Chassis Roadability

Coupled with the uncertainties surrounding chassis ownership discussed above, the regulatory
implementation of the Chassis Safety-Roadability law (Section 4118 of the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) has
unfortunately not yet resulted in assuring the availability of safe-roadable chassis in sufficient
numbers to support the growing numbers of containers that must be efficiently moved through
our ports’ infrastructure. The IMCC has filed comments in various governmental proceedings
and industry presentations which included the following:
¢ Overall program implementation has been slow and we believe that compliance with the
key chassis safety mandates has not yet reached a level where the chassis that are moving
on America’s roads can be considered to be systematically maintained and repaired.
¢ The law’s mandate that equipment providers provide safe “roadable” chassis for pick-up/
“interchange” with truck drivers is not being complied with or enforced and causes
drivers to wait while the chassis is being repaired before they can leave the facility.
¢ As aresult of chassis being deployed that are not Roadable, intermodal truck drivers
continue to be charged during roadside inspections under the CSA program with
equipment violations that are on the chassis-vehicle # 2 - that we believe should instead
be assigned to the equipment provider who under the law is the responsible party for
ensuring chassis are roadable.
¢ Intermodal drivers are effectively being forced to leave the port and terminal drayage
sector because their CSA scores are being unfairly elevated by chassis violations that
will ultimately make them unemployable.
¢ Lack of a sufficient and predictable chassis resource will hinder port and terminal efforts
to address port congestion related issues.

We are continuing to press FMCSA to take more aggressive regulatory actions to ensure
compliance with the chassis safety requirements of the law. But in the context of chassis
availability, it must be noted that in the short term increased enforcement could in some
instances and at some locations reduce the number of chassis which can be legally
utilized/deployed until chassis safety standard are met.

Another Roadability related issue involves organized Labor’s assertion of a contractual right
over chassis repair and maintenance (M & R) activities. Under the historic chassis model
discussed above, chassis were owned by the ocean carriers and stored, repaired and maintained
on port-terminal property by organized labor under contract. Under the evolving new chassis
model, the ocean carrier/terminal/port/Labor contractual link is no longer prevalent — the
equipment is more often owned by private third party leasing companies or motor carriers.
Labor, however, still insists that it will repair and maintain the chassis equipment. Indeed, the
International Longshoremen’s Association (ILA) new master contract includes language that
acknowledges their jurisdiction for chassis M & R and the west coast International Longshore
and Warehouse Union (ILWU) negotiations which are underway likewise highlight chassis M &
R repair jurisdiction.

While the large chassis leasing companies and pool operators have not generally sought to move
their operations to nonunion M& R work (and there is plenty of repair work that is needed so that
should not change anytime soon), in the future and even now for some smaller trucking company



during period of congestion. In addition, it now seems apparent to all port stakeholders that
solutions to address port congestion are also very much tied to the long neglected and until
recently not generally even discussed intermodal chassis that provides the pivotal link between
the truck driver and the transport of the international freight container. As a result, congestion
solutions now include the need to establish “gray” chassis pools with operational rules that not
only inject competitive pricing components but also recognize the need to enforce statutorily
mandated chassis “roadability”-safety conditions as well as effective roadside repair programs.

Indeed, in just the last few weeks port stakeholder groups in several regions have discussed and
in some cases implanted plans: to extend “free time” contractual provisions and suspend
demurrage fees when congestion causes container pick-up delays; to establish chassis pools on
both the east and west coasts to include “gray” poll mandates; and in Long Beach, the port is
considering acquiring 3000 chassis to use as a controlled resource option to be deployed in times
of equipment shortages.

From an intermodal trucking prospective, effective management of port congestion will also
positively impact and help mitigate key port truck drayage industry concerns regarding both
driver compensation and driver shortages. As identified in a recent study by the Tioga Group,
port trucking/drayage related delays are costing the industry $348 million, 14 million hours and 9
million gallons of fuel annually, and adding 103,000 tons of GHGs unnecessarily to the ports’
emissions’ footprint.

As referenced above, however, very much exacerbating the search for port congestion solutions
is the fact that chassis ownership is undergoing a rapid evolution whose final structure is not yet
certain but whose resolution must be reasonably assured before congestion solutions (like
extended gates hours, trucker appointment/reservation systems etc.) can be successfully
deployed. Compounding the situation, Federal Motor Carrier Safety Administration (FMCSA)
regulatory operational mandates for truckers and chassis concerning Hours of Service (HOS),
Compliance Safety and Accountability (CSA) and Chassis Safety-Roadability very much impact
and potentially restrict port and terminal operational flexibility but are in varying degrees beyond
the control of port/stakeholder management decision makers.

These FMC sponsored forums are indeed providing open and candid discussions among the
relevant port stakeholders and as a result are helping us to reach a common understanding of the
specifics and possible solutions to addressing the congestion problems we are currently
experiencing. Thank you for your leadership and we look forward to working with you to
reestablish the requisite efficient port/container transport logistics framework through which a
substantial portion of the consumer goods and freight our nation relies on must traverse.

The following issue discussions are submitted for the record for this October 30 forum and
were also included in my comments previously submitted to the Commission during port
congestion briefings on June 18 and October 1.

