- The Washington Times - Friday, December 3, 2021

The Biden administration could ease the supply chain crisis simply by removing the massive tariff it has slapped on a relatively obscure piece of trucking equipment imported from China, experts say, but the administration has refused to budge.

In May, the Commerce Department imposed a 221% tariff on Chinese trucking chassis. Truckers use these specialized trailers to deliver containers filled with all kinds of consumer goods to ports, rail yards and stores.

The tariff is on top of the 25% that the Trump administration levied on chassis from China, the world’s largest manufacturer. Combined, the tariffs add roughly $25,000 to the price of a chassis, which used to cost about $12,000.

The Commerce Department said the move was necessary because cheaper Chinese imports had devastated U.S. chassis manufacturers, resulting in the layoffs of hundreds of workers.

The tariff also created a chassis shortage, hindering truckers’ ability to move goods piling up at ports across the U.S.

Chassis moving out of the ports of Los Angeles and Long Beach plummeted 23% from April to September, according to data from Pool of Pools, an organization that tracks chassis movement.

“It’s a 220% tariff on a very important piece of the supply network, and just simply doing away with that tariff could do a massive amount of good very quickly,” Ryan Young, a senior fellow at the Competitive Enterprise Institute, said at a recent webinar. “This is bad news for the entire supply web.”

The White House did not respond to multiple requests for comment, but it said in a recent blog post that the ports of Los Angeles and Long Beach had cleared out 60,000 chassis and made a commitment to remove another 28,000.

A coalition of U.S. chassis manufacturers in October urged President Biden to resist pressure to remove the tariff. They said the tariff has enabled them to hire hundreds of people and increase their production capacity by 400%.

In a letter to Mr. Biden, the group characterized calls to lift the tariff as a “smokescreen” that is “misguided, wrong and should be rejected.”

“The way to solve [supply chain] problems is not on the backs of American manufacturers and their workers,” the group wrote. “Tragically, removing the tariffs will only cause more American workers to lose their jobs without fixing the root cause of the supply chain problems.

“This is no solution at all and would only serve to re-injure American manufacturers and their workers who suffered significant material injury at the hands of unfairly traded Chinese chassis,” the group said.

Still, the ramped-up production won’t produce enough chassis to meet the immediate demand, which is lagging by three months.

Exacerbating the chassis shortage is a labor shortage at ports. Hundreds of thousands of chassis are idling at ports across the country. Those chassis are being used to hold empty shipping containers while workers struggle to clear out the backlog.

Matt Schrap, CEO of the Harbor Trucking Association, which represents Southern California port truckers, said at least 110,000 empty containers are sitting on chassis at the ports of Los Angeles and Long Beach.

“From our perspective, it is a utilization issue,” he told The Washington Times. “We are constraining the chassis supply, but we are not effectively maximizing the use of the chassis. We are stuck in a storage conundrum.”
The shortage has increased costs for truckers, who are also dealing with higher gas prices and inflation. Most truckers rent chassis from equipment providers and pay for the time they use them.

Mr. Schrap said truckers who once waited 40 minutes for an open chassis are now waiting as long as seven hours.
“We don’t get paid unless we are moving goods,” Mr. Schrap said. “But if you go into the marine terminals, which are extremely congested right now, you spend a lot of time waiting. The chassis make a difference because that’s how you move a container.”

• Jeff Mordock can be reached at jmordock@washingtontimes.com.

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