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What do the West Coast Port Strikes Mean to My Supply Chain?

Posted on: March 16th, 2015 by The IAS Team No Comments

A tentative agreement has been reached between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), ending the 9-month standoff between the parties operating the US West Coast ports. While this is good news, there is still so much backlog at the ports that it will take several months for the ports to operate at normal levels.

Congestion began building earlier last year, even before the last contract expired July 1. Employers have said union-coordinated work slowdowns exacerbated the problem, and provided data that cargo has been moving at about half its normal rate since the fall. However, both the PMA and ILWU have committed to return to full productivity levels immediately.

The port bottlenecks have caused a ripple effect that is deep and wide across nearly every industry. From perishable foods to automotive parts to retail products, pretty much every supply chain along the way has been disrupted, causing missed shipments and unhappy customers. Per Port Strategy magazine, “When port operations slowdown, and cargo begins to build up, a port-wide gray chassis pool is said to be one of the best options for efficient chassis provisioning.”

The recent announcement of the establishment of the Pool of Pools, which will provide chassis for the transportation of containers between ports, rail yards, and cargo destinations, will be a major help for smoothing operations at the West Coast ports. Chassis providers at the ports have created a pool of chassis available to rent or lease to help move the containers.

Per the recent press release, “The participating pool managers will monitor usage of the fleet and cooperate on the positioning of chassis across the complex, and will utilize a third party service provider to facilitate operation of the concept. This third party service provider will audit cross-pool chassis usage to allow the pools to compensate one another for such usage on a regular basis, and assist in preventing the exchange of competitively sensitive information between the pools and chassis providers.”

This third party is International Asset Systems, which created ChassisManager to facilitate chassis provisioning. IAS ChassisManager enables asset providers to easily and conveniently rent their chassis to their motor carrier partners and other potential chassis users. It also enables motor carriers to easily register, receive rental agreement approval, monitor their rented chassis fleet, view and reconcile chassis rental charges, and easily download information for billing.

IAS billing scheme vows to end tortured history of US chassis provisioning

Posted on: October 3rd, 2014 by The IAS Team No Comments

As Seen in Shipping Gazette 2 October 2014

US DOCKSIDE chassis provider IAS-International Asset Systems feels it has identified and resolved the big billing problem that has troubled forwarders and cargo owners procuring trailers since carriers stopped doing it in recent years.

“The administration and accuracy of billing is the problem,” said IAS chief operations officer John Allen in response to questions from the Hong Kong Shipping Gazette.  ”When an ocean carrier makes an exception with a customer to absorb the charges for a chassis, the carrier must be able to inform the billing entity of that fact for the specific moves in question,” he said.

And this is where carriers fall down, he said, adding that his Oakland-based company has devised a billing system that uses gate activity information, itemising billable moves and identifying who pays for what. ”We make this information available to all billable parties in real time, so the party paying (motor and ocean carriers) gets accurate invoice and complete back-up info. We also have a support team to reconcile billing problems,” he said.

Such systems, it is hoped, will spread to bring to an end the tortured history of dockside chassis provision, which carriers abandoned in the US a few years ago, leaving all in state of confusion.

In the US, ocean carriers have traditionally provided chassis at no direct charge to trucking companies or cargo owners. In other countries, truckers own or procure chassis. Ocean carriers formed “pools” to share the chassis and manage usage of the chassis by the trucking companies in some busy port and inland rail terminal locations.

Several years ago, Maersk said it would end its ownership and free chassis provisioning and in 2012, the company had sold them to leasing companies. Soon other carriers stopped providing chassis. But this did not mean ocean carriers were no longer responsible for the cost of chassis provisioning.

As carriers sold their chassis, the large asset companies took over, apportioning cost according to the terms of each container move. They would bill the cargo owner, the trucking company or the ocean carrier depending on the specifics of the deal that often lacked clarity. Mistakes were many and dissatisfaction grew. Ocean carriers got out to trim costs as the shipping industry faced global overcapacity and falling rates. Not only the costs of the chassis provisioning itself, but there was the expense of repairs and legal liability, too.

So carriers sold their owned assets to leasing companies and returned leased fleets to the lessors. Some arrangements required a commitment of usage on the part of the ocean carriers. In response, some forwarders, were able to persuade carriers to continue to pay for the chassis regardless of whether the move was merchant or carrier haul.

Many shifted their bill of lading terms with the ocean carriers from merchant to carrier haul. For the most part, if it were a carrier haul move, the liner company would either pay the equipment provider directly for the carrier haul usage or they were billed by the trucker for the move to the customer’s location. Chassis are still available, but the supplier and billing model has changed.

The end of the carrier’s central role means truckers are responsible for the chassis charges if rented or operating costs if owned. Leasing companies or chassis pool operators can bill trucking companies for their specific usage. Truckers would rebill their respective customer for the use. This could be either the cargo owner or the ocean carrier.

To Mr Allen, the new way is more efficient as it requires fewer assets to handle the volume due to economies of scale. This way, he says, one combines disparate supply points and providers, and having fewer parties involved while increasing trucker flexibility.