Unprecedented container volumes associated with the COVID pandemic continue to disrupt supply chain operations across the country and grab headlines.
For example, Port Houston reported its highest ever level of container volumes in both October and November. Given this, you may have missed the momentous change that the chassis provisioning model in the Gulf underwent just a little over a year ago. The shift away from a third-party managed gray pool model to competitive models like the Direct ChassisLink Pools (DCLP) has delivered for truckers operating in the Gulf providing improved equipment quality, stable pricing, and more reliable chassis availability despite the record volumes. Competitive pools are meeting customers’ needs while supporting the region’s recovery.
A major benefit of exiting gray pools is that chassis providers get to make decisions about their own equipment, including investing in quality upgrades and other improvements to units made available in their own pools. To that end, after exiting the Gulf Consolidated Chassis Pool (GCCP) in 2020, DCLI added 1,000 new chassis to its DCLP pool in support of shippers and their drayage motor carriers throughout the Gulf. “Our decision to exit the GCCP gray pool in early 2020 provided us with an opportunity to upgrade our equipment,” said Ryan Houfek, DCLI’s chief commercial officer. “Making that investment enabled us to better serve truckers across the region.”
Another equipment improvement has had a positive impact on the quality of chassis operating in the Gulf market – conversion from bias-ply to radial tires. IEPs like DCLI have invested millions of dollars replacing these older tires with radials, which are much more durable and better suited for the hot and humid weather truckers encounter in the Gulf. DCLI expects to convert 100% of its chassis operating in the Gulf Port markets to radial tires by mid-2021. The company is ahead of schedule in New Orleans, which reached 100% conversion in January, a milestone welcomed by local truckers. “By switching from bias-ply tires to radial tires we have noticed considerably less service calls on the tires since the tire upgrades were put in place,” said Joseph Landweline, owner and president of Landwerlin Trucking. “(These upgrades have) allowed us to run our business more efficiently with the end result being more profitable.”
Competitive chassis pools also enable IEPs to better manage chassis supply, in particular when the supply chain is stressed as it has been with the freight volume increases that have persisted throughout the second half of 2020 and into early 2021. Equipment managers work directly with customers to evaluate volume forecasts then use that data to reposition chassis across the nationwide network to ensure that chassis are available for moves where they are most needed.
“When confined to a third-party managed pool, we lose the ability to manage the condition and location of our equipment to best serve our customers’ needs,” said Ron Joseph, DCLI’s chief operating officer and EVP. “Under the DCLP model, our fleet team has the flexibility to manage the quality of the equipment and see where our chassis are needed most then pull the levers to reposition chassis between markets as container volumes dictate.”
All of these factors make the job of supplying chassis more efficient and cost effective for IEPs like DCLI. This fact is evidenced in the daily rates that truckers pay for the use of pool chassis. While third-party managed gray pools have some of the highest daily rates in the country, DCLI’s market rate in the Gulf remains low and has held constant since 2019. “Because we manage the pool directly,” said Houfek, “we have better control over the equipment and lower operating costs, making this type of operating model beneficial for both DCLI and our customers.”
While others in the industry promote “open choice” under the third-party managed pool model, the truth is that only the competitive pool model gives truckers a true choice among equipment providers. With our ongoing focus on equipment safety, quality, and availability in our DCLP pools, DCLI is committed to improving the way that chassis operate in the Gulf and being motor carriers’ chassis partner of choice.