PPD 531 Final Draft

Rebecca Chung
Qianyao Duan
Karl Fielding
Tanaya Malhotra
Adam Montgomery
Rui Tu
Jonathan Yang
Translogic Solutions
Chassis Management at the San Pedro Bay Port Complex:
Assessing the Viability of the “Pool of Pools” Approach
University of Southern California
Sol Price School of Public Policy
PPD 531L: Spring 2015 Transportation Studio
FINAL REPORT
April 27, 2015

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Acknowledgements
This report could not have been developed without the insight and knowledge of
many transportation professionals, guest speakers, the Port of Los Angeles and the
Port of Long Beach. We would especially like to thank Professor Eric Shen for support,
instruction, and guidance in developing this report. In addition, we would like to thank
the following individuals:
Alex Cherin
Harbor Trucking Association
Kathy Culver
Senior Supply Chain Manager
Kroger
Jolene Hayes
Senior Freight Transportation Consultant
Cambridge Systematics
Annie Nam
Goods Movement Manager
Southen California Association of Governments
Malcolm Daugherty
Director
Caltrans
Will Kempton
Executive Director
California Transportation Commission
Bill Mongelluzzo
Senior Editor
Journal of Commerce
Dick Steinke
Ports Practice Leader
Moffatt & Nichol
Translogic Solutions April 27, 2015
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S. Executive Summary 1
I. Introduction 3
II. History of Chassis Management 9
III. Existing of Chassis Management 13
IV. Current Challenges 27
V. Assessment and Recommendation 31
VI. Lessons Learned: Successful Chassis Sharing Examples 55
VII. Alternatives 59
VIII. Stakeholder Implications 61
IX. Conclusion 65
X. Contributing Authors 69
Table of Contents
a. Chassis Asset Ownership and Provision 32
b. Chassis Storage 35
c. Chassis Availability 37
d. Chassis Inspection, Maintenance & Repair 45
e. Chassis Adminsitration 48
f. Summary of Recommendations 50
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S. Executive Summary
The opportunity inherent in any new venture is that flexibility exists to readily
evolve and adapt to meet the needs of customers or stakeholders. Yet what some
may describe as an opportunity, others may describe as a challenge. New ventures
often require making difficult decisions, without the benefit of hindsight, that will
set the venture on a course that is not so easily adaptable. The recently formed
Pool of Pools at the San Pedro Bay ports complex currently sits at that juncture.
The Pool of Pools formed to better manage chassis supply with the option to re-
main as multiple pools operating within a larger pool, allowing for existing chassis
hosting, usage, and contribution agreements to remain in place, or to evolve
into a single regional ‘super pool’ that might require all existing agreements to be
re-negotiated.
The purpose of this report is to identify which course the Pool of Pools should
follow. Through our research and analysis we find that the Pool of Pools should
continue with its current operating model of multiple pools with an inter-pool
usage agreement. This model provides the benefit of no delay in implementation,
increased competition amongst the pools, the continuance of established chassis
agreements, and not having to introduce a new third-party pool operator to the
chassis agreement negotiations.
Most importantly, the current operating model allows for the Pool of Pools to
maintain its flexibility. With so many questions remaining on what is the most
effective and efficient model to optimize the supply of chassis, future conditions
may require a different market response that might ultimately become a single
regional pool. However, as this report recommends, the existing Pool of Pools
approach should remain while evolving over the next few years into an even more
efficient and effective chassis management system.
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I. Introduction
Image courtesy of Karl Fielding
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The Ports of Los Angeles (POLA) and Long
Beach (POLB) are not only integral compo-
nents of Southern California’s business land-
scape, together they make up the nation’s largest
gateway for international trade, accounting for
40 percent of the nation’s import containers and
close to $500 billion in cargo each year (Facts at
a Glance, 2015). However, the San Pedro Bay
ports have gradually lost market share to other
U.S. ports and, more significantly, to Canadian
and Mexican ports. Increased competition and
ongoing operational inefficiencies are placing the
Southern California ports at risk of losing addi-
tional market share, which would have a serious
effect on the regional and national economy.
There are many factors that impact the perfor-
mance of a port, including the infrastructure at
the port and its surrounding intermodal facili-
ties, operational processes, as well as labor and
environmental policies. The POLA and POLB
made global headlines in 2014 due to worldwide
shipping delays resulting from a wide variety of
inefficiencies. Not only were organizations such
as the International Longshore & Warehouse
Union (ILWU) and the Pacific Maritime Asso-
ciation (PMA) involved in labor negotiations
and work slowdowns, but the ports were further
plagued by delays linked to large vessels clogging
ports, a lack of available truck drivers, and issues
surrounding the availability of chassis (Vineyard,
2015).
With the labor conflict seemingly resolved for
the immediate future and ongoing investments
in place to improve port infrastructure, attention
has now turned to resolving the issue of chassis
management. Chassis service at the ports became
problematic following the shipping lines’ deci-
sion in 2009 and 2010 to liquidate chassis fleets
as a response to the low cargo volumes precipi-
tated by the global recession (Rodrigue, 2012).
Figure 1.1 highlights the change in chassis own-
ership from 2009 to 2013. Equipment leasing
providers purchased the majority of the chassis
fleet and an ad hoc service model involving mul-
tiple pools and specific service agreements slowly
evolved. As cargo volumes boomed in the years
following the recession, marine terminal oper-
ators, truck drivers, labor, and shippers voiced
concern over the increasing inefficiencies of
the service model offered by the various chassis
pools. The issue reached a crisis point in 2014
when a lack of available chassis was identified as
a prominent contributor to the congestion at the
ports (Mongelluzzo, 2014).
Some media outlets reported of a chassis short-
age at the ports, while others claimed the ports
suffered from a chassis dislocation problem. In
response, the POLA and POLB, along with a
key group of stakeholders, formed a Chassis
Operations Group in 2012 to develop a more
efficient chassis supply model. Partly as a result
of the working group, plans were formulated
to develop a neutral chassis pool for the ports.
Labeled the “Pool of Pools”, the planned neutral
chassis pool consists of approximately 81,500
third-party owned chassis that are interoperable,
which allows truck drivers to deliver containers
and chassis to different terminals even if the
owners are not the same (Mongelluzzo, 2015).
Launched in March 2015, the ‘Pool of Pools’ is
still in its early stages and questions abound on
the appropriate size, management, location, and
maintenance of the pool when port operations
rebound from the dismal slowdown. Will the
pool be able to accommodate cargo volumes at
their peak? Would an off-site pool location better
suit the storage needs of the terminals? Are there
other chassis supply models that would provide
more efficiencies and be less costly? While the
neutral pool was never expected to be a panacea
for the congestion issues surrounding the port,
it is expected to provide improved chassis service
Vision
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to the previous model and solve the concerns of
shortage and imbalance that plagued the ports in
2014.
Source: Consolidated Chassis Management (CCM) 2014
Figure 1.1 United States Chassis Ownership Change
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In order to accomplish the required analysis and
recommendations, this report has a limited and
focused structure. Due to the recent “Pool of
Pools” implementation, it is not prudent to re-
visit the justification for creating a shared chassis
resource. Instead, the scope of this report focuses
on the existing chassis situation including recent
shared resource developments and whether or
not this collective approach will meet the needs
of the dynamic and growing port complex in the
San Pedro Bay. In order to properly assess this
particular challenge, a number of different topics
must be explored. These include, but are not
limited to, the history of the POLA and POLB
and their chassis operations, current chassis
practices at both ports, challenges facing the
industry related to current practice and pro-
jected future demand, recommended solutions
based on quantitative and qualitative analysis,
and viable next steps required for implemen-
tation. It should be noted that this report and
its recommendations are specific to the chassis
management issues facing the POLA and POLB
and will not necessarily be directly applicable to
other port facilities. However, to the extent that
other ports are facing similar chassis challenges,
this report could offer a helpful starting point for
how other port managers might wish to consider
addressing their own circumstances.
Scope
This report responds to the questions of viability
surrounding the “Pool of Pools” and develops
quantitative answers to the aforementioned
questions of appropriate pool size, management,
location, and maintenance. It also analyzes the
question of whether previous problems of chassis
supply were a result of a shortage, dislocation,
or both. With cargo volumes expecting to grow
and storage space becoming an ever-increas-
ing constraint at the ports, this report closely
examines whether the supply of 100,000 chassis
in the pool will always guarantee availability,
and if not, how and where the pool should be
expanded. Additionally, other alternatives to the
neutral pool model are explored to determine if
a more effective and efficient supply model could
be developed. Lastly, recommendations and an
implementation schedule accompany the results
derived from the report’s analysis.
The recommendations offered by this report are
not based solely on quantitative analysis. As with
any issue involving various stakeholders with
competitive agendas and intertwined histories,
data and numbers often cannot elucidate a clear-
cut solution. Data is superfluous if the context,
history, and stakeholder’s input are not clearly
understood. To address this concern, this report
also includes a qualitative analysis of the current
chassis management in conjunction with the
quantitative analysis. The offered recommenda-
tions are not based exclusively on numbers, but
also take into account the implications for each
stakeholder.
Report Objectives
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Reference
1. Facts at a Glance. (n.d.). Retrieved April 9, 2015, from http://www.polb.com/about/facts.asp
2. Mongelluzzo, B. (2014, September 12). Chassis shortage could lead to gridlock at LA-LB, termi-
nals warn. Retrieved April 9, 2015, from http://www.joc.com/port-news/us-ports/port-los-angeles/
chassis-shortage-could-lead-gridlock-la-lb-terminals-warn_20140912.html
3. Mongelluzzo, B. (2015, February 28). LA-Long Beach, chassis lessors form neutral chassis pool.
Retrieved April 9, 2015, from http://www.joc.com/port-news/us-ports/chassis-leasing-companies-
agree-formation-neutral-chassis-pool-los-angeles-long-beach_20150228.html
4. Rodrigue, J., Zumerchick, J., Lanigan, Sr, J., & Barenberg, M. (2012). Intermodal Chassis Utiliza-
tion: The Search for Sustainable Solutions. Retrieved April 9, 2015, from http://people.hofstra.edu/
jean-paul_rodrigue/downloads/chassisutilizationpaperjprev3.pdf
5. The Port of Los Angeles. (2015, March 20). About the Port. Retrieved April 9, 2015, from http://
www.portoflosangeles.org/about/facts.asp
6. Vineyard, J. (2014, September 25). 5 Factors Causing Congestion at the Ports of L.A. and Long
Beach. Retrieved April 9, 2015, from http://www.universalcargo.com/blog/bid/103989/5-Factors-
Causing-Congestion-at-the-Ports-of-L-A-and-Long-Beach
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II. History of Chassis Management
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Operation of a
Conventional Chassis
Management Model
During the early days of containerization in the
1960s, ocean carriers or shipping lines operating
in the U.S. had full ownership of their chassis.
