In Capacity Crisis, Fleets Struggle to Find Equipment

A strong freight market and manufacturer backlogs have ignited demand for leased equipment from fleets far surpassing supply. This extraordinary demand could continue to outstrip supply well into 2022, especially for intermodal chassis and trailers.

As one of the largest- and fastest-growing transportation equipment lessors in the U.S., with over 95,000 trailers, intermodal chassis and domestic containers, Milestone is working to help fleets meet their demand for leased equipment in 2022. 

Chasing down chassis

Shipping containers are continuing to pile up at ports and railyards. The root of the problem is a shortage of intermodal chassis. 

"Under normal market conditions, Milestone would have 800 to 1,000 chassis available for rent each day from our locations near port terminals and railyards nationwide," said Doug Hoehn, Milestone's executive vice president of the marine chassis division. "However, due to the increased demand, we now have fewer than 30 units available daily." 

In addition, fleets that normally rent chassis for 3-5 days at a time are holding onto these units for 90 days or more to try to meet demand, further limiting supply, Hoehn noted.

This demand surge has coincided with a significant decrease in new chassis production. Earlier this year, the United States International Trade Commission levied a tariff on chassis imports from China that cut out 40,000 new chassis from the U.S. supply. American chassis manufacturers have not kept up with demand. 

"Milestone has more than 4,000 chassis on order through the third quarter of 2021; however, delivery of these chassis have been extended out by American manufacturers to the mid-2022," said Hoehn.

In response to the chassis production challenges with American manufacturers, Milestone is sourcing chassis from Canada, Mexico and other international sources. This will enable Milestone to continue to make significant investments in new chassis to meet demand.

Finding trailer capacity

Trailer manufacturers in the U.S. are experiencing limited production due to supply chain issues impacting component delivery and pricing, and a shortage of workers. The result is manufacturers are only able to produce a supply of trailers that barely meets asset replacement cycles for fleets. 

This leaves fleets no other option for growth than holding onto owned trailers and rentals for longer periods. In normal conditions, fleets will rent dry van peak trailers for a few months at a time, usually between September and February. In 2021, many fleets kept their rentals all year long.

"We are working closely with our customers and suppliers during the unprecedented trailer demand," said Chuck Cannata, executive vice president and general manager of Milestone's highway division. "We are aggressively pursuing all viable trailer manufacturers to secure additional capacity to meet customer demand." 

Milestone has more than 61,000 dry vans, refrigerated and flatbed trailers in its Highway division. To help get customers trailers earlier, as soon as trailers are turned in, Milestone proactively reaches out to customers to notify them where units are available. 

Due to high demand, most customers are willing to pick up trailers from any one of our nearly 30 branches nationwide. "When a matching spec trailer becomes available, our customers will figure out a way to get it into their fleet," Cannata said.

Maximizing trailer capacity with SkyBitz

With trailers in short supply, Milestone is seeing more customers request assets installed with the SkyBitz Kinnect tracking systems. This solar-powered device functions as a local data hub by connecting with optional wireless sensors on the trailer via Bluetooth.

Fleets use the SkyBitz Insight portal for trailer management. Account Managers at Milestone are engaging customers to help them better use the data and insights from this portal to improve asset utilization, Cannata said.

Milestone is also seeing increased demand for the SkyBitz SkyCamera sensor, especially for fleets with drop-and-hook operations. Installed on the driver side near the rear door of a trailer, SkyCamera's volumetric sensor and artificial intelligence scan the entire floor and calculate the percentage of available cube and floor space.

This information helps fleet managers know the status of trailers at each location — loaded, unloaded and what percentage of capacity is available. This helps fleet managers optimally match equipment with loads, Cannata explains.

Flexible trailer optimization strategies

In addition to helping fleets use technology to improve asset utilization, Milestone is having strategic discussions with customers for trailer acquisition cycles.

Milestone can purchase current trailers from customers and then lease or rent them back, explains Cannata. This lease-back transaction frees up capital for fleets to use for new trailer purchases.

The flexible lease-back option helps fleets cycle out their used trailers while avoiding disruptions caused by production delays for replacement trailers, Cannata explains. "As fleets cycle out their trailers, they have the option to return them to any one of our branches at a time that works best for them."  

Investing in new equipment with manufacturers worldwide, using advanced tracking and volume technology, and exploring flexible trailer lease-back arrangements are examples of how Milestone is working with fleets to address capacity shortages that could persist well into 2022. Talk to the experts at SkyBitz to find out how you can combat capacity issues by improving asset utilization in your fleet.

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