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Chassis and the Export Supply Chain
Jeffrey F. Lawrence, Executive DirectorOcean Carrier Equipment Management Association (OCEMA)
A G TC 3 1 S T A N N UA L M E E T I N G
TA C O M A , WA S H I N G TO N
J U N E 1 3 , 2 0 1 9
What is OCEMA?
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• Lead ocean carrier organization for U.S. intermodal and equipment issues
• Formed in April 2000
• 11 international ocean containership carriers are members
• OCEMA's activities are authorized under the U.S. Shipping Act
Consolidated Chassis Management, LLC• OCEMA formed CCM as a subsidiary in 2005 to function as a chassis
management utility
• Formed in response to industry concerns with dwindling rail/marine terminal space, congestion, inefficient equipment usage, and safety
• CCM operates 6 regional pools at over 200 locations, with 120,000 chassis under management
• All chassis in the pools are regional and “gray” (interoperable). They are operated on an “at cost” basis.
• Open on equal terms to contributors of chassis from all industry segments (Carrier, Trucker, Rental/Leasing Companies, Shippers, etc.)
• Priority is on service and safety -- supporting the supply chain, not testing stress points to maximize utilization
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What We Said Last Time We Were Here…
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At the 24th Annual AgTC meeting in 2012, OCEMA’s view was:• Chassis are not going away, but the status quo was not viable
• Significant changes/operational impacts would occur
• Varying shipper-carrier-terminal-regional operational needs meant current solution working for everyone was not a given
• Several models, then in effect would fall away and new models, probably differing by region, would prevail… and the likely surviving models would be:
Co-op/Gray pools
Proprietary “Rental” pools
• Because changes were coming, we urged shippers, carriers and truckers to seriously discuss chassis needs—i.e, collaboration and cooperation
OCEMA’s View on the Current Situation• The problems: Loss of single pool efficiencies, service failures, high costs for
most stakeholders, chassis hoarding and dislocations. Simply put, there has been an overall regression in “chassis resilience”
• The answer: Regional Gray Pools
Tested over ten years/millions of moves – they work!
Centralized inventory control, repositioning, and forecasting
All chassis interchangeable
MC efficiencies
Service, safety, and cost effectiveness first
Pool is “open” to any contributor, ensuring low barriers to entry, innovation, competition
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Need for Industry Collaboration• Antitrust laws have protected our economy
against a variety of anticompetitive practices
• In some cases uncertainty as to antitrust limitations has inhibited collaboration, resulting in lost opportunities to achieve efficiencies, cost savings, service improvements
• There are ways forward to collaborate legally to achieve needed progress
• The Memphis Supply Chain Innovation Team is a bold effort to collaborate on an issue crying out for cooperation
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OCEMA stands ready to work with service partners in a proactive, collaborative mode to build a more resilient supply chain in the U.S.
How Do We Get to a Solution?
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Challenges:Reassembling single regional structures to achieve interoperability
Ensuring viable economic model for all stakeholders
Reduce off-terminal dwell time and manage free time effectively
Equipment upgrades (lights, brakes, tires) and investment
Improve forecasting capabilities
Increased use of appointment systems
Encourage grounded facilities with off dock solutions, wherever possible
The only realistic way forward to address these issues is the use of regional gray chassis pools
Thank you.
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“What if, and I know this sounds radical, we collaborated to find a solution.”