THE US Federal Maritime Commission (FMC) has been told by container lines that it has no authority to adjudicate an American Trucking Associations (ATA) complaint that ocean carriers and chassis managers are restricting choice of chassis.
The ATA said the restricting of chassis choice has caused damage over a three-year period and violates the Shipping Act of 1984, which forbids entities from engaging in 'unjust and unreasonable business methods'.
In a 24-page response, the 'respondents' to the ATA's complaint - 11 ocean carriers, the Ocean Equipment Management Association (OCEMA), and Consolidated Chassis Management (CCM) - told the FMC that 'vague, general descriptions of alleged conduct' do not amount to a legitimate case.
ATA vice president Bill Sullivan said it is 'unfair and unreasonable' for chassis providers to offer equipment at below cost to some and above cost to others, or to 'unfairly foist an unreasonably high cost in a narrow segment of business'.
Chassis providers denied they are losing money on large accounts or subsidising losses through daily rental rates, pointing out that many businesses give favourable rates for high-volume, repeat customers.
The respondents said the FMC cannot adjudicate domestic transportation issues. Merchant haulage trucking is domestic, they argued, because the ocean carrier's responsibility only extends from origin port to destination port.
'These moves are not the inland portion of a move covered by [an] international through bill of lading, but rather occur before or after the ocean transportation provided by the ocean carrier,' the response read. 'This is precisely the type of dispute over which the FMC has previously held that it had no jurisdiction.'
Lawyers for the ocean carriers, OCEMA, and CCM further argued that only cargo interests - ie, beneficial cargo owners (BCOs) - can bring a dispute under the clause of the Shipping Act.
'[Because] motor carriers are not cargo interests, it is clear that motor carriers cannot bring a claim,' the response read.
The question is whether shippers care, because chassis costs are only a small portion of an invoice. The BCOs are a key stakeholder, however, because they pay for the chassis and may have an economic incentive to maintain the status quo, reports IHS Media.
But Mr Sullivan said it is premature to seek BCO support. 'If we thought now was the time for coalition, we would be circling the wagons and talking with all our shipper partners, but right now, we think this is between us and the ocean shipping lines,' he said.
Two trucking companies, speaking on the condition of anonymity, said that they are not harmed in any way by the behaviour alleged in the ATA complaint. Trucking companies charge between US$30 and $40 per day on a chassis that costs them $22 to $29 per day. The ATA defended this markup as necessary because trucking companies audit invoices and pay to handle breakdowns on the roadway owing to bad equipment.
The ATA said its trucking members lose money even after the markups, while other sources maintain that trucking companies make money off the daily rental chassis.
Not all trucking companies agree with ATA's position. Three Texas truckers who asked not to be identified said the quality of cooperative pool chassis run by CCM was poor. ATA's push for open choice in which truckers can use any chassis for any container would closely resemble a cooperative pool without box rules.
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The ATA said the restricting of chassis choice has caused damage over a three-year period and violates the Shipping Act of 1984, which forbids entities from engaging in 'unjust and unreasonable business methods'.
In a 24-page response, the 'respondents' to the ATA's complaint - 11 ocean carriers, the Ocean Equipment Management Association (OCEMA), and Consolidated Chassis Management (CCM) - told the FMC that 'vague, general descriptions of alleged conduct' do not amount to a legitimate case.
ATA vice president Bill Sullivan said it is 'unfair and unreasonable' for chassis providers to offer equipment at below cost to some and above cost to others, or to 'unfairly foist an unreasonably high cost in a narrow segment of business'.
Chassis providers denied they are losing money on large accounts or subsidising losses through daily rental rates, pointing out that many businesses give favourable rates for high-volume, repeat customers.
The respondents said the FMC cannot adjudicate domestic transportation issues. Merchant haulage trucking is domestic, they argued, because the ocean carrier's responsibility only extends from origin port to destination port.
'These moves are not the inland portion of a move covered by [an] international through bill of lading, but rather occur before or after the ocean transportation provided by the ocean carrier,' the response read. 'This is precisely the type of dispute over which the FMC has previously held that it had no jurisdiction.'
Lawyers for the ocean carriers, OCEMA, and CCM further argued that only cargo interests - ie, beneficial cargo owners (BCOs) - can bring a dispute under the clause of the Shipping Act.
'[Because] motor carriers are not cargo interests, it is clear that motor carriers cannot bring a claim,' the response read.
The question is whether shippers care, because chassis costs are only a small portion of an invoice. The BCOs are a key stakeholder, however, because they pay for the chassis and may have an economic incentive to maintain the status quo, reports IHS Media.
But Mr Sullivan said it is premature to seek BCO support. 'If we thought now was the time for coalition, we would be circling the wagons and talking with all our shipper partners, but right now, we think this is between us and the ocean shipping lines,' he said.
Two trucking companies, speaking on the condition of anonymity, said that they are not harmed in any way by the behaviour alleged in the ATA complaint. Trucking companies charge between US$30 and $40 per day on a chassis that costs them $22 to $29 per day. The ATA defended this markup as necessary because trucking companies audit invoices and pay to handle breakdowns on the roadway owing to bad equipment.
The ATA said its trucking members lose money even after the markups, while other sources maintain that trucking companies make money off the daily rental chassis.
Not all trucking companies agree with ATA's position. Three Texas truckers who asked not to be identified said the quality of cooperative pool chassis run by CCM was poor. ATA's push for open choice in which truckers can use any chassis for any container would closely resemble a cooperative pool without box rules.
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