Memphis-based IMC Companies will boost its haedcount to more than 1,000 drivers by acquiring Express America Trucking Inc.

IMC said Tuesday that it recently agreed to buy Express America and put the company’s president, Barry Bernard, in a leadership role at Intermodal Cartage Co., one of its units. Express America, founded in 2000 in Memphis, provides intermodal, truckload, flatbed and yard management services.

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With an aging U.S. chassis fleet many in the industry are wondering about chassis availability and capacities in the future. Five intermodal executives will be taking on the topic during IANA’s upcoming Intermodal Operations and Maintenance Seminar, being held at the Oak Brook Hills Marriott in Oak Brook, IL. The discussion, “Are We Facing a Chassis Replacement Cliff?” – An Aging Fleet Needing Investment,” is slated for Thursday afternoon, May 2.

Scheduled panelist Mark H. George, chairman of IMC Companies, told Intermodal Insights, “Yes, we are facing a ‘chassis cliff’. The average age of international chassis is somewhere in the neighborhood of 17 years.

“There are a few obvious reasons why little investment has been made in the supply of chassis,” George continued. “First, the gray pool has created more frequency in chassis utilization requiring fewer chassis, and, second, ocean carriers decided several years ago that they were going to exit chassis ownership, so why continue investing in new chassis? And, third, a global recession has hampered ocean carrier investment.

“It’s obvious that motor carriers will bear the cost of the chassis going forward. The ‘chassis cliff’ that I’m afraid of,” George said “is a very few leasing companies gaining control of the international chassis fleets and gray pools and leaving the motor carriers little choice or say in where chassis are sourced from.”

George noted that that is why IMC unit Intermodal Cartage Co. is a founding member of the North American Chassis Pool Cooperative, which intends to pool chassis together and become a contributor to the gray chassis pools, with its members having a say in the type of chassis they use and putting forth an “at-cost” chassis provisioning model.

Data obtained from the IANA Global Intermodal Equipment Registry support George’s statement on the age of the international chassis in particular.

As shown by the accompanying chart, 63 percent of domestic chassis in use today were built in 2002 or later while 64 percent of international chassis in use today were built in 2001 or earlier.

Steve Rubin, principal at Inter-Pro Advisory LLC, who is scheduled to moderate the session, noted that, with the lifetime of chassis being about 20 years, one might expect a turnover of 25 percent of the chassis fleet over a five-year period. However, only 2 percent of international chassis now in use were built in 2008 or later.

“This is going to be a real issue,” Rubin said. He also noted that the industry may have to look at refurbishing or remanufacturing of existing chassis to meet demand – but that presents the problem of having to take much-needed equipment out of service for several weeks.

Also perceiving a crisis – as well as a possible opportunity – is scheduled panelist Stuart James, vice president of sales at Hyundai Translead, which is engaged in a near-sourcing program building chassis in Mexico to help meet demand.

“As the steamship lines increase their emphasis on moving away from the traditional U.S. model where the line provides the chassis, and the draymen-truckers either can’t – or at least do not wish to – embrace the alternate model more common elsewhere in the world of the trucker providing the chassis,” said James, “much of the existing chassis fleet is at, or even beyond, tis theoretic useful life.”

“Add to this the fleet’s general state of obsolescence – no ABS, bias-ply tires, five-spoke wheels – we have to think that we’re marching toward a chassis capacity crisis,” James continued. “I don’t know who is going to step in with the massive investment that will be necessary, but this is truly one of those cases where you can view it as a crisis or as the opportunity of a career.”

“We’re beginning to see some of the front-line, best managed over-the-road truckers now paying some attention to chassis,” he concluded. “They understand the benefits of the intermodal line haul in 53 foot domestic containers/chassis and I think are now looking at the drayage opportunity with new eyes. One thing for sure, the cargo will get delivered. Now, who takes the risk – that I don’t know.”

Slated to round out the session panel are Jordan Ayers, managing director of Quest Capital Group LLC, and Bernard J. Vaughan, executive vice president of law and administration for Flexi-Van Leasing Inc.

Vaughan commented, “There is no doubt that little investment has been made industry-wide into the international chassis fleet over the last five years.”