Gate Congestion - Truck Waiting Lines and Turn Times
Port congestion is most often visibly marked by long lines of idling trucks waiting to enter port

terminal complexes. Such congestion is not only a very real business concern for the



adequately. Interstate 26 is the major artery into and out of the SCSPA and is
incapable of effectively handling the traffic volumes of today. This interstate
needs to be expanded from start to finish. Interstate 26 intersects with Interstate
526 in North Charleston and runs to Mt. Pleasant, SC where the SCSPA largest
terminal is located, The Wando Welch Terminal. Interstate 526 is a much newer
highway than is |-26 but is none the less over congested and adds to the loss of
port productivity. At the intersection where these two interstates connect is a
major bottleneck and at certain times of the day can turn a 12 mile trip into an
hour transit each way. It is obvious to the ATA and to the trucking industry at
large that we are past due as a nation in increasing the federal motor fuel tax and
indexing it to inflation to offset fuel efficiency gains and the use of alternatively
fueled vehicles to fund our federal highway system. This commission would do
well to encouraging Congress to address America’s highway needs by stabilizing
the Federal Highway Trust Fund by increasing the federal motor fuel tax. This
funding mechanism allows for 98% of the collected fund to flow directly to our
nation’s highways, while all other funding mechanisms requires a major portion of
the collected revenue go to the administering of the collection process, and not to
our roads.

| am thankful for this forum and the opportunity to participate. Hopefully
through this process and the efforts of the many dedicated entities making up
America’s logistics supply chain we will see improved productivity and greater
operating efficiencies that will benefit all America.


chassis owners off premise nonunion repairs are an issue. How this will ultimately play out is
unknown but truck traffic flow through the gates will likely be slowed by the unions at times
when they want to highlight their M & R claimed rights.

Thank you.

10



addendums covering specific terms for free time and per diem filed by individual ocean carriers
when their terms and charges differed from the standard UIIA provisions.

In the still evolving new chassis ownership and deployment marketplace shippers and motor
carriers are now confronted with a widely varying and confusing array of interchange and
transport contracts that are complex, expensive and makes planning and billing accountability
very difficult and operationally inefficient. Moreover, motor carriers often are confronted with
no realistic options to obtain/provide their own chassis because in many wheeled locations
(container is already mounted on a chassis when the trucker arrivers) flipping the container to
your own chassis instead of taking it already mounted on another chassis provider’s equipment is
costly/time consuming/not practicable. In addition, providing your own chassis is often not
practicable because most intermodal motor carriers competing for cargo shipments are small or
medium size firms that do not have the capital or resources necessary to acquire their own
chassis equipment. As a result of this no real trucker “Open Choice” chassis supply reality, in
many areas and intermodal facility locations daily rental charges the trucker must now pay are
subject to little or no competitive rate pressures.

In order to proactively address the otherwise limited options available to motor carriers in the
emerging chassis supply model, the North America Chassis Pool Cooperative, LLC.
(NACPC) was incorporated on October 3rd, 2012. The Company formed by a group eleven U.S.
motor carriers received approval from the U.S. Surface Transportation Board (STB) on
January 22nd, 2013, to commence operations as a joint venture chassis pool cooperative. With its
STB authority NACPC has begun to acquire or lease intermodal chassis from ocean carriers and
or chassis leasing companies and contribute these chassis into various existing chassis pools in
the U.S. NACPC’s mission is to establish an effective chassis supply utility that will be
implemented on a national basis to support the U.S. intermodal container network with
efficient chassis supplies, a modernized chassis fleet and a transparent set of economics and
terms of use that will benefit all users.

An important objective of NACPC is to preserve the existing “gray pool” low cost chassis pool
model previously established by the ocean carriers under their FMC approved agreement with
the Ocean Carrier Equipment Management Association, Inc. (OQCEMA). These open pools are
managed by Consolidated Chassis Management (CCM), a pool management company owned by
OCEMA. Shippers, ocean carriers, railroads and motor carriers all have benefited from this
initiative, which included CCM pool management services which are assessed on an “at cost”
pass-through basis and serve to moderate the overall cost of containerized freight transport.

Contributory “gray pools” such as those managed by CCM allow users to draw any chassis from
the pool regardless of ownership. The contributory pool model thus eliminates duplicative costs
and maximizes the use of limited space at port and/or inland intermodal locations by obviating
the need for a contributor to have its own chassis storage facility. It also ensures an adequate
supply of chassis for all users. CCM manages the chassis in the pools (including logistics,
billing, inventory supply, maintenance, repair and the repositioning of the chassis) but usage
arrangements are determined between the chassis contributor and its users. CCM pools thus
foster competition by allowing motor carrier users the ability to choose from more than one
chassis provider in a particular pool i.e. to have “Open Choice”.



Federal Maritime Commission Forum on Port Congestion
Charleston, SC, Thursday, October 30, 2014

Prepared Remarks for Donald A. Pisano, President or American Coffee Corp.
Director of National Industrial Transportation League and Green Coffee Association

Good afternoon. My name is Don Pisano and J am president of American Coffee Corporation of Jersey
City, New Jersey. We are importers and traders of green coffee beans, which are the raw coffee beans
that are imported and delivered to the manufacturers here in the United States for roasting, grinding,
packaging and distribution.

