The logistics industry has a lot of various charges and today we are going over what is a chassis split fee. Different fees can impact the cost and efficiency of shipping, and chassis split fees represent a complication that shippers’ logistics providers must navigate.
Let’s review what they are, when they occur, and how they can influence the overall shipping process.
What is a Chassis Split Fee?
A chassis split fee is a charge that trucking companies bill when the container and its corresponding chassis are located in different places.
This is because additional logistics effort is required, as the trucking company must pick up the chassis from one location and transport it to the container’s location.
The fee covers the cost of this extra step in the transportation process and can range between $50 and $110.
Chassis splits are most likely to occur when a chassis is not readily available at the port or ramp where the container is located. In such cases, truckers then need to travel to a nearby chassis pool to pick up a chassis before proceeding to the container’s location.
This adds a step to the logistics process and introduces an additional cost that must be factored into the overall shipping expenses. Understanding when and why chassis split fees are applied is essential for anyone involved in the shipping industry, as it helps in planning, budgeting, and negotiating lower fees.
Why Am I Being Charged a Chassis Split Fee?
Chassis split fees can arise for several reasons. Understanding the most common causes can help you avoid them and save you money in your logistics operations.
Unavailable Chassis at Ports or Ramps
The main reason for a chassis split fee is the simple unavailability of a chassis at the port or ramp where the container is located. Ports and ramps can sometimes face chassis shortages due to high demand, logistical challenges, or management issues.
When this happens, truckers are forced to source a chassis from elsewhere, typically a designated chassis pool, which is often not located in the same place as the container.
Truckers Have to Travel to a Chassis Pool
When a chassis is not available on-site, truckers must make an additional trip to a nearby chassis pool. This journey incurs extra fuel, time, and labor costs.
The logistics of retrieving a chassis from a different location adds complexity to the shipping process, and the chassis split fee is a way for trucking companies to recoup these additional costs.
High Demand and Shortage of Equipment
The logistics and shipping industry can experience fluctuations in demand that impact the availability of equipment, including chassis. Peak shipping seasons, such as the run-up to major holidays or during special retail sales events like Black Friday, can exacerbate the shortage of available chassis.
When demand is greater than the supply, the likelihood of needing a chassis split goes up.
Impact on Shipping Timelines
Chassis splits can significantly affect shipping timelines. The extra time needed to secure a chassis from an external pool can delay the transportation of the container to its final destination. The delay becomes even greater when the chassis pool is far from the pickup location or port.
These delays can have a knock-on effect, potentially causing loaded containers to miss their scheduled departures and leading to further logistical complications and costs.
4 Ways to Prevent Chassis Split Fees
Avoiding chassis split fees can lead to notable cost savings and more efficient logistics operations. There are several strategies you can use to reduce the likelihood of incurring these fees.
1. Acquire Your Own Chassis Fleet
One of the most straightforward methods to avoid chassis split fees is to invest in your own chassis fleet. This approach works particularly well for companies with the money and space to maintain such a fleet.
Having a dedicated fleet ensures that a chassis is always available when and where you need it, removing the need for splits. Owning your chassis also allows for greater control over your logistics operations, especially during peak seasons when demand is high.
2. Partner with a Carrier or Drayman who owns their Private Chassis
Acquiring a fleet is not cheap and may not be in the cards for many businesses. Luckily, there are many other options to consider. You can collaborate with a carrier that owns its chassis fleet, reducing the need for chassis splits.
These carriers can be highly sought after for the peace of mind knowing that they likely have a chassis on-hand when you need it most. By taking responsibility for the entire transportation process, these carriers can ensure that chassis split fees are avoided, often without charging extra for the service.
However, it’s important to note that it’s very common for rail ramps to charge these carriers “lift” and “flip” fees when they bring in their own private chassis.
The best way to find the best carriers at the lowest cost, shippers and forwarders use Draydex.
3. Leverage Customized Chassis
Customizing chassis to handle specific types of cargo or to accommodate multiple loads can also help in avoiding chassis split fees. This approach allows you to use a single chassis for various shipment types, improving efficiency and reducing the need to source different chassis from multiple locations.
However, it’s important to consider that the initial investment and ongoing maintenance costs for specialized chassis can be substantial.
4. Collaborate with a Professional 3PL or Logistics Partner
For businesses that may not have the resources to invest in their own chassis fleet or customized equipment, working with a professional Third-Party Logistics (3PL) provider or logistics partner can be an effective strategy.
These partners can leverage their networks and resources to prevent chassis splits, thereby saving their clients from incurring additional fees.
We Can Help Lower Costs & Improve Efficiency
Shippers and forwarders trust Freight Management Inc. as their 3PL and love using their proprietary tech called Draydex. See how much time and money you can save while setting and monitoring your drayage containers and chassis trailers.