Vaughan cited similar reasons mentioned by George for the lack of investment but added that Flexi-Van has always been willing to build new equipment, as well as provide such “upgrades” as radial tires and ABS brakes.

“Our experience, however, is that, in the past, few have been willing to pay for the additional cost associated with the upgrades,” Vaughan said, noting that his firm is slowly seeing a change in that mentality.

“The slowdown in chassis investment in recent years was impacted in significant measure by the reticence of some entities to make additional capital investment while the industry was trying to right-size the U.S. chassis fleet to adequately reflect the efficiencies gained through chassis pooling,” Vaughan added. “Moreover, we were surprised somewhat by the accelerated pace of the ocean carriers’ divestiture of their chassis assets and the implementation of a new business model whereby the ocean carriers ceased providing chassis to their customers.”

The Surface Transportation Board has granted its permission for motor carriers to use co-op pools to acquire and share intermodal chassis.

The STB’s regulatory clearance brings the North American Chassis Pool Cooperative a step closer to operation. The NACPC was formed last October as a cooperative for drayage carriers that want to buy chassis for sharing in pools.

The co-op’s members are a small group of motor carrier companies that are also members of the ATA’s Intermodal Motor Carriers Conference.

Under federal law governing motor carriers, STB approval is required before motor carriers may “pool or divide traffic or services or any part of their earnings.”

The NACPC is the first motor carrier entity to seek and gain approval to operate within the evolving chassis pool marketplace.

Container ship lines have been disengaging from ownership and operation of chassis in the U.S. market, and encouraging a shift toward increased motor carrier responsibility for the equipment.

Organizers of the trucker chassis co-op say motor carriers want to retain a say in managing the chassis through participation in the pool, and to upgrade the quality of equipment they use.

Last fall, IMC Companies, a member of NACPC, purchased more than 1,500 intermodal chassis from ocean carrier OOCL (USA) and put them into Consolidated Chassis Management’s Mid-South co-op pool for dedicated use by OOCL.

The gradual shift of intermodal equipment control from ocean carrier to truckers advanced last week as an industry group formally created a chassis cooperative and drayage carrier, IMC Companies, purchased 1,520 units for use in an existing pool.
American Trucking Associations’ Intermodal Motor Carriers Conference founded the North American Chassis Pool Cooperative, or NACPC, for drayage truckers who want to buy chassis, Executive Director Curtis Whalen said.

Earlier this month, IMC became the first trucker to participate in the Consolidated Chassis Management pool, after buying the chassis from water carrier Orient Overseas Container Line.

The moves were the latest step in a transition that began three years ago after passage of a federal law making owners of chassis responsible for maintaining them in safe, roadworthy condition.

Maersk Inc., the largest ocean carrier, responded by carvin out a chassis rental unit, and since then 15 more of the largest ocean carriers have announced changes in their chassis strategy, forcing trucking companies to buy or rent chassis that used to be supplied free by the lines.

“This is a historic event for our company and industry in developing an industry solution to transition ownership of chassis from ocean carriers to other entities,” said Mark George, president of IMC Companies, Memphis, Tenn.

The new federal rules began to take effect in 2009, shifting responsibility for equipment condition from truckers to ocean carriers while chassis are on the road.

“This is a big first step,” Phil Wojeik, president of the CCM pool, told Transport Topics. “It is opening the door and taking a step toward a whole chassis paradigm with motor carriers taking more control as lines exit
chassis provision.”

IMC’s chassis were added to CCM’s Mid-South pool that includes Memphis and Nashville, Tenn.

Terms of the chassis purchase agreement weren’t announced.

CCM operates six pools and manages approximately 125,000 chassis. It’s owned by the Ocean Carrier Equipment Management Association, whose members have contributed chassis to the pool.

IMC operates five drayage carriers, in a total of nearly 40 locations from coast to coast. All of the chassis that IMC owns are roadworthy, and the fleet is younger on average than the CCM Pool, George said.

“I believe this is the most efficient and forward-thinking strategy for our industry – facilitating ocean carriers that choose to disengage their ownership, while ensuring that our mutual cargo-owner customers continue to have access to a reliable chassis fleet,” he added.

George told TT that IMC is having discussions with OOCL about transferring ownership of chassis in other pools.