Ocean carriers had their own chassis pools and
provided free use of these chassis to truckers for
goods transferring and distribution in order to
secure market share in the interior of the Unit-
ed States. This model was successful in the San
Pedro Bay because the POLA and POLB had
available land that allowed terminals to store
chassis on site and to place containers “on-
wheels” instead of stacking them.
The conventional chassis management model
was criticised for being unsustainable for the
following reasons: 1) inefficient repositioning
between inland distribution centers, warehouses
and ports needed to return chassis to their own-
Decline of the
Conventional Chassis
Management Model
ers; 2) raising demand for terminal land due to
increased capital investment restricted available
space for chassis storage; 3) truckers bringing
foreign chassis to the ports causes a redundant
flipping process which increases delay. The first
change from the conventional free chassis service
model occurred in 2009 as Maersk introduced
the Direct ChassisLink Inc. (DCLI) program in
the Northeast and Ohio Valley, charging truckers
for chassis usage. The DCLI program was ex-
tended to the San Pedro Bay ports after October
2010 when Maersk announced that it will cease
to provide chassis for containerized cargo. Soon
after Maersk took the lead in changing the con-
ventional management model, other ocean car-
riers and shipping lines followed. In April 2010,
Atlantic Container Line decided to phase out
its chassis service and stopped providing chassis
service for trucking companies at any of its port.
In October 2010, Hyundai announced that it
would stop providing chassis on the West Coast
in 2011. In January 2011, CMA CGM had set
a timeline for terminating their entire chassis ser-
vice by March 2011. In February 2011, Hapag
Lloyd announced that it was getting out of the
chassis business in April 2011.
Since ocean carriers are getting out of the chassis
business, third party - chassis leading company,
which provides and manages independent chassis
pool separately and charges for usage and man-
agement service appears in market. In August,
2010, the first neural chassis pool provider,
Direct ChassisLink started extending service to
California including San Pedro Bay ports and
this landmark agreement accelerates the boom-
ing chassis leasing company. In January, 2011
TRAC Intermodal extended its web-based and
service covering rentals, leasing and other related
Emergence of the Third
Party and the Grey
Chassis Pool
Chassis management has gone through
four stages:
1) Operation of conventional chas
sis management model
2) The decline of the conventional
chassis management model
3) The emergence of a third party
and neutral chassis pools
4) The beginning of the cooperat
ed chassis pools.
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Between 2011 to April 2013, different types
chassis pools coexisted at ports lacking of uni-
form and collaborative management agreement.
The phasing out of ocean carriers and merging
in of leasing company in chassis supply failed to
balance the demand during this period. Attempt
in coordinating between terminal operators,
ports, ocean carriers and leading companies has
been made under urgent request from beneficial
cargo owner. There are many incentives for ports
to establish cooperated chassis pool. It allows
carriers to divest themselves of a portion of their
equipment fleet freeing up both capital and land.
Also, the adoption of chassis pools rationalizes
terminal operations, improves safety and reduces
congestion by minimizing in-terminal moves.
In April, 2013, Ports of Los Angeles and Ports of
Long Beach issued RFP for chassis supply model
and In 2014, Direct ChassisLink, TRAC Inter-
modal, Flexi-Van as well as SSA Marine which
control 95 % of the chassis at San Pedro Bay
ports reached an agreement to develop a neu-
tral or gray chassi pool.The vast majority of all
chassis in operation in the harbor will fall under
this program. DCLI has approximately 30,000
chassis, Flexi-Van has 19,000, TRAC has 37,000
and SSA Marine 9,000. Pool operators grant
the right of overseeing daily logistics and repo-
sitioning of the whole chassis pool by bring in a
team consist of each company’s representative. A
separate third-party service provider will manage
billing and other proprietary information.
The Beginning of the
Cooperated Chassis Pools
services to the intermodal drayage community
on a short to medium term basis. Flexi-Van also
entered the market and adds chassis leading
service at the same time. According to a national
chassis ownership survey by Circa, leasing com-
panies’ market bumped increased from 65% in
2011 to 87% 2014.
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References
1. Patrick Burnson (2015), Ports of LA/LB launch container chassis scheme, Retrieved from http://
www.logisticsmgmt.com/article/ports_of_la_long_beach_launch_container_chassis_scheme
2. Bill Mongelluzzo (Oct, 2014), Four chassis operators agree to form pool at LA/LB, Retrieved from
http://www.joc.com/port-news/us-ports/port-los-angeles/four-chassis-operators-agree-form-pool-la-
long-beach_20141031.html
3. Marc-Andre Roy, TRB annual conference (Jan, 2015), Evolving US chassis supply market, Re-
trieved from http://www.cpcstrans.com/files/4914/2141/9799/Roy_Marc-Andre__-_Evolving_US_
Chassis_Market.pdf
4. Hanh Dam Le-Griffin and Tomas O’Brien, (May 2013), IMPACT OF STREAM-LINED
CHASSIS MOVEMENTS AND EXTENDED HOURS OF OPERATION ON TERMINAL
CAPACITY AND SOURCE-SPECIFIC EMISSIONS REDUCTIONS, Retrieved from http://cite-
seerx.ist.psu.edu/viewdoc/download?doi=10.1.1.410.3542&rep=rep1&type=pdf
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III. Existing Chassis Management
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The Conventional Model
Perhaps the most common model found in the U.S., chassis in the conventional model are
owned or leased by ocean carriers. All management and operational activities such as “chas-
sis procurement, demand / supply, maintenance, logistics and administration” (p.25, TRB,
2012) are carried forward by the ocean carrier as well. A master transportation facilities
agreement would be made between the marine terminal and the ocean carrier with regards
to storing, inspecting, maintaining and repairing the chassis.
Although ocean carriers have the option of owning their own chassis supply, recent study
indicates that ocean carriers prefer leasing chassis instead. However, the transition to
leasing chassis can be challenging as it requires ocean carriers to dispose of their current
assets (Roy, 2015). Furthermore, the increasing costs associated with chassis ownership and
management and the growing concerns from government on safety and roadability has led
ocean carriers to re-evaluate their position in the realm of chassis management (Rodrigue,
Zumerchik & Ogard, 2012).
In Southern California, Evergreen Shipping Agency (America) Corporation (Evergreen
Lines) is the only ocean carrier that currently operates under this model with approximately
8,000 chassis. Motor carrier that use chassis owned by Evergreen Lines are expected to pay
use charges on a per-diem basis if they exceed the standard free time, as shown in Table 3.1.
These detention charges and free time are for motor carriers that have an origin (or destina-
tion) at POLA or POLB.
Source: High Mountain Transport LLC, 2014
Currently, the San Pedro Bay ports are served by four different chassis supply models: the
Conventional Model, Cooperative Pool, Neutral Pool, and Terminal Pool. Each of the
models operate differently with respect to its ownership, operations and provision of chas-
sis (Transportation Research Board [TRB] 2012). The following section would provide a
more in-depth description of the four models.
Table 3.1: Equipment Detention & Free Time for Chassis within Los Angeles or Long Beach,
California
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Unlike the conventional model, the cooperative pool is a shared fleet among a group of
contributors. Each participating member is required to contribute their own chassis to
the pool based on their cargo volumes (Le-Griffin & O’Brien, 2013). Non-ocean carriers
(e.g. leasing companies) can be part of the chassis supply model and this arrangement is
known as the Unitary Pool Concept (UPC). The purpose of the cooperative pool model is
to enable synergy among ocean carriers and more effectively utilize chassis (Wilson, 2011).
In terms of management and operation, the contributors can make a joint decision to hire
a management company to carry forward activities such as chassis procurement, mainte-
nance, and logistics (TRB, 2012). A detailed facilities agreement is also required to articu-
late the rules associated with storage, inspection, and maintenance (TRB, 2012).
There are three cooperative pool models currently operating in Southern California: the
Grand Alliance Chassis Pool (GACP), Los Angeles Basin Pool (LABP), and New World Al-
liance (NWA). GACP owns a total of 12,000 chassis with Hapag Lloyd, NYK and OOCL
as the primary shipping line members. The chassis found in this pool are located at the Yu-
sen Terminal (Berths 212 -225) at the POLA, Long Beach Container Terminal (LBCT, Pier
F at POLB) and International Transportation Service (ITS, Pier G / J at POLB). LABP has
the largest chassis inventory of 35,000 chassis with numerous participants (see Table 3.2).
The chassis in the LABP are located at West Basin Container Terminal (Berths 100 – 102,
121 – 126 at the POLA), ITS, Total Terminals International (TTI, Pier T at POLB), and
Pacific Container Terminal (PCT or Pier J at POLB). Lastly, NWA has the second largest
chassis pool with 24,000 chassis with APL, HMM, and MOL as participants. The chassis
are distributed among terminals such as Pier 300 / Eagle Marine (Berths 302 – 305, at
POLA), California United Terminals (Pier 400 at POLA) and TRAPAC (Berths 136 –
147, at POLA). A summary of the different cooperative pools are provided in Table 3.2.
Each cooperative pool formulates its own standard free time and detention charges per day
to the motor carriers. Based on the Uniform Intermodal Interchange & Facilities Access
Agreement (UIIA), ocean carriers usually provide 5-10 working days of free time to the
motor carriers (High Mountain Transport LLC 2014). This means that motor carriers can
utilize the cooperative pool chassis for free within that duration. However, once past those
days, motor carriers are charged per calendar day between $6.00 and $52 per day if not
returned to the agreed-upon location (High Mountain Transport LLC, 2014).
Regional Cooperative (Co-op) Model
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Table 3.2: Cooperative Pool Providers at San Pedro Bay Ports
Source: Translogic Solutions, 2015
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The Neutral Model
Also known as “grey fleet” chassis, the neutral pool supply model is owned, managed and
operated by a third party. Ocean carriers and motor carriers pays on a per diem rental rate
that encompasses the physical asset (chassis), maintenance, repair and insurance (TRB,
2012). However, it should be noted that repositioning of the chassis is not included in the
rental rate. The third party and the terminal undergoes a “hosting contract” where they
would articulate the rules associated with chassis storage, inspection and maintenance
(TRB, 2012).
