Norfolk Southern is seeking to quickly repair potentially defective chassis across its network.
About 5,100 chassis could be defective. Although Jeff Heller, NS vice president of intermodal and automotive, notified customers of the potential defect in a June 18 letter, NS says it is still working on repairing the chassis on its network as of early July.
“Norfolk Southern will continue to take the necessary actions to address the reduced chassis supply across the network. We are working to complete repairs as quickly as possible to minimize the impact to our customers and our business,” NS (NYSE: NSC) said in a Thursday statement to FreightWaves.
The chassis repairs come as ocean carrier Maersk continues to report terminal congestion among the many U.S. ports its customers use (see below).
According to Heller’s letter, the NSPZ 16 chassis were found to be light on grease in the wheelends, resulting in wheel bearings that have failed. Since the worst-case scenario involves a wheel set separating from the chassis, NS is inspecting and repairing all chassis in this series “out of an abundance of caution,” Heller said.
“We understand that this is a significant business interruption, but the safety of our customers, drivers, the public and our employees is of paramount importance,” Heller said. “We believe this course of action minimizes both the business impact and the risk of an incident.”
NS has found additional repair capacity in markets such as Chicago, Atlanta, eastern Pennsylvania and New Jersey, in addition to using its normal equipment vendors.
While chassis can be repaired in as little as four and a half hours if there is adequate crew and materials available, it could take as much as two to three days for chassis that would need to be drayed or moved to an offsite repair facility, Heller said.
NS asked customers to return containers that are outside of its terminals to the closest intermodal terminal.
The chassis repairs come as NS plans to increase some of its accessorial charges as a means “to increase equipment availability for our customers through improved container utilization and faster equipment velocity,” according to a Tuesday service advisory.
Heller’s June 18 letter to customers also precedes the railroad’s filing to the Surface Transportation Board, in which NS describes how it is leasing additional chassis to ease current shortages impacting the company’s domestic intermodal operations and to meet expected demand increases.
NS expects the additional chassis to start arriving in September, NS said in a June 18 letter to STB. The board had asked the Class I railroads to describe how they each plan to manage fall peak, and the June 18 letter signed by NS President and CEO Jim Squires was NS’ response.
“In the meantime, we are actively moving chassis from surplus locations to deficit locations and we are working with an additional supplier to share chassis in challenging markets,” Squires said. “We will continue to monitor our equipment levels and adjust them to respond to changes in business conditions as needed.”
Maersk continues to see terminal congestion
NS’ issues with chassis come as portions of the U.S. supply chain network remain under stress, particularly at the ports and terminals.
In a customer advisory last Tuesday, ocean carrier Maersk noted chassis and car shortages at ports on both the East and West coasts.
Maersk said it is working with BNSF (NYSE: BRK.B) on car shortages at the ports of Long Beach and Los Angeles, while a chassis shortage in Chicago remains “a major concern” and constricts vendor capacity.
The company and the railroads have been urging customers to pick up containers in order to reduce dwell time at terminals and intermodal facilities as well as clear terminal ramps served by CN (NYSE: CNI), Canadian Pacific (NYSE: CP) and Florida East Coast Railway.
Maersk also noted that CSX is continuing to target dwelling containers at CSX ramps, and although progress has been made to address the congestion, “we must continue to push imports out,” said Maersk. CSX is experiencing high congestion in Indianapolis and Memphis and Nashville, Tennessee, with chassis availability challenges stymieing dwell time in Cleveland, according to Maersk.
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