Milestone at IANA EXPO 2017

around how we continue to push intermodal forward through:

  • The growth of America’s newest chassis fleet, launched in the past year, now expanding nationwide!
  • The benefits of reduced M&R (as well as the bottom line) through the use of new equipment.
  • Flexible leasing options, expert service & more!

Thank you to our customers, vendors & friends that joined us at our reception on Sunday. It was wonderful to get together with you to kick off such an incredible few days at IANA EXPO 2017!

 

Milestone Trailer Leasing - Sarah Johnson

Meet Sarah Johnson

Milestone Trailer Leasing - Sarah JohnsonSarah Johnson, Executive Vice President of Branch Operations at Milestone Trailer Leasing, is driven to come to work to make sure her team is successful. “I love what I do,” she says. “I love to help them win. It’s very rewarding.” Johnson discusses how Milestone Trailer Leasing goes above and beyond when it comes to customer service, what the future holds for the company, and her biggest a-ha moment.

 

 

 

Milestone Background

Tell us about the transition from Personal Attention Leasing (PAL) to Milestone Trailer Leasing?

It’s always been about focusing on the customer service aspect. We have trailers and our competitors have trailers, but what’s the differentiating factor? For us, it’s about how we better partner with our customers. That gets back to this idea of creativity and flexibility. For me it’s fun to do some creative problem solving; I like innovating in an industry that doesn’t often require innovation. That was the whole foundation of PAL, it was about being flexible. It started out as a local, then regional and now we’re at a national level.

A Day in the Life

Tell us about your role as Executive Vice President of Branch Operations at Milestone Trailer Leasing. What does a typical day look like?

My day is focused around supporting branch operations in 25+ locations across the US. This could be through structuring deals for customers, sourcing equipment, and general problem solving. It’s about being in constant communication. Setting up calls every day to review pricing and quantity of trailers; fleshing out details; arming the operations team with data to go out and execute with customers. I spend a lot of time traveling, meeting customers, evaluating the sales approach, helping them to understand their markets, and ultimately evaluating how we can be more successful. That success then drives the metrics, utilization, and overall profitability of the business which is the most important for everyone!

What accomplishments are you most proud of?

I’ve been in the industry a long time in a variety of functions. I’ve loved getting out over the past couple of years and building that customer rapport and getting on the frontline and watching those relationships grow. It’s very rewarding. It’s easy to sit behind a computer or on the phone and ask the team to do something, but getting out and doing it with them gives me firsthand knowledge of the interactions and how to help them through day to day issues.

Biggest a-ha moment?

Our most successful sales people have a strong rapport with their customers. They take their time to get to know their customer and build trust. They become a partner and not just a vendor. It’s not just about closing the sale, but having the rapport so that when the customer has a problem, they will pick up the phone and give us the chance to help them.

Providing a Great Experience

What’s the key to unparalleled customer service?

It’s finding employees who are driven to work hard and who are going to be of service. If the team is dedicated to building a successful business that translates into making sure the business is building strong customer relationships. You also have to be good at negotiating with customers; doing what’s in the best interest of Milestone while retaining the customer relationship. Therein lies the art.

What is key to a strong team?

There are many elements that make a strong team. A few worth noting are respect for one another, communication and having positive attitudes. We also have to collectively celebrate the wins (recognize failures) and respect each other’s roles on the team.

Challenges & Predicting the Future

What’s the biggest challenge facing your industry today?

Driver shortage and accessibility to drivers. In addition to new regulations with ELD (electronic logging device), the third thing is the shift to online retail. It’s changing the shape of transportation and who’s participating. It’s in its infancy, so there are a lot of efficiencies to be made on that front.

What does the future hold for Milestone Trailer Leasing? What things are you excited about?

Continuing to identify gaps in the industry then where and how to fill them. Thinking outside the box when it comes to industry-wide solutions, as well as continuing to develop a strong team. Nothing is stagnate and we have to be ready to evolve. What’s next? It’s exciting to think about.

What keeps you up at night?

I worry about if I was supposed to call someone back and didn’t because the day got away from me or if I need to get an answer to someone so I’m not holding them up. I worry about the overall health of the business and if we’re doing all we can to make it successful. The other thing is making sure I’m delivering the message and everyone is on board and we’re pushing in the same direction. We use the analogy about rowing a boat, and how we need everyone rowing in the same direction. It affects the team if someone is rowing the other way.

Why Milestone?

What is a great story about Milestone Trailer Leasing that you love to share?

We’re pushing on bigger accounts where we haven’t been able to before. We are partnering with bigger companies in a bigger way. It’s been organic growth; everyone pitches in to make it work and it’s rewarding.

What is a great customer story that you love to share about MTL?

There was a target account in Atlanta our sales rep was working on for over a year. For a year, she listened to me say, “Why aren’t we in there?” A year spent calling on them, working through several contacts and really cultivating a relationship with them. Today they have over 100 trailers with us. It speaks to the sales rep’s perseverance and drive to win. I love it!

Port of New York & New Jersey

The Port of NY/NJ to See Chassis Shortages, Milestone Chassis Customers Not Affected

Concerned about chassis shortages on the East Coast? You’re not alone. Many of our customers are setting plans in place to be sure that they’re ready to handle larger shipments following the first to pass under the Bayonne Bridge on June 26th.

