Last year might be one both shippers and transportation companies moving cargo through the Port of New York and New Jersey would like to forget. Congestion got so bad in the summer of 2013 that one carrier, Hapag-Lloyd, actually suggested customers reroute cargo to other ports. The winter was also difficult, with snow and ice snarling traffic in those container terminals.
The Port of New York and New Jersey organized a Port Productivity Task Force last December to address problems within the port and issued a report in June with a large number of recommendations. A Council on Port Performance (CPP) was created to implement those ideas.
One CPP subgroup is tackling issues surrounding intermodal equipment, seeking a way to implement the task force’s recommendation that the industry create a “market pool” for chassis.
Keith Lovetro, chief executive officer of TRAC, the country’s largest chassis company and operator of the largest pool in the Port of New York and New Jersey—the Metro Pool, said CPP will address the details of how to create such a market pool, including who will actually run it.
The market pool would be a port-wide pool with interoperability, meaning chassis could be used to move boxes that come from any of the terminals or liner carriers in the port.
The pool would not set prices, nor collaborate about anything that has to do with commercial relationships with customers. Members of the pool would still compete with each other, but the task force thought a market pool could help solve some of the problems the port experienced with lack of equipment and imbalances last year.
Lovetro said there are a variety of reasons why the port has constraints in chassis today. In addition to the number of chassis in the port and lack of interoperability, he said the mechanics who repair chassis are not always where the chassis that need to be serviced are located.
Just as some ports handle more imports than exports, or vice versa, terminals within a single port like New York/New Jersey have surpluses or deficiencies of chassis. Of the five terminals in the port, two tend to be heavy on exports and accumulate chassis, while the other three receive more imports and run shortages of equipment.
Meanwhile, Lovetro outlined steps TRAC is taking on its own to improve the supply of chassis in the port, including:
- Adding about 2,000 chassis to the N.Y./N.J. Metro Pool fleet of 21,000 this summer. The company estimates that it has about 63 percent of the 33,500 chassis in the New York/New Jersey area.
- Increasing the number of chassis being repaired by paying more mechanics to work overtime.
- Creating a system where it loads chassis that need to be repaired onto flatbed trucks and taking them from terminals where they have accumulated in terminals where there are enough mechanics to fix them. Such moves used to be done on a sporadic basis, but Lovetro said the company is creating a system where chassis will be relocated on a daily basis.
- Refurbishing older chassis in TRAC’s container yards—sandblasting and repainting them, putting in new air supply and hydraulics so that they are “like new.” The company has contracted for 1,800 refurbished chassis over the next 12-18 months and is looking for another contract to refurbish another 1,000 chassis.
The structure of the market pool—who will own it and how it is governed—is a subject of discussion among members of the CPP.
Lovetro supports the idea of having qualified companies bid to manage the pool and said TRAC would hope and expect to win such a contract—but adds, with an open bid “you can never be sure… there’s probably three, four companies that would want to put their name in the hat to try to win that bid. Let the best man win.”
Lovetro is optimistic about the future of the Port of New York and New Jersey, saying the whole focus of both the task force and CPP was to “create an environment that allows that port to grow.”
“Are we making headway? Yes we are. Have we fixed it all yet? Not yet, but at least we’ve got a lot of folks with a lot of effort pushing to solve the problem, so from that perspective I’m pretty encouraged.”
This commentary was published in the September 2014 issue of American Shipper.