Implementing Greater Efficiency, Environmental Impact Reduction and Improvements in Safety through Improving our Chassis Management Process

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Implementing Greater Efficiency, Environmental
Impact Reduction and Improvements in Safety
through Improving our Chassis Management Process
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Content of Presentation

• Overview of Direct Chassis Link Model
• Benefits to Industry (Efficient Operations,
  Environmental Benefits and Safety Benefits)

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Overview of Model - Basic Mechanics

• Truckers establish a commercial relationship with
  Direct Chassis Link
• Truckers establish a chassis interchange contract
  with Direct Chassis Link which can be obtained on
  the website www.chassislink.com
• Once in place, truckers are free to obtain
  chassis for use. No appointments are required
  for pick up or return of chassis
• At this time the main chassis pool location is
  Port Elizabeth, Berth 88, with additional
  locations posted on a daily basis (e.g.,
  Ironbound, Croxton/NS)
• Chassis use is based on a fee per day charge
  billed biweekly by DCLI
• Numerous other competitive leasing alternatives
  for truckers

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Overview of Model - Background and Objectives

• The basis for the changes to the previous chassis
  management process is rooted in the following
  needs and core missions of our company
• Increase efficiency and simplicity for our
  customers, our business partners, and us
  collectively
• Drive out avoidable cost
• Reduce the size of our environmental footprint
• Improve the safety of our operations for our
  staff, and those who engage in business with us
• Introduce and implement changes to business
  processes that benefit our customers (i.e.,
  truckers, terminals)
• Implement best practices used elsewhere in the
  world that are not widely utilized in US to
  improve container transport operations

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Benefits to Industry - Efficiency and Simplicity
for Terminals

• All users of services in NY/NJ have access to
  chassis for use from a common pool of equipment -
  creating efficiency and convenience
• Less storage of chassis on terminals frees up
  space for more efficient terminal operations
• Efficient Terminals will have improved gate times
  and a positive effect on Truckers Hours of
  Service.

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Benefits To Drayage Companies under
Chassis-Owning IEP Model

• Drayage Companies Avoid
• Fleet Capital Expense
• Cost of Land, Yard Space
• Positioning Costs
• Off Peak Storage
• Insurance Costs
• Maintenance Costs
• Offhire Costs
• Functions are responsibility of the Chassis
  owning IEP
• Truckers concentrate on core business, not
  equipment management

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Efficiency and Simplicity Benefits to Truckers

• Trucking efficiencies -
• Truckers can reduce time picking up chassis
• Truckers who have their own chassis (i.e., owned
  or from this pool) can get containers faster
• The chassis can be used for multiple purposes at
  the terminal, eliminating the need to have to
  wait in different lines for different purposes,
  constantly getting new equipment
• We believe that efficiencies will allow for
  increased daily turns and earnings for truckers
• This is borne out by statements received from the
  industry

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Environmental Benefits

• US Environmental Protection Agency (EPA)
  recommends common chassis approach
• More efficient operations save fuel and reduce
  air emissions
• Less idling
• Less creeping
• Fewer trips to get and drop chassis

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Environmental Benefits - continued

• Reducing fuel use reduces air emissions of
• Carbon dioxide CO2 is a greenhouse gas
• Fine particles PM has health effects
• Nitrogen oxides NOx has health effects and
  contributes to ground-level ozone
• Emissions reductions
• 2 to 4 in port areas (5 mile radius)
• Using US EPA DrayFLEET model

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Estimated emissions reductions per year Based
on US EPA DrayFLEET model and EPA Greenhouse Gas
Equivalencies Calculator
CO2 NOx PM
NY-NJ only gt850 tons gt9 tons gt0.2 tons
Maersk Line All US gt4,000 tons gt30 tons gt1 ton
National use all lines 50,000 to 70,000 tons 560 tons 12 tons
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CO2 Emissions reduction equivalents Based on US
EPA DrayFLEET model and EPA Greenhouse Gas
Equivalencies Calculator

• DCLI program could reduce the drayage carbon
  footprint in NY-NJ by at least 850 tons per year
• Equivalent to Carbon sequestered by over 20,000
  tree seedlings grown for 10 years
• Carbon sequestered annually by over 180 acres of
  pine or fir forests
• When implemented nationally, CO2 reductions are
  estimated to be over 4,000 tons.
• Equivalent to Carbon sequestered by 100,000 tree
  seedlings grown for 10 years
• Carbon sequestered annually by almost 900 acres
  of pine or fir forests
• If all drayage nationally switched to this model,
  the Carbon footprint of drayage (CO2 emissions)
  would be reduced by 50,000 to 70,000 tons.
• Equivalent to carbon dioxide used by over a
  million tree seedlings grown for 10 years, or the
  carbon sequestered annually by over 10,000 acres
  of pine or fir forests
• Equivalent to saving over 5 million gallons of
  gasoline

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Truck CO2 emissions
Fuel a truck with 2 drums of diesel (110 gal or
760 lbs)
Truck travels600 900 miles
Generates 1 ton CO2
How much is a ton of CO2?
or
or

.6m
1m
1m
Fills an average 1400 sq ft house
Block of dry ice about the size of a file cabinet
Fills about 8 containers
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Safety Benefits

• The new chassis fleet business model will improve
  safety by
• Reducing wear and tear on the equipment
• Fewer connects/disconnects
• Less congestion on/near the terminals
• No hunting for chassis
• Fewer chassis stored on terminal
• Better traffic flow
• Maintenance practices will not change
• Continued care for equipment condition and
  preventive maintenance

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11 WEEK OVERVIEW UPDATE

• 740 Drayage Firms in the Northeast and Ohio
  Valley have already registered and signed our
  interchange contract
• No disruption in service experienced at any of
  our operating terminals or in our customers
  supply chain
• Marine Rail Facilities very pleased with the
  initiative and support a national neutral chassis
  pool
• Contacted by several Port Authorities
  (lsa/lgb/sea/tac) interested in a similar model
  in their region
• Over 150 chassis a week have been used by draymen
  for non-ML/SAF activity which indicates the
  efficiency that we wanted to create
• Draymen have suggested the DCLI model benefits
  Hours of Service efficiencies. DCLI model may be
  a positive benefit to drayage community if
  current HOS is rolled back by Administration in
  2010.

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As a Customer of Direct Chassis Link

• Benefits as a Customer of Direct Chassis Link
  include the following
• Reduction in costs by reducing costs incidental
  to procuring chassis for single or multiple pick
  ups and deliveries
• Reduction in costs by utilizing chassis
  maintained under Direct Chassis Links
  world-class maintenance and repair capability
• Build and maintain a strong relationship with
  Direct Chassis Link at all levels of customer
  service and response to equipment quality
  concerns.

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Thank you