“There is a lot of interest from many different stakeholders on where the industry is heading,” Wojeik said, adding he’s bad discussions with other, unidentified motor carriers about joining CCM’s pool. “The strength of the CCM Pool is that it is one solution that encompasses many different business approaches.”

Those approaches include ocean carriers’ past and planned equipment contributions to CCM’s pool as well as the potential addition of equipment from the IMC’s new chassis cooperative.

Curtis Whalen, executive director of the drayage carriers’ group, told TT that “we are working on the regulatory issues [relating to the cooperative] that have to be addressed in one form or another.”

Those issues include how to structure the group, so that it’s approved when the U.S. Justice Department reviews the proposal, Whalen said.

He said it’s also possible that the Surface Transportation Board will have to review the plan. U.S. freight railroads operate a railcar equipment pool through a company known as TTX, whose operation is overseen by the STB.

CCM is operating with the approval of the Federal Maritime Commission.

Whalen also said that moves such as IMC’s purchase of chassis for use in a pool could be a short term answer while members of his group map out plans that could lead to equipment ownership by the cooperative or individual motor carriers.

IMC has been working on a chassis transition plan since early this year. Asked how soon the cooperative could become operative, Whalen didn’t give a specific date.

“Time is somewhat of the essence,” he said. “Ocean carriers are getting out gradually. Some want to do that as soon as tomorrow. Some are a bit longer term.”

A motor carrier has purchased more than 1,500 intermodal chassis from OOCL (USA) and will put them into Consolidated Chassis Management’s Mid-South cooperative pool for use by OOCL.

The deal by IMC Companies is a major step in the continuing disengagement by container ship lines from owning and operating chassis in the U.S. market, and toward increased motor carrier responsibility for the equipment.

IMC Companies and other members of the American Trucking Associations’ Intermodal Motor Carrier Conference are studying creation of a motor carrier cooperative that would purchase chassis from ocean carriers.

The North American Chassis Pool Cooperative would contribute chassis to neutral pools such as CCM. Motor carriers have filed papers in Delaware for formation of the co-op as a limited liability company.

CCM, owned by 18 container ship lines, operates six regional cooperative pools. CCM received Federal Maritime Commission approval last year to accept chassis contributed by truckers and shippers as well as ocean carriers.

The U.S. is the only major nation where most chassis used for international shipments are owned or leased by ocean carriers. In Europe and Asia, chassis normally are provided by truckers, forwarders or shippers.

Ocean carriers for a decade have been moving to reduce their multibillion-dollar involvement in chassis. The process began with chassis pools such as those operated by CCM, which was formed in 2005.

In 2009, Maersk Line transferred its chassis fleet to newly formed Direct ChassisLink Inc., which rents equipment to truckers by the day. Since the creation of DCLI, now owned by private equity firm Littlejohn, most major ocean carriers have quit providing free chassis in some or all locations.

IMC Companies is the first motor carrier to execute an operating agreement with CCM’s regional pools. The chassis IMC Companies has acquired will be dedicated to OOCL’s use in CCM’s Memphis-based Mid-South pool.

“This is an historic event for our company and industry in developing an industry solution to transition ownership of chassis from ocean carriers to other entities,” IMC Companies Chairman Mark H. George said in announcing the deal.

George said IMC is part of the ATA group studying creation of a motor carrier co-op that would “acquire ocean carriers’ chassis and then contribute those chassis back into the CCM gray pool model.”

“Simply said, the cooperative’s desire would be to replace ocean carrier or other owning entities’ ownership with NACPC ownership and to have an active ‘say’ in managing the chassis through participation in a CCM pool,” George said in a statement.

Curtis Whalen, executive director of the ATA’s Intermodal Motor Carrier Conference, said truckers want to improve the quality of chassis. Motor carriers complain constantly about old equipment and poor maintenance by ocean carriers.

The move by ocean carriers to reduce their role in chassis supply gained momentum after the Federal Motor Carrier Safety Administration implemented changes that made equipment owners instead of trucking companies responsible for chassis safety while on the road.

Steve Rubin, a former TRAC Intermodal executive and now a consultant who was lead author of a recent Transportation Research Board study of chassis, said truckers will face higher rental costs during the next few years as aging chassis must be replaced.

