Chassis Supply in Chicago, IL Evaporates
In May 2022, the Executive Team at GKM WI Global Supply Chain, LLC had several meetings to discuss the chassis supply in Chicago, IL. In February, the first of several conferences were held in Illinois and Wisconsin to review details of a proposed strategic partnership between the GKM WI TEU Circuitous Platform and a potential exclusive-use service provider, that owns chassis.
On August 15, 2022, Brian Harris, Senior Vice President, Compliance, Linear and Non-Linear Modeling for Cost Assignments, announced the WI Platform added a dedicated container process component for Exports and Imports, that would launch on August 26, 2022.
JUST IN TIME
The week of August 8, 2022, chassis weren’t available through normal processes at CSX 59th and NS Landers. Containers were grounded and assessorial fees accumulated. On August 25, Mr. Harris decided to launch the modality that, if successful, would provide relief and visibility for GKM WI Platform users, now and in the future.
On August 26, 27, and 29, forty-two containers were recovered and processed by the WI TEU Circuitous Platform’s dedicated service proposition, DCR-52-51. In addition, over 18 containers were picked up, so products at the GKM WI International TEU Center could be loaded and transported to appropriate railroads for export.
1) Strategic Plans to Service GKM WI Platform Clients
WI Platform Dedicated Service Provider, hereinafter referred to as “DCR-52-51” strategic plans to service the GKM WI Intermodal Platform clients are as follows:
Priority Customer Status
DCR-52-51 has identified and will dedicate Drivers / CMVs / Chassis to service the WI Platform clientele.
Dedicated assets rank high in DCR-52-51 metrics to ensure reliability.
DCR-52-51 plans on delivering commodities on time at a minimum of 90% with a 100% quarterly goal. The Goals are based on asset allocation, asset reliability, and logistic planning.
DCR-52-51 has invested in Geo-fencing technology and real-time GPS tracking integration with our TMS to ensure accurate and dependable updates.
DCR-52-51is dedicated to increasing asset allocation as needed to meet the needs of the GKM WI TEU Platform.
DCR-52-51will maintain an open door for the GKM WI executive team to discuss resource/operational needs required to optimize visibility, efficiency, and execution.
2) Plans to Maximize DCR-52-51 Owned Chassis
DCR-52-51’s short-term and long-term plans to maximize company-owned chassis are:
DCR-52-51’s Operational and Logistic mapping reduces road time and client serviceability through client and asset management.
3rd Party / Offsite yard utilization allows for chassis recycling
2-1 Chassis to Truck ratio
Offsite / 3rd party yard usage
20% or less of pre-2010 chassis in active rotation
Reducing major maintenance intervals
Reducing major maintenance issues
3) TEU Recovery / Chassis Recycling
DCR-52-51’s strategic plans to recover TEUs to recycle company-owned chassis are:
DCR-52-51 dispatch operates on a minimum of 48-hour planning over 80% of the time.
The 48-hour planning cycle allows operations to adjust for asset location, availability, and logistic planning.
Operational Managers assist our dispatching team in maximizing route and time management by reviewing dispatches 24 hours before driver dispatch.
DCR-52-51 has agreements with a few offsite locations in the Chicago and Metro area. This provides options for container storage.
Offsite locations are equipped with the appropriate machinery to offload and load containers.
Each location has been vetted and allows DCR-52-51 to operate and access sites at nearly 24-hour intervals.
4) Chassis Acquisition
To combat the chassis shortage prevalent in the intermodal industry, DCR-52-51 has implemented solutions for our company’s short-term that directly impact our long-term plans.
30% company profit allocation to Chassis acquisition.
DCR-52-51chassis acquisition program started on 01/01/2022.
1.5-1 Chassis to Truck ratio
Leased Chassis program through private intermodal providers.
Leased chassis reduction based on acquired chassis/freight volume.
Once a 1.5-1 ratio is achieved, there will be a change in focus on reducing the amount of pre-2010 chassis to 20%
A quarterly allocation of 15% to purchase allocations or post-2017 chassis.
Achieve a 2:1 ratio with a sub-20 % pre-2010 chassis and 18% chassis reserve by 2025.
5) The Significance of Access to the GKM WI Platform
Critical Assessment & Considerations for Current and Future Growth
Access to the GKM WI Platform allows DCR-52-51 to grow through the stability of previously discussed specific operations. It will positively affect our quarterly projections and planned driver and asset acquisition. The GKM WI Platform will increase operations, driver, and client satisfaction by saving dock time and pulling containers from the rail ramp timely, lowering demurrage fees, and aiding in clients’ satisfaction, visibility and efficiency.
6) Chicago Drayage Market Opinion / Chassis Shortage Opinion
Based on the “Freight Rail Futures for the City of Chicago” and Bureau of Transportation Statistics “Freight Transportation Services Index (TSI)” reports and our market observation; It is widely agreed that the Chicago drayage market may slightly plateau and grow at a more controlled rate when compared to the post-covid drayage boom.
Based on the same reports and market analysis, DCR-52-51 believes the chassis shortage will not end soon. And in closing, DCR-52-51 commends GKM WI Global Supply Chain, LLC, for using state-of-the-art, methods and best practices to best service GKM WI Platform clientele.