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TMC20: Michelin digital platform for trailer repair

This nice news release from Michelin showcases a new chassis repair program from Michelin.  Chassis repair has been an issue for years.  when chassis are rented there is no motivation to repair them.  The ocean carriers used to own a lot of chassis, to help get their intermodal containers on the road. But when owners of chassis became liable for damages caused by accidents from poorly repaired trailers, the ocean carriers sold them all.  Temporarily a few years ago, truckers were scrambling to find chassis.

Since then chassis ‘gray pools’ have been created at ports.  Truckers could pick up a proper chassis there, then return it when the trip was done.  Presumably maintenance of the trailers was to be done in the gray pool yards, while the trailers waited for a user.  But even that proved problematic. Unions associated with the ports wanted to be sure they did not lose jobs to outside, nonunion firms.  Ports in the Los Angeles area had work stoppages and court actions over this problem.  Other players in the gray pools were trailer leasing companies.

In Europe, chassis are owned by trucking companies, so there’s no question of who’s liable, both for accident damages and for repairs. There most truckers are employees of the trucking firms. In the US, most truckers, particularly in port drayage, are owner-operators, not employees, and so are only paid for the actual haulage they do. Here in the US, trucking firms won’t put up the capital to own too many chassis; they are already operating with low margins, and they haven’t had to before.

Chris and I have been writing about intermodal chassis for a number of years (An example) , and it is still a topic worth reviewing.  As one editor mentioned to us, intermodal chassis are “the gift that keeps on giving” for academics.  The current decline in imports via container on the West Coast of the US makes it a bit less interesting right now, because no one is having trouble finding chassis.

But keeping them in repair and road-worthy is a good place to cheat.  When a chassis breaks down on the road, the driver has no recourse but to fix it.  She is then paying for maintenance that should have been handled on the chassis pool yard. And it’s not economical for semi owners to also own a chassis unless they are committing to always do that kind of load handling.

In the chassis pools, it’s easy for a trucker to drop a marginal chassis, about to need repair; for instance a new tire set.   And it’s easy for the yard crew to send out a bad chassis because of an improperly performed inspection. But that is much less likely when the chassis are not needed instantly, as they were back a few years, and when there’s a highly qualified maintenance crew on duty.

I think it’s a great idea for Michelin to provide this service.  With the online tracking and dispatching, records are kept; the truck operator is assured that the unit is repaired to the TMC standard; and the records are electronically available, preventing issues over paperwork.  It should be a win if it isn’t too expensive relative to repairing in the yard.

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China cargo collapse

This interesting article shows how CargoMetrics is using data on ship lading, IoT readings, and vessel tracking to determine the amount of trade to and from China right now. the Coronavirus problem in China has essentially caused ocean commerce to and from China to plummet since Chinese New Year (CNY).

Bulk shipments such as iron ore and coal have dropped over 40% according to the article. Container shipments out of China have also dropped, probably due to the disruption of work schedules at Chinese manufacturers.  There are also issues involving quarantine of ships and cargos due to the virus.  The article is especially good when it uses graphs to show the changes.

Of course, this is a great promotion for Cargometrics’ capabilities.  I think one would have to look closer to discover how well Cargometrics’s data truly represents the entire range of activity, but the trends shown are certainly marked.

One very interesting fact the article gives is that petroleum imports have not dropped yet; they are up by a considerable amount. This may be due, so they say, to the longer transit times. The ships may have to lie to near Chinese ports when they cannot unload due to the quarantines or port handling issues.  The other shoe may yet fall even in the tanker business.


American Shipper 2020-02-22 074814     Greg Miller, Senior Editor   Thursday, February 20, 2020  via CargoMetrics data reveals depth of China cargo collapse – FreightWaves


Coronavirus delays create Container shortages in Chicago for DDGS

Coronavirus issues, particularly in China, are creating real problems for Dried Distiller Grains (DDGS) shipments. The lack of inbound containers from China means that there are not enough containers to ship DDGS out of the US.

DDGS is a byproduct of ethanol production, and in this part of the Midwest US, there is much ethanol production.  It is some of the most productive corn land in the US.  The DDGS are primarily used as animal feed.  China imports DDGS as feed for pork in the older times. I’m not sure how much they are importing right now due to the tariff fight and the pork disease issue in China. China’s pig production is just recovering from that tragedy a year or so ago.

The article gives an indication of container rates North Asia to West Coast US. They are trending down to attract business. blanked sailings are also a feature of the current environment in container shipping from China.

It’s a mess!

screenshot SandP Global Platts

via Container shortages in Chicago impact DDGS on coronavirus delays | S&P Global Platts