Structural changes in this market have yielded rapid price growth during the past three years; trucking companies have had to start paying for chassis that were once part of a bundled shipping service through ocean carriers
Los Angeles, CA (PRWEB) March 15, 2015
Chassis leasing has a buyer power score of 2.1 out of 5, indicating that buyers have low negotiating power. During the past three years, ongoing structural changes in the market have put trucking companies, the main users of chassis, at a disadvantage. According to IBISWorld analyst Hayden Shipp, the ocean carriers that once bundled chassis into their shipping services for free have been divesting them to reduce costs. Ocean carriers owned more than half of the chassis in the United States at the end of the recession, and many of those that they did not own they obtained through long-term leases and also provided to trucking companies for free. Currently, ocean carriers own a much smaller share of the country's chassis and have largely stopped leasing from this market's suppliers. As a result, the number of chassis provided to truckers for free has fallen sharply.
By necessity, trucking companies have recently become the main buyers of chassis leasing services, and lessors' business from ocean carriers has dropped, continues Shipp. Compared with ocean carriers, trucking companies are smaller and less able to exert pricing pressure on lessors. Trucking companies are also a greater credit risk, and generally do not pay for chassis as quickly as ocean carriers do. Finally, trucking companies prefer to rent chassis on a per-diem basis rather than obtain long-term leases because by renting they generally benefit from improved convenience and a lack of maintenance and repair (M&R) and storage costs. In addition to growth in trade volumes and industrial production, which have generated higher container volumes and raised demand for chassis, the structural changes in the market have resulted in strong price growth, reducing buyers' negotiating power.
Further detriments to negotiating power include the extremely high concentration of this market and the array of rental models at different ports. TRAC Intermodal, Flexi-Van Leasing and Direct ChassisLink dominate the market, drastically limiting a buyer's choice. Also, different major ports require buyers to navigate various models of chassis pools (e.g. pools managed by a single company and pools managed cooperatively by multiple companies). Under different models, lead times and rules for chassis pickup and drop off vary widely. For more information, visit IBISWorld’s Chassis Leasing procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of chassis leasing services. A chassis is a rectangular, wheeled steel frame that typically has eight tires attached. Trucking companies use chassis to transport intermodal containers over land between ocean-going vessels, railroad ramps, distribution centers, warehouses and other delivery points served by motor carriers. Services that suppliers offer include daily rentals from chassis pools, operating leases and finance leases. Buyers in this market are generally called lessees in this report, and are called renters in some cases to specify the subset of buyers that pay per-diem rates for chassis pool rentals.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.