The average life of chassis is about 20 years and the U.S. international chassis fleet will average 18 years by the end of 2015, Rubin said. “There’s a replacement-cycle cliff coming up,” he said.

As the chassis supply model continues to evolve, truckers want to ensure their needs aren’t ignored, Whalen said. “We need to do something to get better input into the process,” he said. “We also need to upgrade the nature of the chassis we depend on. We’ve always said we thought chassis were not maintained as well as we would maintain them.”

From the Memphis Business Journal -

Company: National Drayage Services LLC

Leadership: Christopher Moore, president; James Frederick, vice president of sales & business development; Greg Woitesek, director of client support; Mike Rogers, director of safety & compliance

What it does: Transportation of international containerized cargo

2011 Revenue: $19.2 million

Employees: 48

Source of startup capital: IMC Companies

Website: www.NDSV.com

How’s business?: Agressively growing

Biggest challenge at the moment: Managing the expansions while maintaining the high level of service we desire for existing locaitons

What will change in the next year?: In 2012, we are on pace to add more new locations in a single year than prior years

How do you measure success?: The bottom line on the financial reports is clearly important. But haivng the ability to go home at night and rest easy knowing that we gave our all toward doing the best job possible helps make each day successful as well.

Reason for starting: Opportunity. The market had a need for a new entrant that could preform similar services, but with much better support and value.

Most difficult part of decision: Implementing the business plan. Having a vision and a paper business plan was the easy part.

Biggest strength: Reputation and relationships

Biggest weakness: We’re still relatively young as a company and our growing pains are quite painful at times

Biggest risks: Starting a trucking company in 2008, during the middle of the worst economic conditions since the Great Depression.

Smartest move: During our first 18 months, spending an abundance of time and money building our foundation, which was as important as building revenue. This has enabled us to maintain our agressive growth strategy during the last few years.

Biggest worry: Service failures – failing to support our clients at the high level we desire

Turning point: 2009 and 2011 were critical turning points for NDS because in both years we had unique expansions that further catapulated our growth trend.

What do you wish you had known from Day 1? – It’s OK to say “no.” You’ll never be able to do everything or please everyone. And trying will most assuredly result in failure.

Key goal to achieve: We do not yet have a location in all of the major port and rail cities. We’re getting closer, but not quite there yet.

What’s in the short-term future?: Finishing our two California expansions, which we’re in the process of right now (Los Angeles and Oakland). Then hopefully Miami and the port of New York/New Jersey will be next before the end of the year.

Five-year plan: Exceed truck count of 700 and sales of $100 million annually

The companies will contribute to the Partnership’s savings of 1.5 billion gallons of fuel, $3.6 billion in fuel costs, 14.7 MMT of carbon dioxide (CO2), 215,000 tons of oxides of nitrogen (NOx) and 8,000 tons of particulate matter.  Carbon dioxide is the most common greenhouse gas, and nitrogen oxide is an air pollutant that contributes to smog.  By joining SmartWay Transport Partnership, IMC Companies demonstrates its strong environmental leadership and corporate responsibility.

“At IMC Companies, we are constantly searching for ways to provide our clients with quality service while ensuring our output minimally impacts the environment,” said IMC Companies chairman Mark H. George. “We felt our mission tied in perfectly with the goals of the SmartWay Transport Partnership, and we look forward to doing our part to reduce our carbon footprint. We are confident that this partnership will benefit the environment and, in turn, our customers for many years to come.”

Developed jointly in early 2003 by EPA and Charter Partners represented by industry stakeholders, environmental groups, American Trucking Associations and Business for Social Responsibility, this program was launched in 2004. Partners rely upon SmartWay tools and approaches to track and reduce emissions and fuel use from goods movement. The Partnership currently has over 3,000 partners. For information about the SmartWay Transport Partnership, visit www.epa.gov/smartway.

About IMC Companies:

IMC Companies is a national network of trucking transport and support businesses, providing local and regional services of international and domestic containers; chassis and container maintenance and repair; full service container depots and secured container storage; hazardous material shipments; reefer service, fueling and protection; roadside repair services; and rail terminal operations. To learn more about IMC Companies family of brands, visit www.imccompanies.com.