The main neutral pool that operates in Southern California is Direct Chassislink, Inc.
(DCLI) with a total of approximately 11,000 chassis. The common participants of DCLI
include Maersk, Horizon and Safmarine. DCLI charges a rental rate which is invoiced
directly to the users (motor carrier or ocean carrier). A summary of the current market
rental rates for DCLI nationwide are illustrated in Table 3.3. As of January 1, 2015, it cost
$20.25 per day to rent a chassis from DCLI in the Pacific Southwest region.
Source: DCLI 2014
Table 3.3: Current Neutral Pool Market Rates
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The Terminal Pool
In the terminal pool supply model, marine terminal operators provide their own chassis
pool. The purpose is to offer flexibility and provide convenience to their users (e.g. ocean
and motor carriers). Terminal pools operate either like a neutral pool where the terminal
owns and operates the chassis, or like a cooperative model where the marine terminal rep-
resents the ocean carriers in managing the pool. What makes this supply model unique is
that a facilities agreement is not necessary as the terminal operator has oversight of both the
terminal and the pool (TRB, 2012).
The West Coast Chassis Pool (WCCP) is the terminal pool for the San Pedro Bay ports
complex with a total of 9,000 chassis in their inventory. As of December 1, 2012, the chas-
sis rental rates were $14.00 per day for motor carriers. The rented chassis are to be returned
to the “terminal of origin” which is either SSA Terminal – Pier A at POLB or PCT (Pier J)
of POLB (“West Coast Chassis Pool, Chassis Agreement”, 2012).
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Summary of Existing Chassis Management
The following Table 3.4 and Figure 3.5 summarizes the current San Pedro Bay chassis supply
models. Overall, there are approximately 100,000 chassis being utilized by the Los Angeles
region. The cooperative chassis supply model (GACP, LABP and NWA) makes up 72% of
all the chassis inventory, leaving only 28% of the chassis inventory to other supply models
(DCLI, WCCP and Evergreen).
Table 3.4: Current San Pedro Bay Chassis Models
Figure 3.5: Chassis Inventory by Providers
Source: Port of Long Beach, 2014
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Existing Chassis Management Analysis
This section evaluates the existing chassis management system at the San Pedro Bay ports complex
and identifies whether there is a shortage of chassis supply among each of the port terminals. The
findings from this section will not only contribute to our understanding of chassis movements at
POLA and POLB container terminals but it will also enable us to make effective and feasible recom-
mendations in later sections.
The current system of chassis operations can be understood through the basic economic principles of
supply and demand. The supply is dependent on what is currently being contributed by the different
chassis supply models. As mentioned previously, the San Pedro Bay ports complex has approximate-
ly 100,000 current chassis supply among the various models. The demand for chassis, on the other
hand, is dictated by the consumer market which is analogous to the number of containers the POLA
and POLB export and import on a daily basis. The difference between the supply and demand will
indicate the container terminal performance with regards to effective chassis utilization.
Estimating Existing Supply of Chassis
Methodology
In a simple chassis movement, one would assume a truck would enter the terminal, pick up the
chassis, receive the container and exit the terminal. Figure 3.6 illustrates the typical truck movement
at the ports when there is a common chassis. In reality, however, the sequence of truck moves can be
extremely complicated and would vary depending on the type of chassis supply pool, terminal opera-
tions and job order given by the motor carrier (Le-Giffen & O’Brien, 2013).
Source: Le-Griffin & O’Brien, 2013
Figure 3.6: Truck Movement with a Common Chassis
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Due to the complexity of chassis supply movement, the following assumptions were made to simpli-
fy the analytical procedures:
-The total number of chassis supply found in each terminal are consistent every month. By keeping
this value constant, we will be able to identify whether or not the San Pedro Bay Ports have a short-
age in chassis.
-It is assumed that chassis are only situated at Terminals that facilitate containerized cargo move-
ments. Hence, only thirteen major (13) Terminals at San Pedro Bay Ports were taken into consider-
ation. This however, does not preclude the fact that chassis are being stored in terminals that are not
taken into consideration. Much rather, the purpose of this is to reduce the complexity of the analy-
sis.
-The total number of chassis supply for each terminal was distributed based on the total number of
inbound and outbound truck lanes the terminal has. Truck lanes were utilized because of its strong
relationship with the number of the chassis each terminal requires. The greater number of truck lanes
indicates greater trucker volume and ultimately, a greater chassis volume. For example, Pier T has a
total of 45 truck lanes and all the terminals combined has a total of 337 lanes (inbound and out-
bound). Pier T would be proportioned to 13% (45 out of 337) of the 100,000 total chassis supply,
which is 13,354.
Results
Based on the assumptions, Table 3.7 summarizes the distribution of 100,000 chassis among the 13
major terminals found at the San Pedro Bay ports complex.
Table 3.7: Number of Chassis for Each Terminal at San Pedro Bay Ports Complex
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Table 3.8: Assumptions for Calculating Chassis Management
Estimating Existing Demand of Chassis
Methodology
The demand of the chassis per terminal is derived from the number of twenty-foot equivalent units
(TEUs) that are handled by the POLA and POLB. As indicated in the previous section, the monthly
TEU experienced by the San Pedro Bay ports varies on a monthly basis. The purpose of the analyses
is to identify the peak months in which both ports encounter a large surplus or shortage of daily
chassis supply.
The following Table 3.8 summarizes the assumptions and methodology that have been used to deter-
mine the existing demand of chassis.
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Results
With these assumptions, the amount of chassis (surplus and shortage) for each month was calculated
for the POLA and POLB. An example of the chassis analysis for the month of December 2014 is
shown in Table 3.9. A negative net chassis movement at the terminal indicates a shortage of chassis
supply while a positive value indicates a surplus. In the month of September 2014, the San Pedro
Bay ports experienced a shortage of 5,486 chassis. Pier T at POLB experienced the most shortage of
1,815 chassis and APL Terminal at POLA experienced a surplus of 362 chassis. Although a shortage
of 5,486 chassis does not seem to be significant compared to the 100,000 supply of chassis (5%),
it does have an overall negative impact on terminal performance. Inefficient distribution of chassis
supply can affect the system operation times and further exacerbate the air quality, which will be
discussed more in later sections (Le-Griffin & O’Brien, 2013).
Table 3.9: December 2014 Daily Chassis Supply for San Pedro Bay Ports
The monthly surplus or shortage of chassis for POLA and POLB in 2014 are illustrated in Figure
3.10 and 3.11, respectively. For the POLA, it is evidential that the port has inadequate supply of
chassis for eleven months out of the twelve. The range of chassis shortage varies between 1,299 in the
month of December 2014 to a high of 7,326 chassis shortage in September 2014. The only excep-
tion is February 2014 in which a surplus of 3,802 chassis is generated.
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Figure 3.10: Port of Los Angeles Chassis Management for
Year 2014
Figure 3.11: Port of Long Beach Chassis Manage-
ment for Year 2014
Figure 3.12: Overall Shortage of Chassis at San Pedro Bay
Ports in Year 2014
Similarly, the POLB also experiences significant amounts of chassis shortage. With the exception of
March, all the months in 2014 experience a chassis shortage that ranges from a low of 1,416 in Feb-
ruary and a high of 7,651 chassis shortage in September. The overall chassis shortage for both ports is
illustrated in Figure 3.12.
April 27, 2015
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25
Despite the 2014 Port Issues, historic trend from the past five years indicate that the shortage of
chassis supply is expected to grow in the coming years. Although there are instances in which the
port would experience spike of chassis surplus, the average net chassis movement is still well within
the negative range. To further exacerbate that already lack of chassis supply, the increase in container
volume in the future would pose a significant problem. Figure 3.15 shows the potential increase in
container volumes over the next three years.
With the recent 2014 Port ILWU dispute, one would question the validity of the quantitative anal-
ysis. The data may not be an accurate representation of the chassis operations. Hence, similar chassis
management analysis was conducted for 2010 to 2013 to see if there has been historically a trend of
chassis shortages. Figure 3.13 and 3.14 illustrate the daily chassis usage (quartiles) at the Port of Los
Angeles and Long Beach between the years of 2010 to 2014, respectively.
Trending Shortage of Chassis Supply
Figure 3.13: Trending Shortage of Chassis
Supply at POLA
Figure 3.14: Trending Shortage of Chassis
Supply at POLB
Figure 3.15: San Pedro Bay Ports Forecasted 3 Year Demand
Source: Translogic Solutions, 2015 Source: Translogic Solutions, 2015
April 27, 2015
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26
Reference
Le-Griffin, H. & O’Brien, T. (2013). Impact of Stream-Lined Chassis Movements and Extended
Hours of Operation on Terminal Capacity and Source-Specific Emission Reductions. Metrans Trans-
portation Center USC and CSULB. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?-
doi=10.1.1.410.3542&rep=rep1&type=pdf.
Myer Mohaddes Associates. (2001, June). Ports of Long Beach / Los Angeles Transportation Study.
The Port of Long Beach and the Port of Los Angeles. Retrieved from http://www.polb.com/civica/
filebank/blobdload.asp?BlobID=7969.
Port of Long Beach. (2014). TEUs Archive Since 1995. Retrieved from http://www.polb.com/eco-
nomics/stats/teus_archive.asp.
Port of Los Angeles. (2015, February). Historical TEU Statistics (by calendar year; includes monthly
data). Retrieved from http://www.portoflosangeles.org/maritime/stats.asp.

West, R. & Thammiraju, R. (2010, November 1). Ports of Los Angeles and Long Beach Year 2010
Marine Terminal Gate Surveys. [Draft Memorandum]. Oakland, CA: Cambridge Systematics.
Roy, M. (2015, January 14). (Still) Evolving US Chassis Supply Market, Port Drayage and Chas-
sis Management [Presentation Slides]. TRB Annual Conference: Washington, DC. Retrieved from
http://www.cpcstrans.com/files/4914/2141/9799/Roy_Marc-Andre__-_Evolving_US_Chassis_Mar-
ket.pdf.
Rodrigue, J., Zumerchik, J. & Ogard, E. (2012). The U.S. Transition to a Motor Carrier Supplied
Marine Chassis: Operational Impacts On and Off Terminal. Retrieved from http://people.hofstra.
edu/jean-paul_rodrigue/downloads/TRB%20Chassis%20Paper%2080112%20FINAL.pdf
High Mountain Transport LLC. (2014, January 10). UIIA Equipment Providers Free Days and Per
Diem / Use Charges. Retrieved from http://highmountaintransport.com/Per%20Diem%20Docu-
ment.pdf.