Jam on the board of directors of the National Industrial Transportation League and chair its Ocean
‘Transportation Committee, J am also on the board of the Green Coffee Association and chair its Traffic
and Warehouse Committee,

On behalf of both organizations, ] would like to express our appreciation to the Federal Maritime
Commission for organizing and sponsoring these forums which allows all stake holders the opportunity to
provide constructive dialogue. We do think these forums have raised the level of attention to the
problems and are an important part of the process to eventually achieve a long term solution,

Everyone here knows first-hand of the significant congestion our ports are experiencing around the
country, so I will forgo restating the litany of issues and instead simply try to provide a shipper's
perspective. Although the congestion and delays affect everyone, it is the shipper who pays the freight
bills which covers the costs of the ships, equipment, terminal operations, drayage, and in many cases,
demurrage or detention charges.

As an importer, | have always considered our draymen as a direct extension of ourselves, the shipper.
Whether handling import or export cargo, the drayman is the shippers representative at the ocean
terminals, So what affects the draymen, affects the shipper.

A significant problem with the industry structure is the fact that there is no real commercial relationship
betsveen the shipper, or his draymen, and the terminal operator upon whom we both depend for efficient
performance, although neither of us have any means to impact its level of service.

The ocean carriers have been aggressive in pursuit of profitability by driving down unit costs and have
more than tripled the size and capacity of their vessels. There have been tremendous efforts to
accommodate these ultra large vessels by port authorities, terminal operators, the Army Corps of
Engineers and even of course, the lowly tax payer, who has very little say in how his money gets spent.

Clearly too little planning and investment has been made to ensure the efficient throughput of the cargo
out of the terminals and into the commerce for which it is intended. Terminal operators have provided
inadequate resources to their gate operations. Local, states, and the federal government have failed to
direct funds in developing direct links from our ports to the interstate highway system and on dock rail
where attainable.



currently behind the industry demands. We hear a lot from East Coast port
authorities and politicians about the introduction of “big ships” after the Panama
Canal expansion. That can’t happen without critical infrastructure development,
starting with the ports.

Terminal Operators need to invest in container handling equipment to ensure
they can grow their operations to eliminate congestion and empty container
rejection. They also need to invest in necessary resources to timely repair chassis
in terminals that are perceived to have more equipment out of service than in
service. Terminals cannot simply rely on solutions such as Pier pass, which have
only pushed gate congestion at facilities to peak periods. Equipment investment
needs to be considered in order to ease congestion and to keep the terminals
fluid.

Motor Carriers need to invest in their drivers to ensure there is a future for
drayage and inland trucking. Motor carriers also need to invest in equipment and
taking responsibility for chassis in line with the model followed elsewhere in the
world. The owner operator has been squeezed for years on rates to a point where
the driver living wage is unsustainable. The driver population average age has
grown from 41 to 55 over the last decade. This trend is obviously unsustainable
and the entire supply chain needs some corrective action to be taken.

Shippers (NVOCCs and BCOs) need to invest in the service levels they demand.
Shippers are demanding the best service, while driving rates down. Cargo is
compressed into seasonal windows, straining peak capacity. Warehousing hours
do not meet the demand of cargo surges, so shippers are holding equipment and
asking for more free time. Carriers are usually willing to grant the additional free
time to secure the business, but this just contributes further to the equipment
shortages. The cycle of service demands and rate erosion is not stable.

Railroads & TTX need to invest in equipment and infrastructure and also look at
operational practices that add to the congestion and equipment shortages. For
example, the wheeled chassis operation required by railroads to minimize
operational costs has a negative impact on already over utilized chassis capacity.
Also, there is insufficient rail car supply in the network, causing rail car shortages


Thank you Commissioner Khouri for the opportunity to address the FMC on port
congestion issues and industry challenges that all stakeholders are wrestling with
in today’s logistics supply chain. | am Ed McCarthy Sr. VP and COO of CMA CGM
Americas and Vice Chairman of OCEMA.

My entire career has been within this industry and has seen my fair share of
operational challenges. After spending nearly two decades on both the East and
West Coast in port operations with APM Terminals and VIT, | have now spent the
last three years on the carrier side, giving me even greater insight to the
challenges that occur “outside the gate.” Yet nothing has quite prepared me for
the challenges we are facing today. As everyone here knows, the smallest bit of
congestion at the port has a trickledown effect throughout the intermodal chain.
Even brief periods of congestion can lead to days or weeks of recovery. With the
sustained congestion we have seen this year, the supply chain is seriously at risk
of grinding to a halt which will impact our economy. | think all of the stakeholders
here today know that I’m not exaggerating or being melodramatic when | say that
the challenges we are discussing today have reached crisis level.

| have followed the previous port congestion forums with great interest, and |
appreciate Commissioner Khouri and the other commissioners providing these
opportunities for public discussion. Unfortunately, it seems to me that at the
previous meetings many stakeholders have been too anxious about their own
point of view and not working collaboratively with other stakeholders. To quote
Pogo: “we have met the enemy and the enemy is us,” all of us. We need to stop
working against each other for our own interest and come together on solutions.
| recognize that each stakeholder here today has competing priorities; but at the
same time, | hope we can agree that we each need to make a profit in order to
build infrastructure and reinvest in our individual organizations for sustainability.

