The American Trucking Association Intermodal Motor Carriers Conference (IMCC) hailed a federal administrative judge’s ruling that would allow motor carriers to choose their own chassis as a “significant win” over ocean carriers.
The ruling, by a Federal Maritime Commission (FMC) administrative law judge, found that requiring motor carriers to use specific chassis providers to move containers violates the Shipping Act.
“This victory has been a long time coming,” said IMCC Executive Director Jonathan Eisen. “The decision is the first step in putting a stop to the practice of foreign-owned shipping lines forcing American drivers and motor carriers to use specific equipment providers to move goods – which will help reduce supply chain delays and cut costs for carriers and consumers.”
In 2020, the IMCC filed a complaint with the FMC against the Ocean Carrier Equipment Management Association, Consolidated Chassis Management, and other ocean carriers. That complaint alleged that the ocean carriers denied motor carriers the ability to choose their provider when leasing essential equipment, unjustly increasing trucking companies’ costs.
“The ocean carrier’s practices of prohibiting motor carriers from using the provider of their choice when they are paying for the chassis has held US motor carriers hostage and forced them to subsidize the shipping lines,” Eisen said. “We are pleased the judge agreed, and we look forward to ending these unreasonable and unjust practices permanently.”
The judge, Erin Wirth, said the case was large and complex, involving 13 parties, discovery from multiple non-parties, and well over a million pages of documents. Given the size and scope of the initial proceeding, the judge said, the ruling was limited.
“As an overview, relying primarily on Commission case law regarding exclusive agreements, this decision finds that preferred agreements, where a default chassis provider is selected but not required, are not necessarily unreasonable but that exclusive agreements, which prevent motor carriers from using the chassis provider of their choice for (merchant haulage), are unreasonable and violate the Shipping Act,” Wirth wrote. “In addition, the Commission has the authority to prevent regulated entities from withdrawing from interoperable pools, where multiple IEPs (non-party intermodal equipment providers) contribute chassis, although additional proceedings will be needed to determine any markets where this is appropriate.”