Wilson, M. (2011). AAPA Operations, Safety, and Information Technolog Seminar Terminal Ef-
ficiency Best Practices – Chassis Pools. Hamburg Sud North America, Inc. Retrieved from http://
www.aapa-ports.org/files/SeminarPresentations/2011Seminars/11OpsSafetyIT/Wilson_Mike.pdf.
West Coast Chassis Pool. (2012). West Coast Chassis Pool, Chassis Agreement. Retrieved from
http://www.emodal.com/common/motorcarrier_wccpchassisagreement.pdf.
April 27, 2015
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27
IV. Current Challenges
April 27, 2015
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28
In the United States, chassis have historically
been owned and supplied by shipping lines at lit-
tle or no cost. With shipping lines moving out of
the chassis business in recent years, the question
of who will now provide the chassis has emerged.
As discussed in previous sections, the goods
movement industry has been adapting from
ocean carriers providing customers with chassis
equipment and bundled services at a low price
to the transfer of chassis assets and management
to leasing companies. The burden of responsibil-
ity for the chassis supply has now shifted on to
truckers and shippers. One of the bigger chal-
lenges faced by truckers in chassis management is
an inevitable waste of time and money delivering
a container at one terminal and a chassis some-
where else. For this reason, terminals frequently
run short of chassis during busy periods. Out-
of-service chassis and billing problems have also
become recurring issues.
April 27, 2015
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29
In addition to terminals, distribution centers also
face a chassis utilization problem. While contain-
er storage at terminals is a mixture of wheeled
and stacked, reach stackers (or cranes) are not
available at distributions centers. Thus, the
choice for a truck driver is to wait for unloading
and return with the empty chassis, or leave the
chassis for unloading at a later time via the more
prevalent drop and leave, pick and go option
(Rodrigue, J. Et al., n.d.). This results in many
missing chassis in the system, and months pass
before they can be used again. Another utiliza-
tion issue that surfaces is no daily fee assessment,
since the need to get the empty chassis back to
the terminal takes a backseat over other supply
chain priorities.
Terminals witness an increase in marginal cost
for chassis storage as volume increases. Empty
chassis are parked, stacked or racked, which
require a chassis stacker and operator (Rodrigue,
J. Et al., n.d.). Although parked chassis terminals
require neither, they need greater capital invest-
ment in terms of land and labor used for track-
ing and managing the fleet, including searchers
to locate chassis and containers parked incorrect-
ly by drayage drivers.
Additionally, a tremendous growth in ship sizes
has coincided with disengagement of ocean
carriers from chassis management. This, coupled
with the increase in carrier alliances, has created
strain on the chassis management system. Thus
the biggest challenge facing the chassis industry
is how to evolve into and maintain a new, more
effective model of chassis supply.
Current ocean carriers, many of who have no
plans to further invest in chassis, believe the
chassis supply pool is moving towards a transi-
tion phase as carriers continue to divest in chassis
operations. This transition is anticipated to create
three major challenges: asset disposition, com-
mercial considerations and motor carrier invoic-
ing accuracy (Roy, M., 2015).
One of the other stakeholders involved in chas-
sis management is the beneficial cargo owner
(BCO). From their perspective, the primary
chassis challenge is cost and service. The BCO’s
concern originates from the fact that the poten-
tial for higher costs could substantially alter their
management methods. Additionally, as per data
from the Transport Research Board (TRB), the
BCOs rate themselves as least able to operate a
chassis pool and prefer the status quo (Roy, M.,
2015). The motor carriers, collectively, also pre-
fer the status quo and believe the transition away
from ocean carriers providing chassis would not
only create billing inefficiencies but also would
not contribute to increasing productivity. Ad-
ditionally, the initial cost of chassis and parking
and storage requirements would be big hurdles
to chassis pool ownership for both BCOs and
motor carriers.
Public agencies and planning organizations, on
the other hand, have more varied outlooks and
interests. Port authorities favor the chassis man-
agement transition while state planning agen-
cies and metropolitan planning organizations
(MPOs) perceive it from a broader perspective
and have concerns ranging from land use plan-
ning for storage and maintenance to increased
truck traffic and congestion.
Largely, the short and medium term chassis chal-
lenges point towards pooling which would have
policy and planning implications in terms of
land use, truck congestion, off-terminal storage
and many others. In the long term, the various
challenges associated with chassis supply can be
addressed through coordination with different
stakeholders while accounting for their various
interests, influences and regional discrepancies.
April 27, 2015
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30
Reference
1. Rodrigue, J. et al. (n.d.). Intermodal Chassis Utilization: The Search for Sustainable Solutions.
Retreived From http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaper-
jprev3.pdf
2. Rodrigue, J. et al. (n.d.). Intermodal Chassis Utilization: The Search for Sustainable Solutions.
Retreived From http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaper-
jprev3.pdf
3. Roy, M. (2015). (Still) Evolving US Chassis Supply Market [ Powerpoint slides]. Retreived From
ket.pdf
4. Roy, M. (2015). (Still) Evolving US Chassis Supply Market [ Powerpoint slides]. Retreived From
ket.pdf
April 27, 2015
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31
V. Assessment & Recommendation
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32
37,000
30,000
19,000
Flexi-Van
Direct Chassis Link
TRAC-Intermodal
Chassis Asset Management
and Provision
With an end to fifty years of chassis ownership
by shipping lines and a resulting shift in asset
financing from Chassis acquirement to ocean
going assets like ships and containers, the POLA
and POLB currently have chassis pools support-
ed by port authorities and leasing companies.
Due to the previous lack of coordinated chassis
sharing, shortages and dislocations have been
surfacing since spring of 2014, sparking a port
congestion problem that has been getting pro-
gressively worse over the course of time. Howev-
er, in an effort to counter the chassis congestion
and mismanagement, three major chassis pools
serving the San Pedro Bay port complex entered
into an agreement effective March 1, 2015. As
discussed in a previous section, the three pools
involved in this agreement are the Los Angeles
Basin Pool (LABP), the Grand Alliance Chassis
Pool (GACP) and the Direct ChassisLink Pool
(DCLP). The development of this cooperative
pool has been a two year process initiated by
POLA and POLB. Although they are landlord
ports and could not force a solution to the har-
bor’s inefficient chassis regime on the chassis pro-
viders, the ports acted as neutral brokers to bring
the parties together (Mongelluzo, B., 2015).
Commonly referred to as the “Pool of Pools”,
this agreement allows their chassis fleets to inter-
change between pools on a free-flow basis. It also
encompasses a combined fleet of approximately
81,500 chassis with an expanded set of 12 com-
mon start/stop locations covering all major ma-
rine and rail facilities in the port complex. Under
the “Pool of Pools” operation, any chassis in the
combined fleet can be utilized and dropped by
any party who is an authorized user in one or
more of the aforementioned pools regardless of
Figure 5.1 Number of Chassis per Leasing
Company in the Pool of Pools
April 27, 2015
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33
the markings on the individual unit (FlexiVan
Leasing, 2015). This cooperative “Pool of Pools”
operation is expected to increase overall availabil-
ity of chassis as well as eliminate chassis splits or
swaps previously caused by mismatches of users
and pools at San Pedro Bay port facilities.
With representatives from each of the three pool
operators overseeing daily logistics and reposi-
tioning of more than 81,500 chassis, this cooper-
ative pool will be instrumental in creating a new
supply model. Presently, eleven of the thirteen
container terminals at the San Pedro Bay ports,
as well as the off-dock rail yards, are taking part
in the new arrangement. The two remaining ma-
rine container terminals utilize their own equip-
ment, yet have the option to participate in the
future. This asset ownership agreement allows
the cooperating pools to remain commercially
independent, with each chassis provider compet-
ing for business and setting its own leasing terms
and rates.
However, since the cooperative chassis pool is
interoperable, it requires a third party to perform
various chassis usage reconciliation tasks while
meeting government regulations on anti-trust,
ensuring neutrality and keeping commercial
terms confidential (“Port Strategy”, 2015).
International Asset Systems (IAS) has taken
the responsibility to facilitate this operation
and audit cross-pool usage such that the pro-
cess remains transparent for users. IAS, which
is a neutral body without cargo or asset related
interests, connects shipper communities to the
goods transport industry. As an intermediary,
IAS enables asset providers to easily and conve-
niently rent their chassis to their motor carrier
partners and other potential chassis users. It also
enables easy registration, rental approval agree-
ments for motor carriers as well as monitors their
rented chassis fleet, view and reconciles chassis
rental charges, and facilitates easy downloading
of information for billing (The IAS Team, 2015).
It is evident that this model of chassis asset
ownership and provision aims for higher effi-
ciency and consolidated supply. With proper
business rules, data exchanges and support, it can
be anticipated that this pooling would ensure an
improved form of asset management than prior
practices. This system of chassis provision will
provide terminal operators and trucking com-
panies at the San Pedro Bay ports much more
flexibility in obtaining chassis which will ensure
reliable cargo operations.
Interoperability of chassis across the terminal
complex is expected to reduce time spent in
travel to pick up or return chassis, improving
motor carrier productivity which will in turn
benefit the shipping lines and beneficial cargo
owners utilizing the ports. Additionally, marine
terminal operators would not be required to seg-
regate chassis from the participating pools which,
along with greater utilization efficiencies, creates
valuable terminal open space in the crowded port
area.
Recommendations
Based on the above assessment of cooperative
pool chassis ownership and provision, a number
of improvements would help increase the effi-
ciency of the current approach. First, the ports
should require complete cooperation as well as
participation in the cooperative pool from con-
tainer terminals, shipping lines and the trucking
community. Additional space should be created
to provide for storage and management of the
cooperative pool chassis as well as for efficient
sorting of cargo. This would reduce wait times
for truckers and increase economic output,
generating benefits such as increased air quali-
ty due to decreased fuel usage while idling and
reducing congestion by increasing the efficiency
with which containers can enter and exit the
April 27, 2015
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34
ports. The success of the cooperative pool model
is dependent on ensuring maximum availability,
utilization, and value of chassis, as well as min-
imizing redundancy, congestion and waste. The
POLA and POLB should provide further ad-
justments and improvements to this new model
while working with existing partners to ensure
efficiencies are delivered.