On Wednesday, April 4, 2012, more than 100 IMC Companies team members participated in the company’s 6th Annual “Walk-at-Work Day,” in which the IMC team and their families took time to explore the company’s 1.5-mile walking trail on a beautiful day. Fruit and water were served at the start of the trail, and healthy box lunches from Subway were provided at the gazebo at the trail’s end. It was a “Jeans Day,” allowing employees to be comfortable during their walk. While this trail was perfect for the annual “Walk-at-Work”Day, IMC Companies chairman, Mark George, built the 1.5-mile trail at the company’s East Holmes Road location for himself and his team members to utilize year-round.

“Taking time to focus on fitness and enjoy the outdoors is something that is important to me, not only as a company leader, but as an individual,” George remarked.“We built the trail through our property alongside a lake and over hills into the back of our property. It gives our team members a chance to take an all-important break to connect with nature and increase circulation and health.”

Other team members also see the value in the event and the trail.

“We do this each year to encourage our people to enjoy the outdoors and be healthy,” said Katie George Hooser, who is in charge of business development at Intermodal Cartage, one of the IMC Companies family of brands. “We want to ensure that, in our industry, our team members work to prevent common health issues such as heart disease. In fact, we partner with the American Heart Association to raise awareness of potential risks for heart disease, acting as a key sponsor for the Heart Walk for several years. ‘Walk-at-Work’ Day is part of our effort to make sure we incorporate health, wellness and nature into our workplace.”

Hooser noted that she and others often have “walking meetings” along the trail, enjoying the scenery while collaborating on work-related projects.

Intermodal Cartage employee Brett Henley said he walked six laps during last year’s “Walk-at-Work Day” out of pure desire to be outside, in nature.

“I love doing this,” he said of the event. “I don’t have to think too hard about exercising, and I can make people smile as we pass each other on the trail. It’s a real joy.”

Also participating at the“Walk-at-Work” Day were team members of Inland Intermodal Logistics Services, LLC, a company that provides administrative services to IMC Companies, and team members of River City Capital Leasing, a company that leases trucks to IMC Companies.

IMC Companies is a national intermodal logistics specialist focused on international shipments. Its companies include Atlantic Intermodal Services; Intermodal Cartage; Gulf Intermodal Services; National Drayage Services; DNJ Intermodal Services; and Frederick Intermodal. For more information on the IMC Companies family of brands, visit www.imccompanies.com.

From the Memphis Buisness Journal -

 An increase in container traffic is leading drayage operations, both locally and nationally, to expand.

Old Dominion Freight Line Inc. has opened a new container drayage site in Memphis, and Memphis-based National Drayage Services LLC is planning to double its business by the end of the year with new locations across the country.

The Intermodal Association of North America reports annual rail intermodal volume of 13.3 million containers and trailers in 2010, a 14.7 percent increase compared to 11.6 million in 2009.

Old Dominion, which is mainly known for its less-than-truckload operations, has been doing drayage business since the early 1960s. The drayage division mainly moves the ocean-going or rail containers to and from the ports, rails or container yards.

“With the response of the economy last year and continuing this year, at least from a transportation standpoint, we’ve decided to pick up where we left off in 2008, when we were putting together expansion plans,” Wayne Bersch, director of container operations for Old Dominion, says. “We started with Memphis because it is known throughout the United States, and probably the world, as being a transportation hub.”

The new drayage operation is located within Old Dominion’s 18.3-acre site at 3050 Carrier St., which also provides less-than-truckload and truckload domestic and international shipping services. The new service won’t mean new buildings on the site.

“Old Dominion typically overbuilds facilities to allow for growth,” Bersch says.

The service center, which has been in Memphis for more than 25 years, has 169 doors to handle shipments and currently employs 281.

The drayage facility will be staffed with five owner-operators at the start. Old Dominion is expecting to have 25 owner-operators by May 2012.

“The container drayage business is mostly owner-operators, which affords you a great opportunity to grow it quickly as well as shrink it as you need to,” Bersch says. “It really gives you a lot of flexibility.”

Bersch says Old Dominion likes Memphis’ central location, as well as its five Class I railroads, which the Association of American Railroads define as a railroad with operating revenue of more than $378.8 million.

