What is a chassis? Why is it important? If you know the answers to these questions then you’re well on your way to understanding why it is such an important cog in the well oiled transportation machine.
What is a Chassis? Why is a Chassis important?
In short a chassis is the skeleton upon which rests the body of the container. Without a strong supporting skeleton frame, containers cannot be transported to and fro.
Why is it important? It is the main means of transporting containers over the highways and byways of the world getting a container from the port to its final destinations.
Now that we understand the chassis and its importance, we need to understand its importance in the broader macro shipping industry; not just the microcosm of land based shipping. At one point many years back the old school chassis system was that the shipping lines owned their chassis and would lease them to the trucking companies. However the economics of storage and maintenance of the hundreds of thousands of chassis’ simply was not an economically sound practice. As such, the shipping companies shifted gears and within the last decade most, if not all, of the shipping companies made a drastic move and sold all of their chassis’ to leasing companies. There are several chassis leasing company and three of the largest are TRAC Intermodal, Direct ChassisLink Inc., and Flexi-Van Leasing Inc. These three command the lion’s share of the chassis leasing business.
The ripple affect this had on the shipping industry is that these leasing companies are now able to charge whatever they want for the chassis to ensure they turn a substantial profit. This takes a big bite out of the profitability of the trucking companies, which in turn means higher costs for the manufacturer shipping their goods and ultimately the end consumer purchasing the products.
To combat the price gouging by the chassis leasing companies, some trucking companies formed cooperatives whereby several trucking companies purchased thousands upon thousands of chassis and leased it out to the cooperative members at much more reasonable prices. The cooperative ensures that all of the chassis are well maintained for its cooperative shareholders use.
Cooperative chassis leasing companies aside, where they can ensure availability for their members, this isn’t the case for those trucking companies forced to use one of the three aforementioned chassis leasing companies. Being wholly dependent on a leasing company forces you to play and live by their rules; which includes sitting and waiting for chassis to load your trucking haul to get it to its final destination. These delays may/do cause serious financial issues for all parties; the trucking company, the shipping company and the retailer/wholesaler who sells the products especially given that the holiday shipping season is upon us. This shipping rush will see leasing companies with less and less chassis available to handle the high season; late summer through Christmas.
Here at MTS we pride ourselves on being More Than Shipping. We pride ourselves in knowing the ever changing shipping landscape and being savvy enough to know how to get our customers/clients the needed transportation so that they continue to be profitable. We welcome our clients to call us to get to understand the intricacies of the land based shipping needs.