April 27, 2015
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35
Chassis Storage
A large number of chassis are still stacked and
stored at marine terminals. Chassis pools have
increased the efficiency of daily operations
through interoperability, but they do not address
the inherent inefficiencies of storing, managing
and maintaining chassis on-dock. Containers
carrying freight generate revenue in the goods
movement business, not the chassis used to move
the containers. Chassis are only necessary tools
for inland haulage. If a container is not being
transported, it serves no operational function
to be stored on a chassis. The more chassis are
used for transporting containers, and not for
non-revenue relocation or storage, the greater the
ability to drive down chassis costs per intermodal
revenue move (Zumerchik, Rodrigue & Lanigan,
2012).
As supply chains became more sophisticated, the
nature of temporary container storage at termi-
nals has evolved. Instead of container storage be-
ing used solely for the synchronization between
transport modes, shippers and logistics service
providers started to use terminals for cost-free
storage of consignments. Now high dwell times
of containers are more likely to be attributed to
supply chain strategies rather than port terminal
operational challenges. One of the reasons is cash
flow. The majority of imported containerized
freight is controlled by the receiving cargo own-
er, and the terms of payment to vendors in many
cases are not cleared until the freight is delivered
to the facility. Naturally, receivers want to take
delivery of product as close as possible to the
date of sale to both improve cash flow and lower
inventory carrying costs. Because ports typically
give importers five days of free time allowance
before demurrage charges, cargo owners benefit
with the use of the port container yards as supply
chain buffers. It actually can be longer than five
free days when the demurrage charge clock of a
port does not start until all containers are dis-
charged. For instance, the containers unloaded
on day one could have a free time allowance of
seven or more days. The international container
stored long term at marine terminals worsens
chassis and container utilization, with the worst
case scenario being the supply chain combi-
nation of wheeled port terminals (five to eight
days) servicing drop/pick cargo receivers (anoth-
er 10 to 20 days). Depending on the goods being
transported/stored in the container, it is worth
noting that cargo owners may be willing to pay
the demurrage fees if the additional postpone-
ment benefits their strategy. Many international
cargo receivers have limited container storage
space at receiving facilities, and internal coordi-
nation between the transportation department
and store fulfillment operations is highly variable
(Rodrigue, Zumerchik & Ogard, 2012).
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36
Current intermodal terminals are landlocked
and have limited room for expansion, so there
is continual debate on how best to value land in
relation to operations. According to an internal
study related to the cost of chassis storage at
the POLA and POLB in 2007, over 300 acres
of useable land was occupied by stored chassis,
enough space to house a large shipping terminal.
This lack of productive use on high-value land
resulted in an estimated annual storage cost of
$50-$60 million. Thus, a greater share of users
providing their own chassis storage and opera-
tions will not only reduce cost, but also increase
throughput. Every acre not needed for chassis
storage is an additional acre available for con-
tainer storage and/or faster selection of customer
import containers because less stacking is needed
if there is sufficient space. Options for expansion
are limited at the ports, and purchasing adjacent
real estate is often not feasible because of lack of
availability, community opposition, high cost,
and the need for environmental remediation
(JWD Group, 2003).
As the percentage of chassis provided by the co-
operative pool increases, which in turn requires
storage of fewer chassis, terminal operators ex-
pect to see an improvement in most performance
metrics. Terminal operators also feel the land
cost (rent) of storing chassis at the terminal even-
tually will be passed along to the chassis pools
and result in higher per diem lease rates. This is
because the current practice of the container yard
serving as a supply of “free parking” for terminal
customers is effectively giving something away
for free that has a significant cost to the provid-
er. There are three components to this cost: the
direct cost in the form of rent; functional costs
of constructing, gating, monitoring, lighting and
maintaining the storage area; and the opportuni-
ty cost of using the land for some other produc-
tive use. (Rodrigue & Notteboom, 2009).
Recommendation
This report recommends that marine terminal
chassis storage be kept to a minimum and that
off-site, cooperative pool storage be utilized as
much as possible. This will free up the more
valuable terminal port land for economic ac-
tivities and enable the managers of the cooper-
ative pool to balance the fleet more efficiently
throughout their different storage yards.
April 27, 2015
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37
Chassis Availability
In current practices, “the anticipated flow of chassis between the terminals and the rail is discussed
every day to determine if repositioning of the chassis will be necessary” (Keever, 2005 as cited in
Le-Griffin & O’Brien, 2013, p. 21). Having chassis available at the right time and place is convolut-
ed and has been the nexus for chassis shortage at the San Pedro Bay ports (Mongelluzzo, 2014). By
exploring new strategies in chassis repositioning, POLA and POLB can take advantage of a series of
benefits that include: an improvement in motor carriers overall transaction movement by reducing
the time used to wait for an available chassis, better understanding of chassis inventory for leasing
companies and more efficient use of terminal space for terminal operators.
Chassis Locations
As mentioned previously, chassis will continue to be available for motor carriers at their existing loca-
tions under the pool of pools agreement. Motor carrier can pick up and/or drop off bare chassis at 12
different port terminal locations. These locations are listed in Table 5.2:
Repositioning Operation Group
With chassis available at so many locations, it is crucial that there are chassis available at the Port
Terminals when it is required by motor carrier. Hence, a Repositioning Operation Group (ROG) is
being established to facilitate the logistics of chassis management. The group will consist of staff from
the three major chassis leasing companies: DCLI, TRAC and Flex-Van. The following section iden-
tifies the challenges and opportunities the ROG will face with the new Pool of Pools chassis arrange-
ment.
Source: Flexi-Van Leasing, Inc., 2015
Table 5.2: Start/Stop Locations of Chassis
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38
Roadability Regulation
In 2009, the Federal Motor Carrier Safety Administration (FMSCA) implemented the Roadability
Regulation, which shifts the liability of the chassis’ condition from the motor carrier to the inter-
modal equipment provider, or IEP (Rodrigue, Zumerchik & Ogard, 2012). The purpose of the
Roadability Regulation is to establish systematic chassis inspection and provide a means of effectively
reporting defective or deficient equipment. To facilitate the administrative process, all chassis being
utilized are required to be marked by IEP on the chassis’ bolster and side rails (Consolidated Chassis
Management, n.d.). Figure 5.3 illustrates the stencils on the chassis that are being managed by Direct
ChassisLink, Inc.
Source: Direct ChassisLink, Inc. https://www.dcli.com/
Chassis Identification
Although chassis identification is done primarily due to the Roadability Regulation, it can also be
leveraged by leasing companies to keep track of chassis availability. By providing additional infor-
mation on the chassis, this process will be streamlined for the ROG. Chassis under the Pool of Pools
will have stencils corresponding to their associated chassis pool (TRAC Intermodal, 2015). Table 5.4
summarizes the stencils found on each chassis carrier alliance group.
Figure 5.3: Typical Chassis Stencil Identification
Table 5.4: Summary of Stencils Found on Each Chassis Alliance Group
April 27, 2015
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39
These labels will ensure a clear demarcation between chassis found in the Pool of Pools and foreign
chassis. According to Le-Griffin & O’Brien, foreign chassis are defined as chassis that are found on
the terminal premises but are not part of the alliance pool and were abandoned by motor carriers
(Le-Griffin & O’Brien, 2013). Currently, foreign chassis are extremely problematic for port termi-
nals, motor carrier and the ROG as they complicate the chassis transactions and take up terminal
space (see previous section for further information on chassis storage). The use of a chassis identifica-
tion stencil can help better manage chassis on terminal by enabling staff to quickly recognize where
different chassis belong. Figure 5.5 illustrates how the different chassis identification stencils can be
utilized to reduce complexity for the ROG.
Figure 5.5: Process of Retrieving Chassis at the Port Terminal
*Particular emphasis is made for chassis leasing companies that operate in a multitude of alliance
pools. For instance, Direct ChassisLink, Inc. manages chassis in for Direct ChassisLink Pool as well
as Grand Alliance Chassis Pool.
April 27, 2015
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40
Inbound and Outbound Gates, Prioritizing on What Matters
To facilitate the ROG’s management process, it is crucial that the terminal operators be rigorous on
chassis regulations at the inbound and outbound gates. By having more stringent regulations over
foreign chassis, better control can be obtained over which chassis are traversing in and out of the port
terminal. This will reduce the number of foreign chassis on the terminal and drastically reduce the
time it requires the ROG from searching for the appropriate chassis.
Secondly, the ROG should work in conjunction with terminal operators to consider having tempo-
rary priority lanes that are strictly for chassis movement. By providing these priority lanes, we can en-
sure that the supply of chassis is consistently available for motor carriers. The dwell time at the gates
may increase for motor carriers, but the overall dwell time for the entire transaction process can be
potentially reduced. Having these lanes are temporary also provides flexibility and increased control
for how the terminal operators manage the flow of containers.
The following is an example of a scenario that could be implemented at California United Terminals
(CUT) at the POLA.
April 27, 2015
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41
Case Study of CUT, POLA
One of the bigger terminals at the POLA, CUT on average process more than a million TEUs on
and off vessels each year (California United Terminals [CUT], 2011a). To handle such demand and
ensure efficiency, CUT has total of 10 and 6 inbound and outbound lanes, respectively. In terms of
chassis storage, there is approximately 2.8 acres of area with an additional 1 acre for foreign chas-
sis (as defined by CUT, “bad order chassis area”). Figure 5.6 is the terminal map of CUT (CUT,
2011b). The movement of chassis among the terminal are also highlighted in the figure.
The implementation of the Pools of Pools chassis arrangement based on the recommendations men-
tioned earlier could result in a series of benefits for CUT. First, by providing more strict regulations
at the gates, CUT could significantly reduce the area used to store foreign chassis and leverage this
surplus of land for either more cooperative pool chassis fleet or as temporary container storage area.
Second, if a vessel berths at CUT, the overall percentage of inbound trucks expecting a chassis is
38% (West & Thammiraju, 2010). In other words, 38% of the trucks with only bobtails would show
up at the inbound gates of CUT. With such a high percentage of inbound truck trips, CUT could
Figure 5.6: California United Terminal
April 27, 2015
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42
reduce the 10 inbound lanes to 9 lanes and enable 1 lane for the ROG. This way, CUT could pro-
vide sufficient amount of chassis supply via ROG trips without significantly hindering the 38% of
inbound trucks that need a chassis. Figure 5.7 provides an illustrative example of how the inbound
gates would function at CUT. This priority lane should be located on the far left lane so it will not
interfere with trucks entering the terminal land that already have a chassis or are carrying containers.
