2021 Year in Review: Familiar Challenges, Positioning TRAC for Success

January 13, 2021

In many respects, the hurdles the TRAC team faced in 2021 in the intermodal transportation sector were a continuation of challenges that emerged in 2020. Robust online spending fed surging imports, ports were overwhelmed, and the supply chain stalled in the face of unprecedented congestion. As we head into 2022, despite the massive progress that has been made through focused, collaborative effort, many of these challenges remain acute.

Record import volumes will continue to challenge ports

Retailer containerized imports will finish 2021 with the highest volumes and fastest growth on record, despite the supply chain issues and disruptions caused by the pandemic. Total exports for 2021 are expected to come in at 26 million TEUs, more than 18 percent above 2020’s record levels. The ports of Los Angeles/Long Beach, New York/New Jersey, Savannah, Charleston and Houston are just a few of the many ports encountering surges of inbound
cargo.

At certain points last year, there were close to 100 container-filled ships waiting for berths at the Ports of Los Angeles and Long Beach. While this number fluctuated somewhat, strong bookings by carriers at terminals through the end of 2021 point to continued healthy Asian exports and heavy import volumes well into this year. Long-dwelling imported containers and empties still clutter some ports, awaiting transport and pick-ups. Many warehouses on premise are filled to capacity with containers. Despite everyone’s best efforts, ports were challenged to maintain the staffing levels needed to handle incoming volumes. Worker shortages from Covid and sheer lack of manpower are also negatively impacting U.S. warehouse and distribution centers operations.

Chassis dwell times remain elevated

Street dwell times (the time between a chassis’ departure and return to a marine terminal) at some locations are at least twice what they should be, reducing chassis availability in those markets. TRAC is working closely with our transporter customers and other stakeholders to reduce these dwell times and collaborate with our partners to retrieve and redeploy our assets as quickly as possible. Some ports, most notably Los Angeles/Long Beach, plan to begin fining shipping lines for empty containers that dwell at terminals. Injecting more chassis into markets is challenging, as the manufacture and import of chassis from China has been halted by duties. With domestic production slowed, the TRAC team are focused on ensuring we execute effectively and continue to increase chassis supply in 2022. Our market leading position, scale and long-term vendor partnerships see us well placed in this context.

Global goods distribution pipeline remains clogged
A continued strong economy in the U.S. and elevated consumer demand for goods are impacting ports as they manage record import volumes. Labor shortages for vital parts of the supply chain workforce have compounded the challenge, slowing the velocity of container pick-up, delivery, and return. Accumulation of inventory to meet consumer demand has filled warehouses and caused containers to pile up at ports, awaiting processing and delivery. All of this has led to ongoing port congestion. Many believe these issues will last well into this year, as industries accelerate output to meet demand after the Covid-induced shutdowns of 2020 into 2021.
Doing our part: TRAC’s 2022 initiatives

TRAC is undertaking three major initiatives in 2022 to help address these and other industry challenges. These efforts aim to help ensure greater port fluidity and underscore our commitment to a key priority: environmental stewardship.

1. Adding chassis capacity – To help address cargo volume needs at the ports, inland terminals and rail depots, we are repositioning our chassis from surplus locations to pinch point locations where these assets are most needed. At the same time, we are investing in new equipment and upgrading current equipment to fully support the flow of goods. To put this investment in context, TRAC has invested more than $700 million in upgrading and buying chassis in just the last six years, part of more than $1 billion we’ve invested since 2011. To help meet record import volumes, TRAC added more than 750 chassis to the port of NY/NJ in 2021, complementing the more than 1,400 it added to the port in the second half of 2020, when volumes began to spike. At the port of Los Angeles/Long Beach, TRAC has added nearly 4,000 chassis to our pool since the start of 2020. We have also added 8,000 units to two private pools on the West Coast, supporting our customers with new solutions and easing pressure on the Pool of Pools.

2. Reducing out-of-service units – A key priority at TRAC has been to get our out-of-service (OOS) units up and running as soon as possible, to inject more supply into the market. We have succeeded largely due to our close collaboration and strong partnerships with TRAC’s maintenance and repair vendors, as well as organized labor. Our out-of-service numbers, at major ports, are in the low single digits. Current 40’/45’ equipment type (the most in-demand sizes) OOS numbers across TRAC’s fleet are at record lows of 3 percent, a sharp drop from 2020 OOS levels of 7 percent. At the Port of Los Angeles and Long Beach, the nation’s busiest port, 40’/45’ equipment type OOS levels are also at record lows of 2 to 3 percent. We’re focused on getting units repaired and, if necessary, upgraded to return them to service and ease availability shortfalls. TRAC’s commitment to fleet modernization and upgrades keeps our chassis in roadworthy condition for longer periods of time, reducing the need for maintenance and repairs.

3) Sustainability –TRAC takes a proactive approach to sustainable fleet management with a focus on upgrading and greening its fleet through environmentally friendly processes and large-scale programs like green chassis upgrades. Our goal is to minimize our waste stream. When it’s time to retire chassis, TRAC has a comprehensive chassis recycling program to ensure all parts are re-used or re-purposed. Each year, TRAC, together with its recycling partner Schnitzer Steel, recycles 20 million pounds of chassis metal, 1.5 million pounds of rims, six million pounds of pure rubber dust and 70,000 tires. Producing steel from recycled metal requires 74 percent less energy and 40 percent less water. It reduces CO2 emissions 58 percent compared with producing steel from materials such as iron ore, coal and limestone.To make our equipment more environmentally friendly, TRAC also converts thousands of chassis to more sustainable features including LED lights and OEM tires. TRAC Tire Services uses innovative manufacturing and intermodal rubber for safety and minimized wear. TRAC’s tire retread division helps significantly lower emissions. In fact, retreading tires requires 70 percent less emissions than producing a new tire. 2021 presented a myriad of challenges for global supply chains, many of which are expected to continue well into 2022. Despite this, the TRAC Intermodal team and our dedicated partners remain committed to doing our part to ensure greater port fluidity to keep the supply chain moving.

About TRAC Intermodal
TRAC Intermodal (www.tracintermodal.com) is North America’s leading marine chassis pool manager and equipment provider with 11 pools under management across the U.S. TRAC has the largest fleet of marine and specialty chassis in North America and operates an extensive network of facilities. TRAC’s subsidiaries offer emergency fleet roadside assistance through FYX, and maintenance and repair services as well as storage and parking solutions through TRAC Services.

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