When we speak with our customers, we’re glad to be able to tell them things will be business as usual. Milestone Chassis is very much so present on the East Coast and poised to seamlessly assist customers with our modern fleet.

Journal of CommerceAs highlighted in a recent JOC article by Hugh Morley, Doug Hoehn, EVP of Milestone Chassis Co., offered assurance. In addition to our own chassis offering, he confirms that we are indeed interested in joining either the Flexi-Van/DCLI or Metro Pool. Milestone’s goal remains to offer a new, modern alternative to the aging equipment that competitors are offering.

JOC subscribers can read the full article here. Be sure to sign up to reserve your chassis in advance of this development here.

Milestone Chassis – Staying Ahead of “Warning Signals” in Los Angeles & Long Beach

In an article last week, JOC flagged “warning signals” mounting at LA-LB terminals during the current, post-Chinese New Year decrease in imports.

Weston LaBar, Executive Director of the Harbor Trucking Association, offered thoughts on ways to address the issue including:Harbor Trucking Association

  • Discontinuing storage at marine terminals.
  • Offering storage of chassis at designated yards throughout the harbor area.
  • On-site pre-inspections and repairs, where necessary.
*The full article is available to JOC subscribers here.

In short there are many ways to combat congestion and delay – not least of which is Milestone’s commitment to adding more new chassis and intermodal equipment into the pools in these markets. Sign up to receive daily West Coast Inventory Alerts from Milestone Chassis to keep your business moving!

Daily Milestone/HTA Inventory Email Sign Up

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IANA 2016 Vinyls

IANA EXPO 2016: We Came, We Saw, We Launched

This year marked a true “milestone.” For the Intermodal Association of North America, the celebration of their 25th Expo. For our organization, the launch of the Milestone Chassis division and its modernized chassis program. Recently we celebrated both in Houston at the 2016 IANA EXPO.

milestone-chassis-for-web-20160817-v02

It was a pleasure to celebrate both events with so many friends throughout the industry. In addition to meeting with current and prospective customers in our booth over coffee while one of our new chassis was on view , we had the chance to demo ChassisFinder.com (now part of the Milestone portfolio) and highlight the chassis inventory in our expanded equipment fleet.

Our own Jordan Ayers was included on the panel “OTR Capacity Shortages – Will the Predictions Come True?”  Since there have not been any OTR capacity shortages this year the panel moderator, Larry Gross had the panel address other intermodal industry shortages, like chassis. Ayers commented on the surge in chassis bookings due to Hanjin Shipping’s recent bankruptcy. He noted the inability to return Hanjin containers to the terminal operators, railroads, and Hanjin’s depots as a key factor in causing the current chassis shortage. img_7498Many motor carriers are being forced to store mounted Hanjin containers on chassis for extended periods. Milestone has quickly responded by delivering more new chassis to the effected markets, living up to their customer-centric reputation.

This has been, and will continue to be a period of growth for our company, as we innovate and provide chassis solutions to meet customer needs. We look forward to introducing Milestone Chassis to all of our Intermodal partners throughout North America!

 

The Hanjin Effect: Equipment Shortages & How Milestone is Here to Help

In response to the Hanjin Shipping bankruptcy, Milestone continues to offer an expansive fleet to minimize disruption for customers. Please find the latest news regarding this matter below.

An excerpt from Reuters:

By Jim Christie, Lisa Richwine and Tom Hals

The bankruptcy of Korea’s Hanjin Shipping Co Ltd (117930.KS) is causing ripple effects for importers bringing goods from Asian factories to U.S. malls by creating a shortage of trailers to move ocean-shipping containers on U.S. roads.

The world’s seventh-largest container carrier has more than 500,000 containers, and many already are clogging up ports and truck yards, tying up trailers that cannot be used to handle other cargo. That is beginning to worry freight handlers at U.S. West Coast ports and is the first sign of knock-on effects from the failure of Hanjin.

The problem stems from Hanjin’s shortage of cash, which has stranded $14 billion of cargo owned by companies such as HP Inc (HPQ.N), Home Shopping Network (HSNI.O) and Samsung Electronics Co Ltd (005930.KS). Much of the cargo is on more than 100 ships at sea because cargo handlers, tug operators and ports are refusing to work with Hanjin unless they get paid up front.

A lawyer for the shipper did not immediately respond to a request for comment.

Terminal operators in the California ports of Long Beach and Oakland are not taking back empty containers. Many in the industry doubt Hanjin will pay storage costs, and a growing number of empty containers and the trailers they sit on are stranded.

“If it’s not fixed in the next couple of weeks, I think you’ll see a huge ripple effect across the industry,” said Weston LaBar, executive director for the Harbor Trucking Association in Long Beach, California.

LaBar said there are thousands of Hanjin containers on trailers out of circulation, and the uncertainty surrounding Hanjin appears to be pushing truckers to lock in trailers from his organization’s pool.

“We doubled in bookings this morning,” LaBar said. “We have availability, but we’re getting to the point where we may be leased out for our chassis.”

Shipping executives said there is ample supply of shipping containers, but trailers are limited. The West Coast ports previously have experienced brief shortages even when the stream of trade is functioning normally.

The Hanjin collapse has exacerbated the problem.

Read the full article here or request a quote here.