With that in mind, I’d like to highlight a few areas where | think investment is the
key to resolving the current crisis.

Port Authorities need to invest into capital infrastructure to ensure competitive
capabilities and to develop jobs in each of their states. The large capital
investments necessary to develop facilities have been slow to develop and are


As the evolution in the new chassis supply model has progressed, however, there is cause for
concern that this successful gray pool model is being eliminated and replaced by unregulated
chassis providers whose growing dominant control of equipment supply and interchange terms is
serving to stifle the introduction of competitive chassis supply alternatives. Indeed, ocean carrier
chassis sales in the last 2 plus years have been aggressively pursued by only a few well financed
leasing companies and the resulting post-sale motor carrier chassis leasing terms are now highly
restrictive with daily rental charges most often being dictated - not negotiated.

It is important to note that even though ocean carriers have decided to sell their chassis and not
make them part of the container/freight delivery transportation contract, they still need to secure
chassis to support their continuing containerized freight activities at marine terminals and
intermodal rail operations. As a result, ocean carriers are often securing, as a part of their sales
negotiations and arrangements with leasing companies or other buyers, a contractually assured
supply of chassis for what is often very favorable or even below market terms. While from a
business point of view this may appear to be a reasonable goal in the ocean carrier transition
activities, motor carriers and shippers are concerned that the cost for these below market on
terminal services are or will in fact transfer the differential costs indirectly to the motor carriers
or other supply chain participants. Indeed, as referenced above, in some recent ocean carrier
announcements motor carriers are advised that future chassis transport of their ocean containers
must be with the leasing company / buyer designated by the ocean carrier at a rate already set in
the purchase contract. Motor carriers that now must deal with these directives in most instances
have no practical opportunity to select their chassis provider or shop for more competitive
charges and terms.

We believe daily chassis rate competition can be sustained by ensuring that motor carriers have
the ability to select their chassis provider and that the transfer of the chassis fleet from one mode
to another is accomplished in a manner that provides fair treatment for all stakeholders in the
container transport sector.
¢ We recommend the Commission undertake oversight initiatives to facilitate - help
define and guide the new chassis supply and deployment model. FMC’s review and
monitoring activities now underway will help ensure that the transfer of chassis
supply from the traditional one mode (ocean carrier) model to the emerging
multimodal (motor carriers, leasing companies, ocean carriers) model is
accomplished within an economically transparent, responsible, predictable, and
safety oriented framework that preserves and promotes competition and does not
decrease transportation services.
¢ The evolving multimodal chassis ownership and deployment model obviously
presents federal jurisdictional challenges due to the non-traditional and cross
functional nature of the new chassis deployment system. FMC could help bridge the
jurisdictional issue by providing the forum for chassis oversight activities bringing
ocean carriers, chassis leasing and management companies, motor carriers and
potentially the FMCSA and STB together to facilitate system development and
ensure that the emerging model(s) do not cause substantial increases in
transportation costs or decreases in transportation services or equipment safety.



that equipment can be managed more efficiently by other stakeholders who are
in a better position to maximize efficiencies.

None of these issues are new to the industry, but they are exacerbated by the
volume growth in the industry. | do not pretend to think that these comments
are all inclusive for each of the stakeholders, but | do hope that | have identified
some of the competing challenges and areas where we can reach common
ground and stop working in different directions. Until we as an industry identify a
common path and accept that we all need to take responsibility for a financial
piece of the solution, this cyclical nature of congestion will persist and only get
worse. | recommend an industry wide CEO level task force encompassing all
stakeholders be formed to address the issues and work toward a common
industry solution. We all know the challenges and have the power to influence
the solution, but no one of us can solve it separately.

Thank you again for your time and opportunity to discuss solutions for change.


Statement OF
Philip L. Byrd, Sr.
President and CEO
Bulldog Hiway Express

Before
Federal Maritime Commission
Port Congestion Forum

Charleston, South Carolina

October 30, 2014

Commissioner Khouri | sincere appreciate this opportunity to discuss the very
critical issue of “Congestion” in America’s vital South Atlantic seaports.


Statement of

Curtis E. Whalen
Executive Director

Intermodal Motor Carriers Conference
Of the
American Trucking Associations

Before the

Federal Maritime Commission
At the

Public Forum on International Supply Chain
Efficiency: Challenges Facing South Atlantic
Ports
Charleston, SC

October 30, 2014



The current capacity crunch has stimulated a lot of attention and everyone has their own opinions about
the causes and even some solutions. But some are truly absurd and should be given little credence.

