The chaos crippling the U.S. supply chain has many obvious culprits: relentless consumer demand, a shortage of truck drivers, congested railroads, backlogs of ships hoping to dock in overcrowded ports, and more.
- Part of the supply chain turmoil is an easily overlooked problem: a truck chassis shortage.
- New tax taxes on chassis imported from China have roughly tripled their price.
- Trucking companies and shippers’ associations are calling on President Biden to remove the duties.
But a harder-to-spot problem contributes to the mess: the shortage of truck chassis equipment, the skeletal platform that holds the rest of the truck in place, including the engine, axle, cab, and fuel tank. fuel.
Even now that the ports of Los Angeles and Long Beach are operating 24/7, more than 30% of the appointment slots given to truck fleets to transport containers are not being used. This is because carriers are struggling to find enough truck chassis to move loads.
Pool of Pools, a platform that records the movement of around 80,000 chassis through the ports of LA and Long Beach, found that the number of chassis entering and leaving the ports fell 23% between March and August. of this year.
First, the scarcity – to some extent – is artificially designed. Bottlenecks at terminal docks, intermodal hubs, warehouses and distribution centers have forced trucks to idle for days without the ability to unload their cargo, inevitably reducing chassis availability.
Second, it is not easy to get more chassis.
The largest manufacturer of truck chassis in the world is China, and the United States is one of the largest importers. In May, fears of product dumping led the US Department of Commerce to impose a 221.37% tax duty on imported Chinese chassis – in addition to the 25% tariffs the Trump administration imposed on various Chinese products – with the aim of “allowing US producers to be competitive again in a fair market. This adds about $ 25,000 to the price of a standard chassis, which typically costs around $ 12,000.
And while the number of chassis in port operations has declined, dwell times (how long a truck chassis waits to enter a terminal, unload and / or load and depart) have dropped from a few days before the pandemic to more than two weeks.
This increase reflects two issues: pressure on terminal operations struggling to handle extraordinarily high freight volumes, and a shortage of trucking chassis complicating transportation operations.
“The shortage of drafts at ports is extremely difficult and is just another example of the supply chain capacity shortage and resulting delays,” said Adam Compain, senior vice president of information on the supply chain to the Supply Chain Visibility Platform Project44. “The inability to get enough truck chassis has ripple effects that make downstream operations difficult: staffing in the warehouse, ensuring high speed of inventory, and shortages of inventory in the warehouse. due to slow replenishment. “
The shortage of chassis also results in port storage costs for shippers and retailers, who are forced to keep their containers at the port premises. “These excessive storage charges due to chassis shortages are not the kind of icing on the cake heading into the holiday shopping season,” Compain said.
The additional tax rights have been a bone of contention. As trucking companies and shipper associations vehemently call on the Biden administration to remove the additional tax duties, domestic chassis producers of the Coalition of American Chassis Manufacturers have lauded efforts to protect workers and workers. American companies.
However, domestic chassis production cannot be ramped up quickly to meet current levels of demand. By raising barriers to entry for imported chassis, the United States can expect to continue to face chassis shortages through 2022.