Figure 5.7: California United Terminal Chassis Movement
Leveraging Opportunity from the PierPass Program
Implemented in July 2005, the PierPass Program was introduced to extend the terminal’s operating
hours to mitigate peak hour congestion at the ports. So far, the PierPass program has shifted 30%
of the truck traffic to evening and weekends (Le-Griffin & O’Brien, 2013). As an alternative to the
dynamic priority lane, the ROG can leverage opportunities from the PierPass Program and utilize
off peak hours to complete chassis repositioning movements. This way, it would also eliminate the
competition with motor carriers during the peak hour periods.
Ocean carriers inform terminal operators a few days before the arrival of each vessel so that the ROG
can move chassis in accordance to the anticipated demand. If a vessel is expected to arrive in the next
April 27, 2015
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43
couple of days with 14,000 TEUs at POLB Total Terminal International (TTI), the ROG can use
the PierPass’ off-peak operating hours to transfer chassis to TTI prior to the vessel’s arrival. Table 5.8
summarizes the Terminals at San Pedro Bay ports that operate during off-peak period as of March 6,
2015. The green cells indicate that terminal is open that particular off-peak period and red indicates
that the terminal is closed.
Recommendations
Repositioning chassis is not a simple task. Ensuring chassis’ availability not only requires rigorous
effort from the ROG but also complementary effort from motor carriers and terminal operators. In
order to improve cooperative pool efficiency, the following steps are recommended:
Table 5.8 :Summary of Terminals at San Pedro Bay Ports that Operate during Off-Peak
All chassis under the Pool of Pools Chassis agreement should be required to have proper stencil iden-
tification. Marking of the carrier alliance pool (DCLI, LABP, GACP, or TNWA) should be on the
chassis’ bolster and side rails.
Terminal operators need to be stringent on rules for foreign chassis entering and leaving the terminal
land.
Both the terminal operator and ROG should implement priority lanes strictly for the purpose of
chassis repositioning. Alternatively, the ROG could pursue times for chassis repositioning that align
with the PierPass Program off-peak period hours.
Source: PierPass Program, 2015
April 27, 2015
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44
Lastly, the POLA and POLB should consider analyzing the environment and social impacts associat-
ed with the additional trips that are potentially made by the ROG. This would include the peak hour
congestion period as well as during the PierPass off-peak terminal hours.
April 27, 2015
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45
Chassis Inspection, Maintenance & Repair
Current Issue:
Chassis maintenance and repair was an issue in the recent union labor dis-
pute at the ports and continues to be a controversial issue on which parties
are reluctant to compromise. Many of the shipping lines purchased, main-
tained and repaired the chassis that truckers used to dray containers to and
from marine terminals for free before 2012. Under this conventional chassis
management model, the chassis inspection, maintenance and repair were
performed by ILWU mechanics since most of the shipping lines are members
of PMA, which retains a contractual relationship with ILWU. However, the
chassis management model has been changing from the conventional model
to a combination of neutral, terminal and cooperative model. Third-parties
like chassis leasing company have no contractual relationship with ILWU and
no obligation to ILWU for labor employment. It continues to be a concern in
the industry that leasing companies will have chassis inspection, maintenance
and repair work done at off-dock sites without ILWU workers.
The position of ILWU is clear: any change in chassis ownership shouldn’t
affect or change their jurisdiction over chassis inspection, maintenance and
repair. From ILWU’s perspective, the contractual relationship shifts from
between ocean carriers and ILWU to ILWU, leasing company, ocean carriers
and terminal operators. ILWU has been repeatedly urging terminal operators
to issue requirements that mandates on-dock pre-trip chassis inspection. This
would make ILWU mechanics the only eligible mechanics able to inspect
chassis before motor carriers are allowed to pull the chassis and containers
from their facilities. For ocean carriers and terminal operators, this issue
could be problematic considering that both parties don’t have ownership of
the chassis anymore.
Chassis Inspection:
Chassis inspections include individual chassis induction procedure, FMC-
SA (Federal Motor Carrier Safety Administration) inspection and pre-trip
inspection. Individual chassis induction procedure is required for all chassis
accepted into a pool and are usually required and conducted by individual
chassis pool managers. FMCSA inspection is a periodical inspection mandat-
ed by the federal government. Pre-trip inspection is required in the current
West Coast Chassis Pool Chassis Management Agreement before every chassis
departs from the terminal, which is negotiable in terms of the contractual
relationship between ILWU, leasing company, ocean carriers and terminal
operators. It is anticipated that the ILWU mechanics will demand the juris-
diction to inspect every chassis before it leaves the terminals
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46
Chassis Maintenance & Repair:
There are generally two locations where a chassis could be maintained: the
maintenance of chassis on the roadside and maintenance of chassis in the
storage pool. Roadside chassis maintenance is provided for chassis repair in
goods movement. Motor carriers use chassis only for the purpose that they
are interchanged for and are required to promptly return them to a valid start
or stop location listed in West Coast Chassis Pool Chassis Agreement. If the
chassis is interchanged by a motor carrier or is otherwise authorized by a mo-
tor carrier to be in the possession of other parties, the motor carrier has the
responsibility to abide all terms of this agreement in the same manner as it
is in possession of previous Motor Carrier. Additionally, when chassis is lost,
stolen from, badly damaged or destroyed by motor carrier, the responsible
user has the obligation to pay the actual cash value or the depreciated replace-
ment value of the chassis (West Coast Chassis Pool Chassis Agreement).
In regards to maintenance of chassis in a pool location, chassis owners or
chassis management companies have the responsibility to prevent potential
hazards such as broken chassis, corrosion, stolen or lost chassis, as well as
to keep the number of functional chassis in inventory at acceptable levels.
Chassis operator and owner, as appropriate, each have the right to recover
and arrange storage for any equipment that has been lost, abandoned, desert-
ed,impounded or otherwise located outside the possession of the motor carri-
er responsible for such equipment, if after reasonable notification by operator
or owner, motor carrier fails to recover and return the chassis to the terminal.
According to West Coast Chassis Pool Chassis Agreement, there are two
scenarios under which chassis repair can occur: fixing reparable damage to
the chassis and replacing tires. Any damage to equipment or repair of damage
to tires during trucker’s possession is the sole responsibility of motor carrier
while repair of equipment and tires unrelated to damage occurring during
motor carrier’s possession is the sole responsibility of the operator and owner.
Recommendations:
To improve the efficiency of chassis maintenance:
On-dock pre-trip inspection should be conducted by ILWU labor as claimed
in the current West Coast Chassis Pool Chassis Management Agreement
regardless of the ownership of the chassis.
Chassis leasing and management companies should conduct its own individ-
ual chassis induction inspection.
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47
Chassis maintenance and repair at the official start and stop locations as
agreed by each party should be conducted by ILWU labor. Third-party,
chassis leasing and management companies would coordinate the return of
broken chassis to start and stop locations for repair.
Chassis leasing and management companies should provide roadside chassis
maintenance and repair.
Table 5.9: Table of Chassis Maintenance Responsibilities
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48
Chassis Adminstration (Billing, Leasing, etc.)
The cooperative pool operators will manage their own respective pools which involves inde-
pendently establishing their own proprietary rates for daily chassis usage and also continu-
ing to be competitive with each other (Longshore and Shipping News, 2015). The three
operators are keeping the same rates, insurance models, and leasing agreements as before.
The biggest change is the interoperability of the chassis themselves.
Table 5.10 shows the daily market rates for three major leasing companies that make up
the Pool of Pools. Most trips utilize the daily chassis rental rate. All of the charges are per
chassis, per calendar day or any part thereof.
By charging daily rates, the Pool of Pools discourages the use of chassis for storage and
drop-and-hook operations. This also incentivizes motor carriers to return the chassis after
each use, resulting in a higher chassis daily use rate for the supply pool. The collaborative
pool must also consider maintaining economically competitive daily rates to discourage
motor carriers and BCOs from purchasing their own chassis, which would reduce the need
to utilize the pool. CCM, the largest chassis management company in the U.S., has seen its
daily chassis rates increase by 45 percent since 2010 (Mongeluzzo, 2014). Table 5.11 shows
that owning or long-term leasing of chassis could be more cost-efficient for motor carriers.
If motor carriers invest in their own fleet, then they would be responsible for maintenance
and repair, roadability regulations, labor, and storage. However, if the bottom line is im-
proved by securing their own chassis supply, then motor carriers could stop utilizing the
cooperative pool.
Table 5.10: Daily Market Rates for Leasing Companies in Pool of Pools
Source: DCLI 2014
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49
Recommendation
Due to the recent adoption of the Pool of Pools approach, it is recommended that the current pricing
scheme remain in place, which allows the three major leasing companies to compete on daily rates.
This pricing scheme should ensure a competitive daily rate, thereby discouraging motor carriers from
purchasing chassis and maximizing the use of the collaborative pool.
Table 5.11 Cost of different chassis ownership + lease structures
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50
Summary of Recommendations
1. Chassis Ownership and Provision
2. Chassis Storage
3. Chassis Availability
a) POLA and POLB should require participation in the cooperative pool
from container terminals, shipping lines and the trucking community.
b) Minimize chassis storage on-dock to allow for efficient sorting of con-
tainers at the terminal.
c) Chassis management should be structured to ensure maximum avail-
ability, utilization, and value of chassis and minimum redundancy, con-
gestion and waste.
d) POLA and POLB should provide further adjustments and improve-
ments to the new cooperative model while working with existing part-
ners to ensure efficiencies are delivered.
a) Keep on-dock marine terminal chassis storage to a minimum
b) Utilize off-site, cooperative pool storage as much as possible.
a) Require all chassis under cooperative pool management to have proper
stencil identification on the bolster and side rails.
b) POLA and POLB should require terminal operators to be stringent
on rules for foreign chassis entering and leaving the terminals.
c) Both the terminal operators and ROG should implement priority
lanes strictly for the purpose of chassis repositioning.
d) ROG should implement times for chassis repositioning that align
with the PierPass Program off-peak period hours.