To be clear, port congestion is not due to shippers demanding lower freight rates so now the carriers are
struggling to survive and meet the service demands. The carriers made their own decisions to invest in
ultra large container vessels increasing their capacity well prior to the demand ever materializing, ‘That's
not on the shippers, that’s on them. Freight rate levels are mostly impacted by supply and demand, just
like most businesses, Surely carriers know this well since they have demonstrated their ability to
manipulate capacity when rates fall below acceptable levels. Bringing in extra high volumes on a single
ship well beyond the terminals current capacity to handle smoothly is something they themselves need to
better coordinate together, So don’t blame the shipper for poor economics or planning.

Another misdirection of blame for port congestion is the tack of truck drivers. The lack of drivers is an
effect of the situation, not a cause, Any day you can see lines of draymen waiting outside the terminals
trying to get in to pick up or deliver their loads. The draymen may in fact be fleeing the industry but that
is due to their inability to get in and out of the terminals in a timely manner so they can make a living.
Who can blame them? Improving the terminal and gate operations now will go a long way in preserving
the truckers we stil] have, and hopefully reverse the trend which is now heading into a crisis.

And finally, one of the most ridiculous suggestions of all is that current free time is too generous, and that
causes the back up at the terminals. | would have to say that { really don't know any shipper that looks to
store their cargo at the marine terminals. They just can’t get to them. What we have now is that the
shippers are being penalized with demurrage charges for the terminal operators own Jack of efficiency. If
anything, the lack of terminal and equipment free time may in fact contribute to the congestion, as there is
fittle allowance for schedule accommodations.

Making false arguments is not constructive and only serves as an impediment to finding solutions and as.
fodder for the media.

So from a shipper’s perspective, what we need is for the carriers and terminal operators to understand that
“Cargo is King”. They are in business to serve the beneficial cargo owner who ultimately pays the bills,
not solely each other.

We need labor to be part of the solution and work with management to get us through the more difficutt
periods of abnormally high volumes.

We need US Customs and all examination sites to be completely electronically integrated and eliminate
any need for hard copy “Permits to Transfer” or other documentation,

We need “grey chassis pools” where they currently don’t exist.

We need to factor in systems designed to allow for “street turns” so truckers can use the same import
equipment just unloaded for an outbound export load.

Longer term, we need to influence investment towards our gateways to improve the traffic patterns in and
out of the port areas providing easy access to rail, state and interstate highways.

Again, I thank the FMC and all of you in attendance for your time.



and delays throughout the network. While railroads want to protect their
individual interests, over usage of rail cars by one company to protect its interest
against competitors has a negative effect on supply throughout the industry.

Chassis Management & Leasing Companies need to invest in an ageing fleet in
new equipment and the resources needed to timely repair equipment, as well as

to reposition equipment from surplus locations. Depots are holding chassis that
could be deployed to mitigate chassis shortages in other areas. Again, this simply
exacerbates to the problem.

USMX/ILA/PMA/ILWU — Cyclical availability in the workforce and stronger internal
leadership in each organization is required to meet the demands of the industry. |
applaud what has been done by USMX and ILA to increase the workforce in NYNJ,
including the ILA effort this year to limit vacations in the North East to meet the
demand of peak freight. Labor availability has notably improved over 2013, but
these initiatives need to be formalized in an agreement with PMA and USMX to
ensure the industry is provided with the consistent, skilled and efficient labor
force for the long term. Certainty of labor supply plays an important role in the
confidence of shippers and carriers alike.

Last, but not least,

Ocean Carriers need to invest in larger ships to take advantage of the economies
of scale needed to provide superior service at a competitive price. At the same
time, we need to exercise restraint in pricing to ensure that service levels are not
eroded by declining rates. Right now, carriers are barely afloat, losing money as
an industry year after year. To mitigate the bleeding, the carrier industry has
adopted a slow steaming policy. This mean when vessels are delayed due to port
congestion, it is cost prohibitive to spend the money to make up time.

Carriers also need to play our role in equipment investment by ensuring a strong
supply of containers, including specialized containers, and we need to invest our
time and efforts into finding a solution for container imbalances so that the
containers are not only available, but available where we need them. At the same
time, carriers must continue to push for a move out of the chassis business so


because of the weekend vessel discharges, container ships work throughout the
weekend but typically there is little to no truck outbound activity.

Chassis Ownership and Deployment

The “Gray Chassis Pool” model we find to be beneficial in improving productivity
and efficiency. For a motor carrier to find a road worthy chassis at the beginning
of a work day and use it for the duration of the day serving numerous steamship
lines is extremely productive. However this process creates a cumbersome
chassis rental reconciliation audit for the motor carrier. At Bulldog the chassis
reconciliation process volume has required us to hire two additional
administrative employees to effectively manage the billing process. We are
aggressively adding to our already large Bulldog owned chassis asset pool.

Congestion Factors outside the Port Gates

It is important to understand that the water side of a port operation runs 24
hours a day seven days a week, while the truck gates only operate eight to ten
hours a day Monday through Friday. This imbalance of operating time is in large
part the major reason for production losses and operational inefficiencies.

