Relief is Coming Soon for the U.S. Chassis Market That Has Seen Shortages
U.S. chassis supply shortages have been continuous for the past year or so. In turn, this issue has been a significant factor in port and rail congestion. But now, many are hopeful that some relief is coming soon for the U.S. Chassis Market.
Now, part of the reason for this issue, is shippers are holding onto chassis longer than they did before the pandemic, which has put more pressure on equipment manufacturers to produce more units off the assembly line quicker.
Equipment Coming for the Chassis Market
One way additional supply of chassis is being sourced is through refurbishment. Bernard Vaughan, a longtime U.S. chassis executive, told the Journal of Commerce (JOC), that “companies are making major, major investments in refurbishing old chassis.” He mentions that if someone doesn’t have any experience in this area, they would have no idea that the chassis is refurbished.
Another way that has created additional supply is trailer manufacturers turning production lines into chassis output. Vaughan also mentions that many in the trailer manufacturer industry, who either left the business or avoided it, are now getting back into the building of creating chassis, mainly because of the surging demand for it and the pricing issues the shortage has caused.
Steady Improvement is Forecasted, Street Dwell Remains an Issue
Intermodal equipment providers (IEPs) are feeling confident that the industry will be able to meet the chassis needs of their customers sometime near in 2023.
As the JOC reports, many IEPs say they will create a business model for each of their customers to best fit their needs after having to deal with the significantly tight chassis market. Data has shown that many of the customers of IEPs have been receiving 20 to 30 percent less chassis than they need to have.
Street dwell continues to remain an issue, as lots of chassis dwell times at warehouses have been filled to capacity. When that happens, it causes laden import containers to idle on chassis for two to three times longer than they should, the JOC.
While things are looking up regarding the tightness of the chassis supply, it will take some time to recover fully.
Dave Manning, CEO of the North American Chassis Pool Cooperative says it till take longer than just a few months for many to dig out of the current demand. He continued to say, “that demand is going to continue to be high for us and that it is going to be late 2023 before we catch up with the backlog.”
So, it definitely sounds like, at least from some point of views, that clearing the backlog of these chassis’ shortages, will take time. But it also tells us that things are looking more optimistic, and that steady improvement is in the future.
As always, if you would like more information regarding this topic, contact our team at InterlogUSA and we will be happy to assist you on any questions or comments you may have! In addition, we have our weekly market updates that can provide you with relevant freight news, updates, developments across the industry, and more.