After taking over the chassis market, TRAC Intermodal is pooling equipment to make the pick-up and drop-off experiences more efficient for customers.
By Tim O’Connor
When people think of cargo transportation they think about big ships pulling into port, railroads crossing the countryside and semi-trucks navigating spaghetti-like highway interchanges. But between those areas lies the connective fabric that links the transportation modes together: the chassis that containers ride on as they move from ship to rail to final destination. As the cargo industry changes, TRAC Intermodal has become the largest chassis pool manager and chassis supplier in North America, making it an invaluable part of the supply chain.
TRAC Intermodal traces its history back to 1968, when its precursor, Interpool Limited, began leasing dry freight containers to shipping lines. From there chassis were added to the portfolio and then in 2007, Fortress Investment Group acquired the company. After the acquisition, the container business was split off from the chassis business and a new company called Seacastle Chassis was formed, which became TRAC Intermodal three years later.
The name change coincided with major shifts in the shipping industry. Around the same time, the world’s ocean carriers began exiting the chassis market. “In our industry, prior to 2011, the ocean carriers in our country would typically provide the chassis as part of the service they sold moving a customer’s goods from their ship to the customers distribution centers,” CEO Keith Lovetro says. Lovetro also indicated, “today the steamship lines no longer want to provide chassis as part of their services. Moving away from chassis provisioning is an evolving change that has been going on for the past five years and will likely continue for another two to three years.”
The rising cost of supplying and maintaining chassis fleets forced ocean carriers out of that market. The country’s three primary chassis solutions providers, including TRAC Intermodal, bought up the ocean carriers’ chassis assets, giving TRAC the largest chassis fleet in the United States. TRAC Intermodal’s COO, Val Noel, says, “TRAC won its fair share of those steamship line chassis acquisitions between 2012 and 2015.”
“Today, TRAC operates in over 600 Marine locations and 160 Domestic locations and has 22 offices and eight service centers across the country. The company has over 310,000 chassis under management and approximately 275,000 chassis in its active fleet, which is spilt between Marine chassis and Domestic chassis,” Lovetro says.
The company buys its chassis from manufacturers such as New Jersey-based Hercules Enterprises, which produces the 20- and 40-foot-long versions of the TRAC Titan chassis. Hercules is located near TRAC’s New Jersey facilities, which has made them a reliable and accommodating supplier. “TRAC has expanded our fleet, operating locations and employees’ skill profiles to allow us to provide our customers with a high-quality service that they require,” Lovetro says.
Today, the intermodal transportation market has three main customer groups: railroads, steamship lines and motor carriers, according to TRAC. However, two other groups are emerging; the beneficial cargo owners (BCO) such as Walmart, The Home Depot, Target Stores, etc. and NVOCC’s which are non-vessel owner operators.
Part of the challenge of the motor carrier piece of the business is the limited longevity of some of these companies. Smaller motor carriers tend to have short life spans, so it can be difficult to keep track of them. To solve this issue, TRAC developed TRAC Connect, a program that makes chassis available on a short or medium-term basis to carriers that specialize in intermodal drayage. By managing bookings and billing, TRAC Connect is designed to make it easier for motor carriers to do business with the company.
Although steamship lines began divesting themselves of chassis in 2011, some continue to pay for the chassis as part of a door-to-door service required to maintain select customers. Because of that, progress in evolving the steamship lines out of chassis provisioning has not moved as quickly as TRAC had hoped nor has the full beneficial impact been realized in the industry.
Still, TRAC continues to work at helping the industry evolve. TRAC is working with other chassis providers to create interoperable pools in markets such as the Port of Los Angeles/Long Beach. The setup is a step away from the old business model, which had truckers get in line for a chassis each time they picked up a container for delivery. The drivers would then drop off the shipment, return the chassis and go through the process again. Those drop-offs and pick-ups occurred at each marine terminal where the steamships docked. If a shortage occurred at one of the marine terminals, it could create a wave of delays for the rest of the port.
The interoperability of the pool simplifies the process by combining the assets of all chassis operators. Now, truckers can obtain chassis from any terminal without worrying about whether it serves a specific shipping line. The setup allows for greater flexibility and efficiency, while minimizing driver down time and supply chain complexity.
In addition to the pool serving the Port of Los Angeles/Long Beach, TRAC also established an interoperable pool in the Pacific Northwest. The TRAC Pacific Northwest Pool (TPNP) services both the Ports of Seattle and Tacoma.
With chassis leasers sharing their assets, it becomes even more important for TRAC to find ways to distinguish itself from competitors. The quality of TRAC’s chassis is the primary way the company creates a competitive advantage for itself. The use of radial tires, for example, is a solution found on many of its premium chassis. “To ensure our customers have the ability to choose the right type of equipment for their individual jobs, we’ve opened dozens of Private Pool locations across the country called TRAC Private Chassis Pools (TPCP),” Noel says.
“These pools carry a variety of premium equipment and are designed to get a driver in and out with a chassis in less than 20 minutes,” Lovetro says.
“It’s another effort on our part to give the trucking community a quality piece of equipment,” Noel explains. “Only the highest performance chassis are part of the TPCP, ensuring customers have access to reliable and ready equipment.”
“To continuously improve the quality of our fleet, two years ago we started a refurbishment program,” Lovetro says. “To refurbish a chassis we take a run of fleet unit that has exceeded its economic life. We strip it down to a bare frame, then its shot blasted and re-painted TRAC Blue. All new electrical harnesses and air systems are then installed along with new tires and wheels. After we’re done, it looks and operates like a new chassis.”
TRAC continues to support its equipment once it hits the road. When a chassis breaks down on the road, the truck driver can call TRAC Interstar and a technician and mobile repair truck are dispatched immediately. The fast repairs mean the trucker can resume their delivery with minimal disruption to the supply chain. “In the event one of our units fails on the road, we now provide to our customers a 24/7/365 solution that they can access from their phone to get service immediately,” Noel says.
TRAC’s quality efforts are further bolstered by its eight service centers, which are located near ports and key rail hubs. Those service centers are where truck drivers can pick-up the chassis and are essentially the connector between steamships and the rest of the transportation network. Because only TRAC employees are working on the chassis while at the service center, the company is able to provide high quality equipment with more dedicated maintenance.
The commitment to quality and service aligns with TRAC’s other core values. When working with customers, TRAC strives to be customer centric, offer high service quality, be safety driven, have a high sense of urgency, be nimble, be respectful and always do the right thing. Adherence to those core values is building TRAC’s reputation in the industry. In August, the Association of Bi-State Motor Carriers honored TRAC with the 2016 Award for Best Overall Chassis Providers in the Port of New York and New Jersey.
“I’m most proud of the TRAC employees and all of the tremendous things they have accomplished,” Lovetro says. “Over the past five years, we’ve almost doubled the size of the company, we significantly changed our business model and we’ve worked through the dynamics of the evolving marine intermodal industry. None of these are simple tasks and the TRAC employees have maintained an outstanding attitude and commitment to our customers and the industry.”
“We operate in a way that minimizes risk to our customers, helps improve our customers’ efficiency and ensures chassis reliability and roadability during the first and last mile of freight transportation,” the company says.