Abstract

The chassis used to transport containers in California are not distributed in an efficient market. The chassis used by the trucking firms are often provided by marine terminal operators. The controversial relationship between the chassis users and the chassis providers has become more apparent with the recent passage of SB 1507 in California. "Roadability" refers to each chassis's safety. SB 1507 transfers the liability for the roadability of chassis from the users, the trucking industry, to the providers, the marine terminal operators.

Interviews have suggested that marine terminal operators would eagerly transfer ownership of the chassis to the trucking firms. Trucking firms resist ownership of the chassis, suggesting that they have no facilities a la the marine terminals at which the chassis could be stored and maintained. Labor unions have suggested that a transfer could create new employment opportunities.

With this proposed research, we would first examine previous arrangements and the reasons for their creation and ultimate dissolution. We would then examine the institutional issues that describe today's environment. We would then construct approximations of the costs and benefits that would result from different distributional environments. The different environments could range from the present system, at which chassis are distributed at individual marine terminals, to a central distribution system. Intermediate solutions could represent multiple public distribution centers or perhaps a separation of the distribution and inspection operations. An efficient system could save operating costs while, more importantly, reducing the number of failures that lead to incidents on California's roadways

Problem Statement

The marine terminals and the trucking industry within California have found their market to be changing. For years, the marine terminals have been the owners and distributors of the chassis used by the trucking firms to transport containers to/from the marine terminals. Legislation recently passed in California, SB 1507, has transferred the liability for the "roadability" of chassis from the users of the chassis to the providers of the chassis. The "roadability" of a chassis relates to the likelihood of that chassis causing an accident or delay when used in service. That is, responsibility has been passed from the trucking firms to the marine terminals. With the passage of SB 1507, California became the fifth state to place the burden of equipment safety on the providers of the equipment. Other states that passed legislation prior to California were South Carolina, Illinois, Louisiana, and Texas. Speculation is that the successful passage of legislation in each state assembly makes the Teamsters and other unions more eager to push for change in other places.

North America is perhaps the only location in which the chassis are owned by the marine terminal operators rather than the trucking firms. The North American liner shipping industry represents over four million containers, and over 700,000 chassis are used to facilitate the movement of containers within the United States. Apparently marine terminal industry representatives have expressed the desire to transfer ownership of the chassis, for a miniscule transfer fee, to remove themselves from the liability associated with the chassis. Trucking firms have declined ownership of the chassis, claiming that they do not have the physical space that would be required for storage and distribution of the chassis. Because of the congestionpresent within marine terminals, apparent from the expansion of terminals throughout California, one might suggest that the transfer of chassis storage would allow for additional storage space within terminals. In addition, the conversion of marine terminal space from wheeled operations to stacked operations could allow for a denser throughput of containers at marine.

In this research, we will develop an initial understanding of the role of chassis inspection in the trucking industry within California. This understanding will come from a survey of the industry history as well as an examination of the institutional issues that shape today's market. We will construct crude approximations of the economic forces that shape this aspect of the trucking industry and present findings that could lead to more detailed studies and, perhaps, more efficient (de)regulation of the industry within California.