Intermodal truckers secure win against ocean carriers

Date: Tuesday, February 7, 2023
Source: FreightWaves

WASHINGTON — Intermodal truck drivers and their companies operating in four U.S. geographical regions may soon have more choices among providers of the chassis they use to haul ocean containers to and from ports and container yards.

Erin Wirth, Federal Maritime Commission chief administrative law judge, issued an initial decision on Monday. Wirth ruled, among other things, that exclusive agreements between ocean carriers and chassis providers violate the U.S. Shipping Act when a motor carrier is not able to use the chassis provider of its own choosing in Chicago; Los Angeles/Long Beach, California; Memphis, Tennessee; and Savannah, Georgia.

The American Trucking Associations’ Intermodal Motor Carriers Conference (IMCC), which filed the lawsuit at the FMC in August 2020 against a national chassis pool operator and 11 ocean carriers, said the decision is a win for chassis choice.

“This victory has been a long time coming,” said IMCC Executive Director Jonathan Eisen. “The decision is the first step in putting a stop to the practice of foreign-owned shipping lines forcing American drivers and motor carriers to use specific equipment providers to move goods — which will help reduce supply chain delays and cut costs for carriers and consumers.”

Officials at the Ocean Carrier Equipment Management Association Inc. (OCEMA) and Consolidated Chassis Management LLC (CCM), which were named in the suit and oversee and manage the chassis pools at issue, did not immediately respond to a request for comment.

OCEMA developed CCM to adopt regional equipment pools to give truckers more chassis choices. But truckers have complained that “freedom of chassis choice” has been eroding since 2009 when ocean carriers began selling off their chassis to third-party owners.

IMCC has alleged OCEMA compels these third-party providers to undercharge ocean carriers for container haulage and make up the difference by overcharging truckers. An IMCC official asserted in 2020 that such “sweetheart contracts” between ocean carriers and chassis leasing companies had amounted to $1.8 billion in overcharges to intermodal truckers.

An official at the time with Direct ChassisLink Inc., one of the country’s largest container chassis equipment providers, had disputed IMCC’s claims, contending that a third to half of all container movements in the U.S. move on chassis owned or leased by trucking companies. He also described the current chassis arrangements as “market choice in action.”

Wirth’s 62-page decision notes that despite the initial finding in favor of IMCC, IMCC has not established that a “default chassis agreement” violates the Shipping Act or that having a default chassis provider is necessarily unreasonable when the arrangement does not prevent motor carriers from unilaterally using the chassis provider of their choice.

She pointed out that as OCEMA and the other respondents asserted in the proceedings, “chassis must be available and utilized to move containers off the port. The assignment of a default provider where a motor carrier does not have another preference may serve the interests of the shipping public by ensuring that a system is in place to efficiently assign chassis to containers and incentivizing the efficient flow of cargo.”

Parties in the case can file an appeal of the denial of all or part of the motions included in the decision, Wirth stated, with appeal briefs due in 22 days.


[Read from the original source.]