The recommendations of this report based on the assessment of the current Pool of Pools model are
summarized below:
April 27, 2015
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51
4. Chassis Inspection, Maintenance & Repair
a) Regardless of chassis ownership, on-dock pre-trip inspection should be
conducted by ILWU labor according to the current West Coast Chassis
Pool Chassis Management Agreement.
b) Chassis leasing and management companies should conduct their
own individual chassis induction inspection.
c) Chassis maintenance and repair at the official start and stop locations
should be conducted by ILWU labor. Third-party, chassis leasing and
management companies should coordinate the return of broken chassis
to start and stop locations for repair.
d) Chassis leasing and management companies should provide roadside
chassis maintenance and repair.
a) Due to the recent adoption of the Pool of Pools approach, it is recom-
mended that the current pricing scheme remain in place until such time
that market forces necessitate a change.
b) The pricing scheme should ensure a competitive daily rate, thereby
discouraging motor carriers from purchasing chassis and maximizing the
use of the collaborative pool.
5. Chassis Adminstration
e) POLA and POLB should analyze the environment and social impacts
associated with truck trips for chassis repositioning.
April 27, 2015
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52
Reference
California United Terminals. (2011a). Welcome to California United Terminals (CUT). California
United Terminals (CUT). Retrieved from http://www.shipcut.com/.
California United Terminals. (2011b). Yard Map. California United Terminals (CUT). Retrieved
from http://www.shipcut.com/yard-map.php.
Consolidated Chassis Management. (n.d.). Frequently Asked Question (FAQ). Consolidated Chassis
Management. Retrieved from http://www.ccmpool.com/Chassis-Pools/CCM-Pool-General-FAQ-
Page.aspx.
Flexi-Van Leasing, Inc. (2015, March 2). Pools of Pools Operation in Los Angeles and Long Beach
Begins March 1, 2015. Flexi-Van Leasing, Inc. Retrieved from https://www.flexi-van.com/Flexi-
CloudNewsAnnouncements/Intermodal/FVLIPoolofPoolsLABPMarch012015.pdf.
PierPass Program. (2015, March 6). PierPass OffPeak Schedule. PierPass. Retrieved from http://
www.pierpass.org/wp-content/uploads/2015/02/RollingSchedule.From-3.6.15.pdf.
Mongelluzzo, B. (2014, September 23). DOJ ruling will help resolve chassis shortages at LA-Long
Beach. Journal of Commerce. Retrieved from http://www.joc.com/port-news/us-ports/port-los-ange-
les/doj-ruling-will-help-resolve-chassis-shortages-la-long-beach_20140923.html.
TRAC Intermodal. (2015, March 13). Pool of Pools – Frequently Asked Questions. TRAC Inter-
modal. Retrieved from http://www.tracintermodal.com/wp-content/uploads/2015/03/TRAC-Inter-
modal-Pool-of-Pools-FAQs-3-13-2105dh.pdf.
Rodrigue, J.P., Zumerchik, J. & Ogard, E. (2012, August 1). The U.S. Transition to a Motor Car-
rier Supplied Marine Chassis: Operational Impacts On and Off Terminal. Transportation Research
Board, Paper 13-4625. Retrieved from http://people.hofstra.edu/jean-paul_rodrigue/downloads/
TRB%20Chassis%20Paper%2080112%20FINAL.pdf.
West, R. & Thammiraju, R. (2010, November 1). Ports of Los Angeles and Long Beach Year 2010
Marine Terminal Gate Surveys. [Draft Memorandum]. Oakland, CA: Cambridge Systematics.
West Coast Chassis Pool Chassis Agreement, Retrieved from:http://www.emodal.com/common/mo-
torcarrier_wccpchassisagreement.pdf
April 27, 2015
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53
ILWU & PMA- Tentative Agreement on Chassis Maintenance & Repair Reached. Retrieved
from:http://www.junologistics.com/ilwu--pma---tentative-agreement-on-chassis-maintenance--re-
pair-reached---update-jan-27-2015/
Inspection, Repair and Maintenance Regulation Part 396, Federal Motor Carrier Safety Administra-
tion, Retrieved from:http://www.fmcsa.dot.gov/regulations/title49/section/396.17
Mongelluzo, B. (2015, Feb 28) LA-Long Beach , Chassis Lessors Form Neutral Chassis Pools. Trac
Intermodal. Retrieved From http://www.tracintermodal.com/index.php/la-long-beach-chassis-les-
sors-form-neutral-chassis-pool/
Flexi Van Leasing. (2015, March 2). Pool of Pools Operation in Los Angeles and Long Beach Begins
March 1. Retrieved From https://www.flexi-van.com/FlexiCloudNewsAnnouncements/Intermodal/
FVLIPoolofPoolsLABPMarch012015.pdf
(2015, March 3). ‘Pool of Pools’ Uncovered. Port Strategy. Retreived From http://www.portstrategy.
com/news101/port-operations/planning-and-design/pool-of-pools-uncovered
the IAS Team. (2015, March 16). What do the West Coast Port Strikes Mean to My Supply Chain.
Retreived From http://interasset.com/blog/
(2015, Feb 27). Leading Chassis Providers Announce “Pool of Pools”, Operations commence March
1, 2015. PR Newswire. Retrieved From http://www.prnewswire.com/news-releases/leading-chas-
sis-providers-announce-pool-of-pools-operations-commence march-1-2015-300043150.html
Rodrigue, J. et al. (n.d.). Intermodal Chassis Utilization: The Search for Sustainable Solutions. Re-
treived From http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaperjprev3.
pdf
Rodrigue, J. et al. (n.d.). Intermodal Chassis Utilization: The Search for Sustainable Solutions. Re-
treived From http://people.hofstra.edu/jean-paul_rodrigue/downloads/chassisutilizationpaperjprev3.
pdf
Roy, M. (2015). (Still) Evolving US Chassis Supply Market [ Powerpoint slides]. Retreived From
ket.pdf
Roy, M. (2015). (Still) Evolving US Chassis Supply Market [ Powerpoint slides]. Retreived From
ket.pdf
WD Group. (2003). U.S. Container Terminal Throughput Density. Report to the Port of
Houston Authority.
April 27, 2015
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54
Rodrigue, J. P., & Notteboom, T. (2009). The terminalization of supply chains: reassessing the role
of terminals in port/hinterland logistical relationships.Maritime Policy & Management, 36(2), 165-
183.
Rodrigue, J. P., Zumerchik, J., & Ogard, E. L. (2012). The US Transition to a Motor Carrier Sup-
plied Marine Chassis: Operational Impacts On and Off Terminal. In Working Paper.
Zumerchik, J., Rodrigue, J. P., & Lanigan Sr, J. (2012, April). Automated transfer management
systems and the intermodal performance of North American freight distribution. In Journal of the
Transportation Research Forum(Vol. 48, No. 3).
April 27, 2015
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55
VI. Lessons Learned: Successful Chassis Sharing Examples
April 27, 2015
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56
Successful Chassis Sharing Examples
The newly formed Pool of Pools should look to other chassis pools that have been implemented
around the country to determine the best practices for effectively managing their shared resources.
With multiple IEPs competing within the pool, it was necessary for a third party, International Asset
System (IAS), to act as a neutral manager and moderator for the Pool of Pools (Pool of Pools Uncov-
ered, 2015). IAS will be responsible for ensuring coordination among pool contributors and per-
forming functions such as shared expense apportionment, forecasting, and migration management
(Port Performance Task Force, 2014). IAS is also in the challenging situation of determining whether
the inventory of available chassis is able to meet the demand; however, before this can be deter-
mined, the company has to ensure that the current supply is being managed correctly. Purchasing
more chassis inventory may not be a viable option with the current location constraints. To add to
the complexity is that many supply chain professionals foresee chassis pools as the intermediate step
before individual motor carriers begin purchasing their own chassis, which would diminish the need
for a chassis pool (Rodrigue, 2012).
Other chassis pools and IEPS around the county have implemented a Chassis Management System,
which establishes set parameters, or key performance indicators (KPIs) to be tracked during pool
operations. Table 6.1 lists common KPIs for chassis management:
Table 6.1: Key Performance Indicators for Chassis Management
Source: “Port Performance Task Force”, 2014
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57
Consolidated Chassis Management (CCM), one of the largest chassis management companies in the
United States with over 140,000 chassis in various pools, currently deploys a sophisticated manage-
ment information system to track real time chassis usage rates (Systems, 2015). IAS currently utilizes
ChassisManager with the San Pedro Bay chassis pools, an online system for members to register,
receive rental agreement approval, monitor their rented chassis fleet, view and reconcile chassis rental
charges, and easily download information for billing (“High Tech and High Touch” 2015). This sys-
tem will need to be expanded to track and manage the common KPIs listed in Table 6.2
Another tool being implemented with other chassis pools is the ‘street turn system.’ A ‘street turn
system’ is an online platform that allows chassis pool members to match up, or re-use, containers and
chassis at off-dock service locations. By using the system, members can post information on contain-
er or chassis availability, exchange equipment outside of port terminals, and make informed decisions
on equipment utilization. Figure 6.2 shows the efficiency flows that could be gained with ‘street turn’
implementation. In 2007, the Port Authority of New York and New Jersey developed a pilot project
known as the ‘Virtual Container Yard’ that helped facilitate the transfer of containers and chassis for
reuse outside of the terminal (Port Performance Task Force, 2014).
Source: “Port Performance Task Force”, 2014
Figure 6.2: Street Turn Design
April 27, 2015
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58
References
1. “High Tech and High Touch – Your Chassis Are Taken Care of.” (n.d.). IAS ChassisManager. IAS.
Web. 08 Apr. 2015. <http://www.interasset.com/chassis-manager.php>.
2. “Intermodal Transportation Solution Eliminates Empty Miles and Documents Asset Transfer.”
(2014, September 18). IAS ChassisManager Facilitates Street-Turns. IAS. Web. 08 Apr. 2015.
<http://www.interasset.com/news/pr/2014/IASChassisManagerFacilitatesStreetTurns.php>.
3. “Pool of Pools Uncovered.” (2015, March 3). Port Strategy. Web. 7 Apr. 2015.
4. “Port Performance Task Force.” (June 2014). The Port of New York and New Jersey. Web. 05 Apr.
2015. <http://www.panynj.gov/port/pdf/pptf-final-report-june-2014.pdf>.
5. Rodrigue, J., Zumerchick, J., Lanigan, Sr, J., & Barenberg, M. (2012). Intermodal Chassis Utiliza-
tion: The Search for Sustainable Solutions. Retrieved April 9, 2015, from http://people.hofstra.edu/
jean-paul_rodrigue/downloads/chassisutilizationpaperjprev3.pdf
6. “Systems.” (2015). Consolidated Chassis Management. Web. 08 Apr. 2015. <http://www.ccm-
pool.com/Customer-Tools/Systems.aspx>.
