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Leading the Chassis Transition

Leading the Chassis Transition. World’s largest chassis solutions provider Own approximately 245,000 chassis Operating throughout North America Owned by Fortress Funds (NYSE: FIG) Solutions include: Long term leases Pool and fleet management services Chassis marketplace. TRAC INTERMODAL.

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Leading the Chassis Transition

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  1. Leading the Chassis Transition

  2. World’s largest chassis solutions provider Own approximately 245,000 chassis Operating throughout North America Owned by Fortress Funds (NYSE: FIG) Solutions include: Long term leases Pool and fleet management services Chassis marketplace TRAC INTERMODAL

  3. Leading Chassis Solutions Provider • There are 780,000 marine and domestic chassis in North America • 640k Marine Chassis – TRAC has 27% share • 140k Domestic Chassis – TRAC has 30% share • TRAC is the preferred chassis solutions provider to the intermodal industry

  4. Motor Carrier Program • Steamship Line transfers the chassis cost and lease to the Motor Carrier. • Chassis Billing shifts from SSL to MC. • Small volume markets. • Small Motor Carrier community. • Little of no migration. • Trac and DCLI are already invoicing Motor Carrier for chassis usage.

  5. Baltimore, MD Philadelphia, PA Mobile, AL Boston, MA Miami, FL Select Inland areas: Harrisburg, Buffalo, Pittsburg, Tampa, Birmingham Locations

  6. SS Lines In Transition

  7. No free days to Motor Carrier. Do not distinguish between Carrier Haulage / Merchant Haulage. No free days to Motor Carrier. Distinguish between Carrier Haulage and Merchant Haulage. SSL protects specific Accounts with exceptions and offer free days. Billing Options

  8. FMCSA Regulations on Roadability • A well meaning and well intentioned Regulation. • The FMCSA Regulations are not working very well in the Intermodal supply chain. • Motor Carriers are not reporting damages. • Motor Carriers are still picking up damaged chassis. • Enforcement is sporadic and inconsistent. • The goal of all chassis suppliers is to provide a Motor Carrier with a good serviceable chassis. FMCSA has not changed this dynamic.

  9. Chassis costs on supply chain • Steamship Line transfers the chassis cost and lease to the Motor Carrier. • SSL will no longer subsidize the cost of a chassis that dwells at a shippers facility. • SSL eventually will discontinue subsidizing Carrier Haulage / exceptions. • SSL eventually will stop paying for on-terminal usage and reposition. • Small underfunded Motor Carriers will disappear or have to join larger Motor Carriers. • DRAYAGE RATES WILL SIGNIFICANLY INCREASE.

  10. Chassis Shortages • Chassis shortages are not the norm. • Chassis shortages will develop when unforeseen events cause a dislocation in the supply chain. • No chassis fleet is designed to react to major distortions in supply chain. • Examples: Significant spike in volumes that were not forecast. Weather related closures of Ocean and Rail Terminals. Massive ship bunching. Inability to repair chassis due to weather.

  11. Monopoly • Chassis monopoly can not occur in a grounded terminal operation. • All stake holders have many other opportunities and sources to obtain chassis supply. • A chassis monopoly will occur in a wheeled terminal operation. • Example: SSL gives instructions to land a SSL container on a Pool chassis. Motor Carrier will have to use the Pool chassis. Alternative will be to use a foreign chassis, however, Motor Carrier will have to pay for flip and wait for flip.

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