“In Memphis, our focus is going to be on rail yards, but much of that rail business originates on ships,” he says.

What has been driving its decision to grow drayage operations has been strong imports into the U.S. as well as the export business showing signs of life. Exports typically move through containers, leading to an upsurge in domestic rail.

“We continue to see that as a growth market and we want to be part of that,” Bersch says.

National Drayage Services is looking to ride that wave as well.

The company has opened locations in Houston, Dallas, New Orleans and Mobile, Ala., so far in 2011. This growth brings it to 11 total locations across the country.

The company hopes to add Los Angeles, Oakland, Calif., and El Paso, Texas, locations in the third quarter.

“At the current pace we’re on, we could double in size this year, if not triple,” president Chris Moore says.

The company has 40 employees, not counting owner-operators.

Moore can see how Old Dominion and other companies would want to open or expand in Memphis, which has strong transportation assets.

Drayage business is driven by freight increasing.

“To me, it clearly seems the freight is coming back,” Moore says. “Consumption is up and more products are shipping. The gloom of a couple years ago is becoming more and more of a memory now.”

Christopher Moore, president of National Drayage Services, founded the company in 2008, in the middle of the recession. It was a risk that has paid off.

VITALS

Title: President

Company name: National Drayage Services LLC

What it does: Transportaion of international containerized freight

Employees: 40

Background: B.S. in economics/finance from Christian Brothers University

Age: 38

Company Website: www.ndsv.com

Most admired entrepeneurs: Anita Roddick, Henry Ford, Sarah Breedlove Mcwilliams Walker, Michael Dell, Mark George

BIG PICTURE

How’s business?: Feels like organized chaos, but no complaints. Things are going extremely well.

Biggest Challenge at the moment?: Managing our growth and expansions, while also tending to the normal daily business matters

What will change in the next year?: Our size due to growth, and hopefully the price of diesel fuel

How do you measure success?: Not like most people. The bottom line on financial reports is imprtant to measure so yu know where you stand. But I want to go home and rest each day knowing I gave everything I had to make NDS better.

BUSINESS MOVES

Reason for starting business: We saw a major opportunity. The market had a need for a unique service provider like we knew NDS would be. And the plan appears to be working out.

Most difficult part of decision: Preparing and executing the formal business plan

Biggest business strength: Reputation and relationships

Biggest Business weakness: Age. We’re still a very young company

Biggest risk: Starting a trucking company (which is already traditionally a tight margined business), but starting in the middle of the worst economic conditions in many decades

Biggest mistake: In some ways the timing of NDS couldn’t have been more perfect. But looking back, I would have loved to have seen us start this company two to three years earlier.

Smartest move: Investing much of our effords toward safety and compliance. It would be easy to solely focus on sales and growth. But dedicating efforts toward safety in the early stages has helped give us a firm foundation that we can grow on and it has reaped benefits on several fronts

Biggest Worry: I don’t worry about the external issues we can’t control. My biggest worries are th things we can control such as preventing mistakes and errors.

Turning Point: When we added the third and fourth location in the past year or two. It seems like the point in time was when the rubber met the road and we took off.

What do you wish you had known from Day 1?: There is so much I’ve learned that I wish I had known then. Most notably that it’s OK to say “no” and that it’s OK to take things slow sometimes.

WORK ROUTINE

Most challenging task: We’re in a service industry. The msot challenging thing we face is handling everyone’s needs at the speed they desire and the high-service level that we desire.

Favorite task: Making clients smile by resolving problems

Least favorite task: Telling a client or driver “no” or giving bad news.

Source of suuport in a business crisis: Psalm 121:1-2. If you get into any kind of crisis- be it business, family or financial- you bettter have more support than just something tangible or earthly.

DREAMS

Key goal to achieve: Having a truck count of 500 nationwide before our five-year anniversary and prior to my 40^th birthday.

What’s in the short-term future?: We need to finish substantiating the “National” in our company name by opening a couple of locations on the West Coast. Internally I refer to it as our own West Coast offense.

Five-year plan: Continue to rapidly grow and regularly refire our core proccesses and procedures to ensure our foundation is firmi

First Choice for a new career: Maybe politics some day. But for now I love exactly what I’m doing and can’t even imagine doing anything else.