Trac Intermodal preps 200K chassis for China container surge

A top executive with the largest provider of intermodal chassis says his company is ready for the coming crush of China container imports headed to the United States.

“We’re preparing for a bounce back of volume this summer,” said Trac Executive Vice President and Chief Commercial Officer Jake Gilene, in an interview with FreightWaves. “We’re staying very close to our customers gathering their forecasting data, so we can see what they see. We are preparing now for volume that’s coming in late June-early July.”

For Trac, which maintains a fleet of 200,000 domestic, marine and specialty chassis, that means making sure there are available chassis in the right markets, and coordinating those efforts across all ports and terminals.

After the pandemic supply chain crisis, Gilene said, Trac worked with major railroads to establish strategic chassis reserves.

“Post-COVID, we began a strategic chassis reserve program where Trac worked with Union Pacific to set aside chassis at specified locations where it makes sense for our host and our customers. This was done in the event of a black swan event. We are actively looking to expand this in other markets where it makes sense,” Gilene said.

To build up sufficient fleet resiliency, “Trac has developed a number of key locations around the country where our usage data and customer demand would indicate the need for safety stock.”

In addition to participating in 12 neutral chassis pools across the country, Trac operates four private pools on the West Coast with ocean carriers CMA CGM, Zim (NYSE: ZIM), Evergreen (2603.TW) and Hong Kong-based Hede International Shipping. 

During the lull in China traffic precipitated by the trans-Pacific tariff dispute with Washington, Trac looked to reposition chassis where they could do the most good. Upgraded units sitting idle in California were moved to the Midwest to refresh fleets worn by winter weather.

Trac is anticipating higher-than-normal container volumes come June.

“The ocean services that were suspended are being reinstated and schedules are now booked,” said Gilene. “Carriers are swapping vessels into the eastbound trans-Pacific trade lane to bring in more TEUs. From our customer conversations and forecasting, it’s a mix of goods that were ready to ship and some new factory production, but mostly new, reinstated production.” 

One component Trac will be watching closely is dwell time.

“Average dwell is six to seven days, and during COVID we saw that increase [by] two to four times, depending on the market. If the supply chain isn’t making a quick turn, the dwell time is longer for where the chassis is going, impacting chassis availability.” 

The big unknown is how long the surge is going to last.

“We’ve seen varying timelines for backlog recovery. During COVID, a three-month supply chain shutdown took 18 months. Building on what we learned, we are proactively repairing additional chassis and are exploring reserve expansions where they make sense.”

Gilene added that since the pandemic, more motor carriers have acquired their own chassis, making them less dependent on pools.

The import surge could give Trac a needed boost. In December, Moody’s revised its outlook for the company to negative, saying then that tariffs posed a risk to import volume growth.

Find more articles by Stuart Chirls here.

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