Insights - April 2016 - (Page 5)

Gate Control - Information Is King Last month, Insights dealt with issues around maintenance and roadability and how they can affect productivity, even contributing to delays at the gate. Condition is not the only factor governing equipment supply that can affect terminal productivity, which is often measured at the gate. When ocean carriers owned and managed containers and chassis, the two pieces of equipment were paired, and at the gate, the container was king. If the motor carrier had a valid agreement with the steamship line to haul the container, the driver was cleared to outgate. There are many more stakeholders in the cycle of intermodal transportation today, including chassis lessors, chassis pools, facility operators, and even beneficial cargo owners. Information is now what matters. In this new era, IANA has a working group addressing one of the major issues - gate control - which involves validating a motor carrier for both the chassis and container. This work will be profiled at a Business Meeting roundtable on May 4. Gate Control's Past, Present and Future To understand the issues requires a quick look at the past, the present and the immediate future relative to containers and chassis. "A decade ago or more, it was the steamship lines that provided the chassis for the inland movement of their boxes," says Gerry Bisaillon, general director of premium operations for Union Pacific Railroad. "For a facility operator, that worked fine, other than the fact you needed multiple flavors of chassis to supply for all of the different steamship lines," he continues, referring to the fact the facility had to have a chassis from the same steamship line to match with its container. "For the past 10 years, the box ruled," says Tom Martucci, vice president management information systems for Consolidated Chassis Management, a chassis pool operator. "It was relatively easy. Whoever's box it was, you look at the agreement status with the motor carrier and that dictates whether or not there's approval or non-approval for the carrier to exit with the container and chassis." For most of that time, there was only one agreement, the one covering the container. "In order to run our businesses properly, we have to have some form of control at the gates as to who gets our equipment." - Alan Messing, senior vice president of TRAC Intermodal Over time things started to change. Ocean carriers didn't want to manage the chassis, then they decided they didn't want to own and maintain chassis. "The steamship lines started by getting into pools and cooperatives," says Bisaillon. They still owned the chassis, but the pools managed them. "Many of the pools were formed under Ocean Carrier Equipment Management Association where [ocean carriers] contribute their assets to the pool," he continues. "That worked until they went the next step and said they didn't want to provide chassis anymore," recalls Bisaillon. "They worked on exiting owning and operating chassis and put [ownership and maintenance] over towards the pools and divested of those assets," he says. Two Pieces of Equipment Though it was always true there were two pieces of equipment arriving at the gate, there were now typically two separate agreements that needed to be evaluated and taken into consideration when providing a gate control solution, according to Martucci. "What we're trying to achieve is basically the same thing container owners have for containers," says Alan Messing, senior vice president for TRAC Intermodal, explaining that the UIIA will notify the terminals whether the container provider has an agreement in place with a certain trucker. "Today, that doesn't exist for a chassis. As long as the container's approved, the chassis goes out regardless of whether the chassis provider is doing business with that motor carrier." This becomes a business issue. If the motor carrier doesn't have an agreement with the chassis provider, there is no clear avenue for equipment providers to collect their charges. "The pool, whether it is CCM or any other pool, provides chassis. They have to collect for per diem and damages from those that use them," adds Bisaillon of UP, which he notes, is not just a terminal operator but also a chassis provider for over 50,000 chassis. "What we have to look at is, what is best for the overarching supply chain." - Tom Martucci, vice president of management information systems for Consolidated Chassis Management "We need a clear identification of who has the right to limit the use of a chassis," says Martucci. "Is this shipment actually moving under the chassis provider's agreement or is it moving under the ocean carrier's interchange? The commercial terms of the contract [related to the chassis] are not visible to the entities that are trying to administer gate control." Without this visibility, the terminal operator can't stop a motor carrier April 2016 | Intermodal Insights 5

Table of Contents for the Digital Edition of Insights - April 2016

Insights - April 2016
FMCSA Proposes New “High Risk” Definition
ITC Makes Initial Affirmative Determination
New CDL Training Requirements Proposed
IANA, 25 Years and Counting
IANA Welcomes New Director of Education
New Committee Leadership
Sustainability News
Gate Control – Information Is King
State Legislative Update
Freight Reports
Port News
People in the News
2016 Sponsors
In Brief
Welcome New Members
Intermodal Calendar

Insights - April 2016