New Chassis Pool Co-Op Launches in Memphis

By Michael Waddell

The trucker-formed North American Chassis Pool Cooperative – the first of its kind – is launching its pilot program in Memphis this year.

IMC Cos.’ Memphis Depot on Holmes Road near Hickory Hill is filled with shipping containers and chassis, the wheeled trailers used to transport the containers.

(Photo Courtesy of IMC Cos.)

The announcement follows the U.S. Surface Transportation Board recently approving the cooperative’s chassis pooling agreement, which will allow it to acquire and share chassis for intermodal freight transportation.

Chassis are the wheeled trailers used to transport shipping containers. When a train comes into Memphis with 300 to 400 containers at a time, those containers are put onto chassis, which are stored at the rail yards and have been primarily owned by the ocean carriers until recently.

A few years ago the ocean carriers decided that they wanted to stop owning chassis and began selling them, typically to big leasing companies like Flexivan and TRAC Lease.

“We recognized that the ocean carriers selling their chassis to leasing companies was going to put us in a difficult position because we were going to be forced to use chassis at prices that they deemed profitable for them,” said Mark George, chairman of Memphis-based Intermodal Cartage Company, the only local company in the new co-op.

“Furthermore, the chassis are old, and they create a lot of issues for motor carriers because the average age of chassis fleet is about 18 years old.”

The NACPC, a nonprofit organization, was formed to create a chassis supply system that can be rolled out nationwide to support the U.S. intermodal network, maintain a modernized chassis fleet and create a transparent set of terms of use that benefit all users.

The cooperative is comprised of 11 major motor carriers, all members of the American Trucking Association, which want to play an active role in chassis provisioning.

“We just want to have some choices,” George said. “We want to be able to buy and own some of our own chassis as motor carriers and have them in gray chassis pools at the railroads and ports.”

With new Department of Transportation regulations that, among other things, hold equipment owners responsible for maintenance violations, ocean carriers decided that they did not need to own chassis anymore in the U.S.

Outside the U.S. ocean carriers do not provide chassis for inland transportation from the ports; typically the motor carriers do.

So several years ago the ocean carriers formed the Ocean Carrier Equipment Management Association, a U.S.-based association of 19 major ocean common carriers, and began collectively putting all their chassis into large pools throughout the nation.

NACPC chose Memphis because the city is one of the smaller chassis pools in the U.S., and it has more ocean carrier-owned chassis than most other pools.

Memphis is one five major chassis pools in the U.S., and there are about 15,000 chassis available at rail yards in the area to serve the tri-state market. Overall, there are about 500,000 chassis in the U.S.

“Since the ocean carriers want to disengage the ownership of their chassis, we have a higher likelihood of buying chassis here than we do in some of the other locations where the leasing companies own the chassis and will be more resistant to selling them to us,” George said.

NACPC is completing its first acquisition of 2,000 chassis from a large worldwide ocean carrier.

George envisions a more modernized chassis fleet, which will include refurbishments like new radial tires, auto-inflation devices and new braking and lighting systems.

And having control of the common equipment pool, or “gray pool,” gives the motor carriers choices and leverage to work out fair market pricing.

“We are trying to prove that our model works in Memphis, and then aggressively expand it into other pools throughout the U.S.,” George said. “Our co-op is unique because it is motor carriers that are cooperating together to create this nonprofit to provide the best chassis we can to our shippers who are importing and exporting containers from all over the world.”