Truck chassis are the trailers that trucks use to move shipping containers. One of the many problems facing supply chains has been a chassis shortage.
American companies have been unable to purchase enough chassis to meet their needs partly because the federal government instituted a combination of tariffs and duties in 2021 that amount to an effective ban on importing truck chassis from China, where the world’s largest truck-chassis manufacturer is located. Domestic manufacturers were left to pick up the slack.
I wrote against these tariffs in November 2021. In that article, I said that domestic manufacturers were struggling to meet America’s chassis needs, and orders would only begin to be delivered in the second half of 2022.
Well, it’s the second half of 2022, and domestic chassis manufacturers are still behind.
The Journal of Commerce reports:
North American chassis manufacturers have run into production delays in 2022 for the second consecutive year, slowed by difficulties in sourcing raw components and retaining factory workers, which means widespread shortages of marine chassis may persist until 2024 . . .
Lessors and equipment pools have ordered at least 50,000 marine chassis from US and foreign manufacturers due to be delivered this year, according to a JOC.com estimate, but manufacturers say they will fall well short of that number. Exact figures on the overall US chassis fleet are not available, but lessors and equipment pools have historically registered between 35,000 and 75,000 new marine chassis per year with US government agencies, according to conversations with chassis manufacturers and lessors.
Dave Manning, CEO of the North American Chassis Pool Cooperative, which owns chassis manufacturer Pratt Intermodal, said orders due to be delivered this year will be pushed into 2023 and orders for next year into 2024.
“Nobody is hitting the targets that they thought they would this year, and so the goal of getting on top of the chassis shortage by 2023 is probably moving more into 2024, even though chassis are being added every week,” he told JOC.com in late July. “I believe it’ll be 2024 before we start to feel there’s an adequate supply of marine chassis.”
It turns out that it’s really hard to make something in a different country just because government decides it wants it made there. “According to chassis manufacturers, the construction of a single chassis requires raw materials and subcomponents from between 20 and 30 separate suppliers,” the JOC story says. Those suppliers have been unable to meet producers’ needs.
Chassis manufacturers have been finding it difficult to hire and retain factory workers. “Many of the new employees the company [Pratt Intermodal] hired in 2022 quit after completing their training, and long-time veterans have become wary of rejoining a sector with a history of cutting jobs at the first sign of a downturn,” the story says. Politicians often yearn for the return of manufacturing jobs to America, but American workers seem less enthusiastic.
And the Chinese company that’s the largest chassis manufacturer in the world, CIMC, didn’t just give up. It has started producing some chassis parts for the U.S. market in Thailand instead, to get around the tariffs. CIMC’s U.S. subsidiary, CIE Manufacturing, has facilities in California and Virginia where it assembles chassis, but those facilities already existed years before the tariffs were put in place as part of the company’s strategy to focus more on the North American market.
The “make them here instead” mantra popular with politicians hasn’t worked for truck chassis. Americans in need of chassis have simply been stuck without them in many cases, and it looks like many will continue to be without them for at least the next year and a half.
Industrial policy in action.
Editor’s note (August 16): This post has been updated to clarify that CIE Manufacturing obtains some chassis parts from Thailand, not entire chassis.