Negotiations between the International Longshore and Warehouse Union, or ILWU, and the Pacific Maritime Association, or PMA, have kept the Port of Long Beach along with several other ports backed up since last summer. Among the labor issues fueling the dispute, chassis management proved the most divisive.
When negotiations began, chassis shortages and port congestion often resulted from truckers dropping off a container at a terminal, and then dropping off a chassis at a separate terminal to maintain a chassis leasing agreement. Additional congestion resulted from the PMA requiring a 10-point chassis check system instead of a 5-point check system. Finally, many chassis were flagged as defective that in fact still functioned properly. Chassis shortage and inefficiency results from a history of recently changing management.
Beginning in the 1960s, U.S. ocean carriers managed and maintained chassis. The management however, proved expensive. During the American Recession, shipping companies lost millions of dollars on chassis maintenance. They sold their chassis ownership to equipment leasing companies. The new chassis management did not all have an obligation to employ ILWU workers for chassis maintenance and repair work. The development threatened hundreds of ILWU chassis maintenance and repair related jobs. The resulting chassis landscape was one of inefficiency, rattled alliances and confusion.
A Dynamic Debate
The multitude of vying interests and alliances made the chassis debate heated. The ILWU made three strict requests that nearly halted progress. They wanted to inspect every chassis before it left the terminal. They wanted jurisdiction over those terminals. Finally, the ILWU wanted jurisdiction over any off-dock sites operated by the chassis leasing companies. Their orders were met with logistical difficulties. Trucking companies associated with the PMA that operate chassis management threatened to sue the ILWU if their chassis were stopped at any Long Beach terminal. Additionally, the International Association of Machinists, or the IAM threatened to file a suit against the PMA and the ILWU if any attempt was made to break the IAM’s long-standing contracts with terminal operators.
Chassis Grey Pool Proposal
The chassis grey pool proposal ended the disagreement with a solution that helps workers, and that promotes efficiency in the industry. The agreement makes interoperability of chassis possible by stipulating that chassis can be picked up and returned to 11 of the 13 terminals on the Los Angeles and Long Beach port. The program will diminish congestion and increase the availability of chassis. Technology is in development that tracks the location of chassis, alerts users as to where the equipment is most needed, and flags chassis that are out of service. The majority of chassis providers will participate, including DCLI, TRAC Intermodal, Flexi-Van and SSA Marine. The program will engage roughly 95,000 chassis, or 80% of all the chassis in service at the ports of Long Beach and Los Angeles.
Stay tuned for updates on the program!
For detailed information, maps and contact information for the ports of Los Angeles and Long Beach, be sure to download a free copy of our Comprehensive Port Service Guide.