Private sector warehouses, distribution centers, rail ramps, steamship line offices,
and government agencies all conform to schedules that are reflective of the ports
truck gate hours. This disallows trucking firms to double staff or stagger their
equipment and personnel to extend a given work day, therefore exacerbating
congestion during the eight to ten hour work day. The SCSPA has worked
extremely hard to grow our port volumes and has had considerable success to the
delight of all port vendors. {t has been quite obvious to us at Bulldog that the two
rail ramps serving Charleston have not adequately beefed up their operations to
effectively handle this increased volume. We experience longer delays at the rail
ramps than we do at any of the four Charleston port terminals. There simply is
not enough container-handling equipment in place to move the trucks in and out
with any degree of efficiency. This is a “Major” cause of loss productivity to the
entire port process. Additionally, we see our highway infrastructure as being
another major impediment to port productivity. | applaud the management of
the SCSPA and our state legislative body for their work in getting funding to
deepen the Charleston harbor, and to modernize all phases of the port operations
inside the gates. However, South Carolina road needs are not being addressed



international freight shipping sector but also presents a quality of life consideration for the
communities that are situated adjacent to these facilities. Long truck lines and the resulting hours
of non-productive, non-revenue waiting delays for the port driver community are becoming
routine enough that port drivers are leaving the drayage business or refuse to take loads to those
terminals with consistently long wait times. For example, I have been advised by the New Jersey
Motor Truck Association, an ATA and IMCC member, that many New Jersey motor carriers
who serve the NYNJ port complex have lost 20% of their driver work force over the last year.
Similar impacts are being experienced at the Port of Virginia. This fact should not come as a
surprise since with the all too common terminal gate delays drivers cannot generate adequate
revenues by making only 1 or 2 container pickup and delivery “turns” a day for which they are
paid. And, as we enter the container “peak season” leading up to the Christmas-holiday season,
projected container traffic volume increases and the resulting congestion are expected to only get
worse!

Some terminals attempt to address the negative financial impacts of “excessive” trucker wait
times through tariffs filed with the FMC. Unfortunately, most of these efforts like those in the
NYNJ Port complex intended to provide some compensation to drivers for excessive gate delays
are at best ineffective. Often these tariffs do not commence until the driver reaches the gate -
“first point of processing” and in today’s NYNJ port dray daily marketplace, drivers are often
forced to enter long lines and wait many hours BEFORE they reach the gate. Moreover,
given the narrow streets and large volume of trucks in and around terminal gates, the trucker wait
time frustration is exacerbated because once the truck enters the long waiting queues, the driver
is in effect captive-there is no space or configuration available to pull out and abandon the
line...you are in it for the duration.

While the “when and where the gate line starts” has historically been a subject of much debate
between the truckers and the terminals, with today’s available modern technology being
deployed, objective/accurate data answering that key question as is now readily available and is
already being used in LA and Long Beach. As of January 2014, NYNJ terminals now require all
trucks entering the port to have RFID tags. As a result, terminals could now capture accurate
waiting queue data - which would fairly establish wait times that should be eligible for offsetting
compensation - by simply placing RFID readers at strategic points outside the gate. This readily
available solution could be done cost effectively and thereafter provide more equitable tariff
based financial relief for “excessive wait time” compensation for drivers who are now bearing
the lion’s share of escalating port congestion costs.

The importance of establishing equitable and realistic “excessive” trucking wait time tariffs is
further underscored by the impacts of the FMCSA’s Hours of Service (HOS) restrictions setting
strict limits on driver work and rest hours. Port congestion/terminal delays already serve to
reduce driver total work hours thereby reducing the number of revenue paying turns/loads the
driver needs to make to “pay the bills”. HOS work-duty restrictions put additional strict
parameters on the amount of time drivers can be “on duty” which includes the time drivers are
waiting to get into the port or and waiting for equipment to be located and loaded. This imposed
regulatory work hour limitation obviously adds urgency to the need to better track and manage
truck movement in and around the port complex and provide a more equitable excessive wait
time compensation for port dray drivers.



advance that they cannot clear the cargo within the free time constraints, And in an ever growing
number of instances truckers cannot make the required pickups on time because slow terminal
gate processing has produced long lines outside the gate that effectively prevents on time
container pickup.

In addition, gate congestions also prevents truckers from returning empty containers within post-
delivery free time allowances which then trigger exorbitant/excessive per diem charges which
are paid by the motor carrier to the ocean carriers.

e From our truckers’ perspective, we ask the Commission to review the efficacy of
this “free time” process and its impact on the flow of containerized cargo. We
certainly believe that terminals should not be allowed to collect fees when the
terminal does not have the ability to actually move the cargo prior to free time
expiration and not when slow gate processing and long waiting lines prevent the
trucker from picking up a container, nor should the ocean carriers access late per
diem fees when terminal gate congestion prevents on time container returns by the
motor carrier.

e We likewise recommend that the Commission consider ways to encourage ocean
carriers to spread out arrival times so that cargo volumes do not overload terminal
capacity.

Chassis Ownership and Deployment

The chassis as an intermodal utility has been and continues to be essential to the movement of
freight supporting U.S. global container commerce. Since the introduction in 1956 of
containerized intermodal shipping in the United States, foreign based ocean carriers providing
regularly scheduled liner service generally provided chassis for importers and exporters and their
motor carrier transporters that pick up and deliver container cargo at ports and inland intermodal
terminals. In this historic chassis provisioning model motor carriers/truckers thus utilized ocean
carrier provided chassis and were not charged daily chassis rental fees - the use rate for the
equipment was basically included in the containerized freight delivered price negotiated between
the ocean carriers and their customers/shippers.