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59
VII. Alternatives
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60
One alternative to the Pool of Pools model would be the evolution of the chassis management system
into a single regional ‘super pool’. Under this model, all ocean carriers, motor carriers, and IEPs
would have to renegotiate chassis hosting, usage, contribution, and operating agreements with the
regional ‘super pool’, which would act as the sole pool operator. Competition would be reduced but
a major delay in implementation could occur due to the need to renegotiate the chassis management
agreements. Once these new agreements are established, the ‘super pool’ model has the potential to
reduce chassis management complexity and administrative costs. However, there are potential chal-
lenges with this approach. The regional ‘super pool’ further commits the San Pedro Bay ports into a
pool sharing model when the supply of chassis is still influx and questions remain on the future of
chassis ownership. The recommended improvements to the Pool of Pools approach made in this re-
port would provide the San Pedro Bay ports with the flexibility to adapt and grow over time without
overly committing to a single pool approach.
Another alternative would be for the San Pedro Bay ports complex to transition to having motor
carriers and BCOs own and manage their own chassis fleets. This approach, utilized throughout
many major port areas around the world, would take advantage of the fact that domestic chassis
replacements will be necessary in the near future. With the average age of the U.S. chassis fleet at 15
years of age and the useful life of chassis at only 20 years of age, the next five years is a critical time to
invest in the chassis management system that will most effectively utilize the chassis fleet. For exam-
ple, Lowe’s, one of the top importers in the United States, recently announced the long-term lease
of a dedicated chassis fleet with Flexi-Van and Atlantic Intermodal Service, without any third-party
intervention (Mongeluzzo, 2014). The prime advantage of moving to the motor carrier/BCO mod-
el is that costs per intermodal revenue move would be at their lowest because the chassis would be
used strictly for transportation, and not for operations or storage (Rodrigue et al., 2012). By owning
chassis, motor carriers would need to maximize the utilization of the chassis through transportation
to keep costs as low as possible. On the other hand, moving to the motor carrier model would carry
some inherent risks. Motor carriers and BCOs would have to address questions of storage require-
ments, chassis maintenance and repair, and maintaining roadability regulations. Most importantly,
this model would require motor carrier companies and BCOs to make a substantial capital invest-
ment, while these costs are currently distributed among the current participants in the Pool of Pools
Alternatives
April 27, 2015
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61
VIII. Stakeholder Implications
Image courtery of LA Times
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62
Stakeholder Implications
The Pool of Pools supply model at the POLA
and POLB includes a wide range of stakeholders
with direct and indirect interests, expectations
and performance needs in terms of chassis supply
and movement. They range from BCOs, ocean
carriers, motor carriers, marine terminals, public
agencies and planning organizations including
port authorities, and unions responsible for chas-
sis maintenance and repair.
Motor carriers will witness the most significant
change with this new chassis supply model. The
ease of utilizing and dropping chassis at any
of the twelve start/stop locations will increase
efficiency and driver productivity while reduc-
ing waiting time and congestion. This reduction
in time spent to pick up or return chassis will
maximize driver turn times, and minimize delays
in sourcing chassis. This increase in motor carrier
productivity will also benefit BCOs, who expect
deliveries to arrive on time and prefer a perennial
supply of chassis to minimize any transit delay.
Terminal operators will also benefit from this
model as they will now have more flexibility in
obtaining chassis and would not be required to
segregate chassis from the participating pools.
This will be instrumental in opening up valuable
terminal real estate in the crowded port area.
Public agencies and planning organizations have
interests that revolve around land use, traffic and
environmental implications. Since the Pool of
Pools model has the potential to reduce conges-
tion on roads by minimizing truck movements,
this would positively affect air quality and road
safety in the communities around the San Pedro
Bay ports. Public institutions and neighbors
will also benefit from a decrease in overall land
footprint necessary due to efficient storage and
management.
The ILWU, as the entity currently responsible for
inspection, maintenance and repair of the chas-
sis, is a crucial stakeholder to consider because
the chassis providers the in the Pool of Pools
model are not members of the Pacific Maritime
Association (PMA) and therefore are not con-
tractually obliged to utilize the ILWU. The tenta-
tive agreement currently in place suggests that
ILWU will have jurisdiction to inspect chassis
before they leave the terminal; however, this still
needs to be voted on by the ILWU.
Finally, the public authorities that run the POLA
and POLB will need to adjust to this new supply
model of chassis operation while catering to the
existing market. This shift from old to new will
requires new systems, procedures, processes and
skill sets. Therefore, the San Pedro Bay ports
will need to ensure full cooperation from other
stakeholders and maintain efficiency standards
in order for this model to be a success. At this
early stage in implementation, the cooperative
pool model has done a good job integrating the
priorities of the various stakeholders involved.
Each stakeholder is invested in the model, either
operationally or financially. That being said, the
three companies owning the different pools have
the biggest responsibility for running this por-
tion of the supply chain. Successful long term
implementation will result in increasing im-
provement to the environment due to decreased
fuel usage and further reductions in congestion
due to more efficient chassis fleet management.
April 27, 2015
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63
References:
NCFRP . (2012). Guidebook for Assessing Evolving International Container Chassis Supply Model.
Washington D.C.: Transportation Research Board.
(2015, Feb 27). Leading Chassis Providers Announce “Pool of Pools”, Operations commence March
1, 2015. PR Newswire. Retrieved From http://www.prnewswire.com/news-releases/leading-chas-
sis-providers-announce-pool-of-pools-operations-commence march-1-2015-300043150.html
April 27, 2015
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64
April 27, 2015
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65
IX: Conclusion
Image courtesy of LA Times
April 27, 2015
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66
Over the past five years, the chassis ownership, operations, and management model in the United
States has undergone a massive transition. The supply and availability of chassis across the nation’s
ports was thrown into disarray after ocean carriers began to divest from providing and managing
chassis in 2010. As highlighted in this report, the effects were especially felt at the nation’s busiest
intermodal hub, the San Pedro Bay ports complex. With each passing year, the San Pedro Bay ports
have made incremental steps towards evolving into a more efficient model. This transition culminat-
ed in March 2015 with the launch of the Pool of Pools. By evolving from an ocean carrier chassis
model to a collaborative pool model, the ports took a critical step in redefining their chassis manage-
ment structure and addressing the uncertainty created only a few years prior.
With such a recent launch date, the Pool of Pools chassis model has yet to produce conclusive data
and results on the efficacy of its management structure. One advantage of being so newly formed is
that the model can still adjust and evolve to meet the needs of its stakeholders. Currently, the Pool
of Pools is operating as multiple pools with an inter-pool usage agreement, which allows all previ-
ous operating arrangement between shipping lines, motor carriers, and IEPs to remain in place. The
main operational difference of the Pool of Pools from the previous model is the inter-pool usage
agreement overseen by the third-party entity IAS. Because all existing operating arrangements were
maintained, the Pool of Pools was able to immediately address the issue of interoperability, which
was at the root of the chassis dislocation crisis in 2014 (Mongeluzzo, 2014). The Pool of Pools coop-
erative model should remain in place and continue to improve based on the recommendations in this
report.
While this report supports the benefits created by the Pool of Pools, it also provides several recom-
mendations to become even more efficient, cost-effective, and functional for its stakeholders. These
recommendations should be implemented over the next two to three years in order for the ports to
continue refining and improving their cooperative pool model. Depending on the performance of
these recommendations, additional refinements and improvements will likely be necessary. In other
Conclusion
April 27, 2015
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67
References:
Mongelluzzo, Bill. “Chassis Crisis at LA-LB.” Chassis Crisis at LA-LB. Journal of Commerce, 3 Feb.
2014. Web. 20 Apr. 2015.
April 27, 2015
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April 27, 2015
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69
X : Contributing Authors
April 27, 2015
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70
Rebecca Chung is dual degree
student of the Master of Planning at the USC Sol Price
School of Public Policy and Master of Science in Civil
Engineering – Transportation Engineering at USC
Viterbi School of Engineering. She is expected to grad-
uate in May 2015 with emphasis in Transportation and
Infrastructure Planning. As a long-term career objective,
she wishes to gain an insight in transit planning, specif-
ically in the interaction between transit infrastructure
and urban land use.
In May 2013, Ms. Chung graduated on the Dean’s
Honor List from the University of Waterloo, Canada
with a Bachelor of Applied Science, Civil Engineering.
Through several internships in the undergraduate pro-
gram, she brings to the team over two years of expe-
rience in transportation planning and engineering in
both the public and private sector setting. She has been
involved with various types of projects such as traffic
impact studies, parking studies, traffic operations and
transit projects.
Ms. Chung is a highly capable individual with a strong
academic background and possesses a comprehensive
understanding of the technical elements of transporta-
tion planning through her work experience. She hopes
to amalgamate ideologies found in engineering and
urban planning such that she can conceptualize the
problem analytically but also consolidate it with the
spatial thinking of a city planner.
Ms. Chung is currently working at Fehr & Peers
Transportation Consultant (Los Angeles Office) as a
transportation planning intern where she assist the
team members in urban transportation demand forecast
modeling.
Qianyao Duanis currently a sec-
ond-year graduate student enrolled in Master of Planning
at USC Sol Price school of Public Police. With the con-
centration of transportation and infrastructure, she is very
interested in transportation planning based on Geographic
Information Systems (GIS). Also, she is expected to get the
Geographic Information Science and Technology Certifi-
cate when she graduate in May 2015.
Prior to the her studying at USC, Qianyao studied GIS
for four years in Wuhan University of Technology and got
a Bachelor of Science Degree in GIS. With both the bache-
lor’s degree in GIS and the GIST certificate, Qianyao has
very solid knowledge and practical skills in data acquisi-
tion, data processing, database establishment, as well as
spatial analysis and modeling.
Qianyao is now working as the Forecasting and Modeling
Intern at Southern California Association of Governments
(SCAG). She mainly conduct quality control and address
data requests from local inputs across the SCAG Region
for the Regional Transportation Plan/Sustainable Com-
munity Strategy (RTP/SCS). From April 2014 to March
2015, Qianyao worked as the Research and Evaluation
Intern at Community Health Councils, where she primar-
ily supports data management and community research for
the Center for Diseases Control and Prevention (CDC)
funded projects, including Racial and Ethnic Approaches
to Community Health (REACH) Grant and
Community Transformation Grant (CTG).
April 27, 2015
FINAL REPORT

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