How Chassis Are Holding Up the Intermodal Freight Market

After a two-year shortage, freight capacity is no longer impossible to come by in intermodal and truckload for that matter. But while finding container space is now a reasonable ask, the intermodal freight market is still held back due to a different somewhat underreported, under the container, shortage: chassis. Chassis are a key piece of the intermodal puzzle. Also sometimes referred to as a container chassis or skeletal trailer, a chassis is a rubber-tired trailer under-frame on which a container is mounted for street or highway transport. Without them, intermodal containers are essentially stuck at the terminal as dray trucks need this purpose-built equipment to haul them. And it can be a compounding problem, as the more containers pile up dwelling at terminals, the more chassis are needed to get them moving.

Why is there a container chassis shortage?

A container chassis shortage has lasted beyond a container capacity shortage for a few reasons, including:

• Old chassis falling into disrepair
• New chassis production not keeping up
• Tariffs
• Chassis not returning to their point of origin (displacement)
• Rented chassis being held longer
• Drop deliveries

Following up a couple of these points, U.S. tariffs on chassis from China have been blamed for upwards of 40,000 new chassis not making it to North America. On the manufacturing side in general - no matter where it's occurring - chassis production has been slow with some blame falling on supply chain issues making components hard to come by. Chassis displacement is a common issue as well, creating a cycle of shortages as drivers move loads from one location to another, and take the chassis with them. This leaves behind fewer chassis at the point of origin. Additionally, as volume has been higher (though it is dying down a bit), drivers have held onto rented chassis well beyond the usual 3-5 days, and instead kept those rented chassis for 90 days or more in some cases. As most chassis are in rental pools, that means drivers, shippers and carriers that don't own chassis are at the mercy of these extended rentals.

Also related to chassis pools is a waitlist for drivers, shippers or carriers to join one - in some locations in the six month range currently. That wait list is just to have access to the chassis pool to be able to rent one when its available. Drop deliveries are an ongoing problem as well, as delivery recipients are often asking drivers to leave the container and chassis in their lot, rather than unloading the container on its own. This can be attributed to labor shortages as well, as these companies are often unable to unload quickly and need the flexibility to move the container around. But it means many chassis are simply sitting on lots, waiting for this unload to occur, and then waiting longer to be picked back up and returned to circulation. With these many factors behind the container chassis shortage, experts expect it to at least last into 2023 even as other supply chain struggles dissipate.

How to navigate the chassis shortage

There are a few key methods to navigate the chassis shortage. First, while chassis remain hard to come by, transloading is always a viable option. Rather than having loads held hostage in a container, transloading product from the container to something that can move immediately - like say a semi-trailer - can keep loads from getting stuck indefinitely. Next, with chassis rentals running long, pools can incentivize their faster return, either positively - with discounts for shorter rental periods, or negatively - with penalties for longer ones. Finally, and relatedly, to avoid being at the mercy of rented chassis, buy them. Purchasing chassis has another positive impact, putting more chassis into circulation either by buying new or because the seller will need a replacement.