Beginning in 2009 / 2010, however, ocean carriers began to individually announce that, as of a
date certain they would no longer furnish chassis for cargo shipments. One ocean carrier
thereafter split off its chassis operation and began charging motor carriers a daily rental fee for
chassis use. Other ocean carriers issued releases advising motor carriers that its chassis were sold
and henceforth motor carriers should use chassis provided by the specific purchaser and the
chassis rental rate was also already set and provided in the announcements. These “getting out of
the chassis supply business” announcements were and continue to be made in a random fashion
and include many operating and rate exceptions by geographic locations, trade lanes, common
carriage, contract carriage, store door service, intermodal and port to port service.

Historically, terms and charges for the use of the container and chassis were specified in liner
tariffs and/or service contracts between the ocean carrier and the shipper. For motor carrier
transport, most ocean carriers utilized the intermodal industry’s standard interchange agreement-
the Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) with added



The following comments and observations hopefully will be helpful in this
process.

Truck Gate/Wait Times

It is common practice for ports to start the measurement of in and out time (turn
time) when a driver reaches the in interchange booth, which means time waiting
in line to get to the in interchange booth is not measured. This practice skews the
actual process time considerably, and creates considerable driver dissatisfaction,
and motor carrier economic loss. AT Bulldog we measure our operational cost on
a per hour basis based against our known hourly operating cost. It is common to
see extreme variations in this measurement from week to week of up to 20%
deviation. Bulldog’s drivers are paid on an hourly production and safety matrix
based off of their prior month performance. This hourly compensation ranges
from $18 per hour to $23 per hour, which means because of port inefficiencies
our drivers as well as our company is being monetarily effected. These
inefficiencies are not just at the port but extend to warehouses, rail ramps,
container repair facilities, and most noticeably on our states overly congested
highways. Another huge factor in port terminal turn time has to do with the road
readiness of the steamship line and chassis providers equipment, as well as the
availability of this equipment. Motor carriers routinely find themselves draying
equipment to on dock repair shops to have another party’s equipment made safe
and DOT road ready. We find this to be a major loss of productivity and another
economic burden to the motor carrier. Of course the motor carrier is not
compensated for draying bad order equipment to on dock repair, neither is the
motor carrier compensated for delay time at the port. The gate operations in
Charleston shut down for lunch rather than offering continuous service by
alternating gate personnel, this creates a backup of trucks and the loss of
approximately one half hour of truck production. Additionally drivers will line up
in a specific lane to work through the gate process and while in line and without
notice or warning have that line shut down causing the driver to fall out of that
line and take the last position in another line. Once again this causes driver
frustration. This might be avoided by simply putting out a sign behind the last
truck that will be serviced in a given line before the lane closes. Additional
container handling equipment is needed at peak times to maintain reasonable
production. We have also observed that Monday truck productivity is reduced



My name is Phil Byrd, and | am the President and Chief Executive Officer of
Bulldog Hiway Express. Bulldog is a 55 year old asset based trucking firm
domiciled here in Charleston, SC. Our company has four operating units, flatbed
long haul, specialized heavy haul, contract dedicated, and intermodal. Bulldog’s
intermodal division primarily serves the ports of Charleston, SC and Savannah,
GA. In Charleston we typically make 500 container drayage moves per day,
Monday through Friday. We perform this service for numerous customers with
the use of 80 assigned company trucks. Each of these trucks utilize state of the
art technology to garner operational efficiencies, such as computerized dispatch,
vehicle tracking, enhanced communications capability, and two way radio
communications. Our trucks are staffed by experienced, well trained professional
commercial drivers that have on average 18 years of container drayage
experience.

lam also the Immediate Past Chairman of the American Trucking Associations
(ATA). ATA is the trucking industries leading voice of representation for safety,
advocacy, essentiality, sustainability, and research. Having been intimately
involved in leading ATA over the last five years | am keenly aware of the industry’s
most alarming issue, currently and well into our future, the looming “driver
shortage”. ATA has studied this issue extensively and predicts that by the year
2022 there will be a shortage of 239,000 drivers. Further study has indicated that
over the next ten years the industry will need to add 96,000 drivers per year, just
shy of one million new drivers, just to provide our economy with the capacity of
today. The American trucking industry current moves 68.5 percent of the total
tonnage manufactured, imported, exported and distributed in the US. This
percentage is projected to go to 72.5 percent over the next 10 years. Being of
knowledge and in possession of such alarming data makes these discussions
extremely timely. Productivity is in large part driven by efficiencies up and down
the logistics supply chain. Therefore it is critical that all types of congestion and
causes of loss productivity be thoroughly studied and remedied.

My comments to this body are not to be taken as negative criticism of the South
Carolina State Port Authority. | have worked closely for decades with all aspects
of the SCSPA and know that they are eager to increase volumes across their docks
and through their gates, which means continually improving truck productivity.



