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American Trucking Associations’ Intermodal Motor Carriers Conference on Aug. 17 filed a federal lawsuit against the Ocean Carrier Equipment Management Association and 10 international ocean carriers, alleging they colluded to manipulate the intermodal chassis market at dozens of ports across the country.
The lawsuit, which came after months of negotiations, seeks $1.8 billion in damages. It was filed with the Federal Maritime Commission in Washington.
The action comes after the IMCC warned OCEMA in late May that it was considering legal action because of its continuing displeasure with the cost and condition of chassis at ports.
ATA’s Bill Sullivan
“For more than a decade, these foreign-owned companies have worked together to take advantage of hard-working American trucking companies,” ATA Executive Vice President for Advocacy Bill Sullivan said in a statement. “By denying truckers choice of equipment providers at port and inland locations, these unscrupulous companies have been forcing American fleets and American consumers to subsidize their costs to the tune of nearly $1.8 billion over the last three years alone.”
Since May, the IMCC and OCEMA have been engaged in on-and-off negotiations over the price, availability and condition of chassis. Then, IMCC sent OCEMA a cease and desist letter expressing its concerns and threatening legal action if an agreement was not reached.
The two sides discussed possible solutions, but sources said they were never able to find language that the IMCC, OCEMA, and the ocean carriers could agree upon, and negotiations broke down.
“This must end, and after several attempts to come to a mutually beneficial resolution, we are now asking the FMC to resolve it,” Sullivan said.
Jeffrey Lawrence, the executive director and general counsel for OCEMA, told Transport Topics that the organization will vigorously defend itself against the lawsuit, which he called misguided. He said most of the nation’s estimated 500,000 chassis are managed by several chassis leasing companies, chassis pools, and not the ocean carriers.
“Somebody must make sure there are enough chassis to meet the demand. The motor carriers have never taken on this responsibility,” Lawrence said. “But they are seeking through this complaint to use it for a business strategy purpose, to improve their market position.”
In the complaint, IMCC charges OCEMA is denying trucking companies choice when leasing chassis, and forcing unjust and unreasonable prices upon trucking companies.
“By denying motor carriers their choice of chassis provider to haul goods in and out of ports, OCEMA’s overseas members have held U.S. motor carriers hostage and forced them to subsidize the shipping lines,” ATA Chairman Randy Guillot, also president of Triple G Express Inc. and Southeastern Motor Freight Inc., said. “So far, OCEMA has ignored any of our attempts to reach a fair and equitable arrangement, but we believe they’ll have less success ignoring the FMC.”
At most major ports, ocean shipping companies have historically controlled the chassis leasing business under the Uniform Intermodal Interchange & Facilities Access Agreement (UIIA), which is administered by a 10-member group of industry representatives. Last October, the IMCC formed a subcommittee to begin studying the issue of what it calls “chassis choice.” Committee members said one entity controlling all of the chassis at a facility results in a monopoly situation, which keeps prices artificially high.
In the lawsuit, the IMCC outlined what it alleges is a number of ongoing violations of the Shipping Act of 1984, and it is seeking a declaratory judgment against the shipping companies and OCEMA.
In May, the IMCC cited as an example the Port of Charleston and the Port of Savannah, where trucking companies at those ports and others pay upwards of $27 a day for a chassis, while ocean carriers’ costs are estimated to be 50% of that amount.
Trucks arrive at the Port of Charleston, South Carolina. (South Carolina Ports Authority)
At most of the major ports, trucking companies are told which chassis they can use and what the rates will be. The shipping companies have historically had control of the business under the UIIA.
For years, ocean carriers owned and leased chassis and other intermodal equipment to trucking companies so truck drivers could move ocean containers from the ports to inland locations, then return them to the ports when the boxes were empty. About 10 years ago, ocean carriers began working with third-party leasing companies to reduce their cost of managing and owning containers.
“In about 80% of the locations in the United States, OCEMA has nothing to do with pooling arrangements. Those 80% are operated by other parties, basically the chassis leasing companies. So, the IMCC approach is puzzling, and it raises questions about what their real objective is,” said Lawrence. “We will oppose this lawsuit vigorously.”
Trucking companies also have complained about the quality of the chassis they lease, especially when it comes to tires, brakes and lighting. To address those concerns, some chassis distributors have upgraded their fleets by replacing older chassis, or refurbishing chassis and adding radial tires, disc brakes and LED lighting.
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