Commissioner Khouri, members of the Commission, I very much appreciate the opportunity to
participate today in Public Forum-South Atlantic Ports. As you recall when I provided a truck
congestion update during the Commission’s June 18 business meeting, I advised that because of
the Federal Maritime Commission’s (FMC) broad regulatory marine transportation oversight
responsibilities, the intermodal motor carrier members of the American Trucking Associations
(ATA) believed that the Commission could exercise a very constructive role in identifying
problems and facilitating discussions among port transportation stakeholders and other
government entities that ultimately could solve or at least mitigate the growing economic harm
caused by what most believe is the port congestion crisis. We are therefore most encouraged that
you have fully embraced this proactive leadership role and with this meeting will have conducted
3 of 4 planned fact finding events!

It is also clear from both the level of participation and quality of discussion that have already
taken place under this broad FMC initiative that a clearer consensus is being formed among the
container transport sector stakeholders on the issues and factors that are contributing to this
unprecedented port congestion problem. Most importantly, there is also a consensus forming that
in order to solve the congestion problem all stakeholders-and certainly not just the trucking
community- must take responsibility for various aspects of the container —supply chain process
and bear some share of the pain/inconvenience/ financial costs that it is going to take to address
and solve the ongoing and worsening port congestion problem.

My name is Curtis Whalen and I am the executive director of the American Trucking
Associations’ (ATA) Intermodal Motor Carriers Conference (IMCC). The IMCC is an affiliated
conference within the ATA and is open to all ATA member companies engaged in intermodal
truck transportation or businesses and services supporting intermodal transportation. ATA is a
federation of affiliated state trucking associations, conferences and organizations that includes
more than 37,000 motor carrier members representing every type and class of motor carrier in
the country.

As you know, over the last year there has been an increase in port congestion levels in many
locations that, unfortunately, appears to be systemic in nature and contains such diverse
operational elements that collectively do not appear to present a readily identified process or
focal point for developing needed solutions. Indeed, maritime transportation stakeholder groups
and various industry, local, state and federal entities have been in what seems to be constant
formal and informal discussions on how best to address and mitigate port congestion impacts that
have become all too common at a growing number of America’s key ports. Unfortunately, these
discussions have not yet produced operational improvements and in some regions congestion is
now being described as “unprecedented” or “the worst in decades”.

Congestion elements identified and discuss include: better, more accurate and efficient gate entry
data processing; more labor and dock related equipment; trucker appointment or reservation
systems; staggering ship arrivals to prevent “bunching”; extended hours for terminal operations
and weekend operations; and suspension of demurrage, per diem and other fees ordinarily levied

2



In addition, the wait time and federal HOS regulations clearly will impact and limit a port’s
effort to address overall system delays i.e. congestion solutions like extended gates hours or
Saturday operations may well not be feasible if the drivers have already legally run out of hours
while waiting to get into and out of the port.

Finally, concerning the issue of better use of data to address/manage port congestion, it should be
noted that data streams currently generated by the deployment of RFID tags could be routinely
made available to motor carriers in real time and would help truckers avoid more congested gates
and routes as they make their driver dispatch decisions. Unfortunately, this is not being routinely
done most ports and motor carriers are not able to utilize available data sources which would
allow them to maximize driver use of on duty hours and provide ports/terminals with some
additional flexibility in the search for congestion mitigation solutions.

¢ We therefore urge the Commission to review the efficacy of tariff filings covering
excessive wait time compensation and to encourage terminals to make RFID and
other real time traffic and gate congestion information available to motor carriers
so they can maximize driver use of on duty hours including available data from
readers positioned outside the gate.

Container Facility Overload

Key facts to consider in understanding and potentially mitigating the growing instances of port
congestion are: ocean vessels are getting larger; shipping alliances are being formed; and greater
volumes of containers are being delivered on a single port visit or within a very narrow time
frame. Shipping alliances are now particularly being identified as exacerbating the port cargo
congestion problem by causing a fragmentation in freight delivery destinations which lowers
efficient movement density particularly for intermodal rail movements.

Vessel arrivals also continue to often be bunched which results in thousands of containers being
discharged for truck transport in a very short period of time. Under current operational
procedures, once the vessel(s) have been off loaded and the freight discharged, the container
“free time” clock (example: 4 no charge “free days” to remove container from the port)
negotiated between ocean carriers and cargo owners starts, and serves to produce/force a trucker
and equipment scramble to identify, load and remove the containers before late fee demurrage
related charges are levied.

Obviously with the rush to avoid fees and move the cargo off premise in a set number of days,
truckers forced to line up and wait in long lines for many hours to pick up the containers and
chassis are now often “late” due to congestion impacts that are beyond their controls.
Nevertheless, cargo owners are being assessed late charges by the terminals, truckers are being
harassed and blamed by their customers for being late, and sometime truckers have to pay the
late fees themselves or perhaps lose a customer.

Moreover, container volumes today often exceed the volumes that the terminals’ equipment and
labor resources can actually move off the dock before free time expires. Under current operating
procedures described above, however, most terminals collect late fees even though they know in