Chassis Maintenance - Status Quo and Near Term Outlook

Equipment Discussion Paper

Greg W Stephens

Lean Transit

[email protected]

4/28/2014 Greg W Stephens 904 333 4469 1

4/28/2014 2

Discussion Items

Greg Stephens background

Near term situation: USA

Factual, anecdotal, and speculative

conclusions

Problem solving approach

Questions/issues

Greg W Stephens 904 333 4469

4/28/2014 3

Business Background

Consulting Practice: Margin Improvement, Process

Control, Shipper/Rail Contracts, IT/Decision Support

Systems, Engineering Economics, Fuel Surcharge

Education: MS Computer Science, Lean Six Sigma

BB, PMP and CTL certified.

Manager Engineering Economics: AAR,

Controller/CFO CSX Intermodal

Joint carrier ‘best practices’ projects on commercial

and technical issues.

Variety of projects from Nuclear Weapons on

Railroads to Design of Integrated trains.


4/28/2014 4

Chassis Status Quo and Near Term

Outlook

IEPs perceive that maintenance cost is too high today.

Little factual evidence demonstrating relative culpability of owners, draymen, vendors, terminals for chassis mechanical condition

No credible evidence that maintenance $ is reason for mechanical condition

Seems to be broad agreement that cost of safety improvements will fall to chassis owners (OCEMA and ATA sponsored analysis).

Estimates of $ impact from $8 to $50 per interchange. The lowest estimate for a fleet of 10,000 chassis would be: 10,000 * 40 interchanges/year * $8 per interchange = $3.2M


4/28/2014 5

Maintenance Unknowns are

Significant

Lack of quantitative analyses on expected component life (miles, time, and event driven)

Little quantitative information on impact of operating environment on maintenance requirements

Little information on what maintenance costs should be from an engineering perspective

Conclusions tend to be anecdotal: Overweight chassis: Most credible study in U.S. found 36% of

containers overweight; 70% of those by less than 1 ton.

Chassis tend to be maintained as a collection of components not as a machine. Components replaced/repaired either at inspection or failure

Creates continuing, permanent cost issue with interdependent components

Why replace a tire on a misaligned axle?


4/28/2014 6

Examples: Retread Anecdote and

Fact

Perception that retreads have higher failure rates than new tires

The probability that your airline departure will be on retreads is about 80%

Retread tires have same safety standards as new tires as specified in FVSS 117. State standards cannot be lower than Federal standards

According to NHSTA report DOT HS 811 060 “the primary safety issue for retreads – air pressure maintenance – is the same for all tires regardless of whether they are new or retread…In other words there are no distinguishable differences in safety issues based on a tire’s OE or retread status.”

Retreads are used on commercial airliners, military vehicles, commercial fleets from TL carriers to UPS, FEDEX, state and municipal governments, ambulances and other rescue vehicles.


4/28/2014 7

Speburg Study: Can chassis tire life

ever approach OTR tire life?

EXPECTED BIAS PLY TIRE LIFE (MILES) INFLATION NEW TIRE RETREAD TIRE

METHOD LIFE (MILES) LIFE (MILES)

COMPRESSED

AIR

162,000 125,000

NITROGEN 269,000 269,000

The Speburg study is the only study identified that used

appropriate controls and studied bias ply tires. Studied tire wear

for 60 million tractor miles in a variety of operating environments.

Transport Canada updated analysis for Canadian long haul and off

road trucking using radial tires


4/28/2014 8

Example: Chassis operating

environment

Perception that chassis operating environment is so severe that it accounts for a significant difference in tire life between chassis and OTR trailers.

Tire wear is due to friction. Primary maintenance related causes of excessive tire wear are under inflation,

alignment,

wheel balance,

bearing wear,

worn suspension components

Mismatched tread patterns

Physics of tire wear are the same for Port Operations.


4/28/2014 9

Comparative Operating

Environments

Chassis operating environment factors were derived from a chassis and semi-trailer movement database collected over 6 years (about 6 million movement records)

TL and Heavy Haul data is from the DOT’s Motor Carrier Operating and Financial Statistics database of 2,000 motor carriers.

Information received from chassis owners, drayage carriers, maintenance vendors, government and private research supplements the quantitative data.

Comparison based upon Gross Ton Miles


4/28/2014 10

Operating Environment: Chassis generate

about 1/5 of TL GTMs on a set of tires

COMPARISON OF OPERATING ENVIROMENT: CHASSIS VS SEMI TRAILER

ANNUALLY CHASSIS OVER LIFE OF TIRE CHASSIS

CHASSIS SEMI VS SEMI CHASSIS SEMI VS SEMI

MILES/YEAR(1) 22,000 53,058 (31,058) 24,860 150,000 (125,140)

LOADED MILES(2) 13,200 47,753 (34,553) 14,916 135,000 (120,084)

EMPTY MILES(2) 8,800 5,306 3,494 9,944 15,000 (5,056)

URBAN MILES(3) 7,143 3,538 3,605 8,071 10,003 (1,932)

INTER CITY MILES(3) 14,857 49,520 (34,663) 16,789 139,997 (123,208)

GROSS TON MILES/LOADED 429,000 1,169,937 (740,937) 484,770 3,307,500 (2,822,730)

GROSS TON MILES EMPTY 77,264 39,794 37,470 87,308 112,500 (25,192)

ADDED GTM OVERWEIGHT 12,382 0 12,382 13,991 - 13,991

TOTAL GROSS TON MILES 518,646 1,209,731 (691,085) 586,070 3,420,000 (2,833,930)

Assuming a properly maintained tire the key drivers of tire wear for a

chassis are:

(Miles * Weight)= GTM, Speed, Road Conditions, Urban Driving

There are no obvious factors of tire wear, other than maintenance, that put

a chassis at a 1:5 disadvantage over the expected life of the tire

Even semi-trailers don’t avoid yard jockeys in drop and hook operations


4/28/2014 11

Project Fundamentals: Business

Issues

USA view that IEPs have little leverage. May be the same for ROW owners. Every player can be influenced by dealing with what they

want (sticks or carrots) Maintenance vendors can’t ‘kill the goose that laid the

golden egg’

Ports want business and labor unions want jobs

Railroads don’t want in the chassis business

Motor carriers need a reliable chassis

AAR and ATA provide some good examples of benefits of building alliances but benefits become shared.


4/28/2014 12

Possible Starting Place

Start with some initiative that will pay off quickly. Alternatives might include mandating that:

Maintenance vendor checks and inflate tires each time a chassis is touched by vendor.

Contract with some third party to check tire inflation at out-gate.

Contract with a third party to go to each pool location with a truck mounted air compressor and start filling them up.

Getting tires inflated will extend tire life and reduce tire failures. Every study identified under inflation as the #1 cause of excessive wear and tire failure.


4/28/2014 13

Project Steps

Start with an “air” program even if small. All carriers in joint study with SM programs had lower costs

than those without.

SM plan evolved over time

Focused on known high payoff areas first

Switch to Nitrogen from Compressed Air. Air sucks.

Establish a benchmark of mechanical condition of fleet: not expensive – use stratified random samples.

Determine with confidence existing component life

What should component life be: lots of public info?

Use Statistical Process control to measure performance. Process control problem masked as a budget problem.

Huge number of tools/techniques to facilitate an SM


4/28/2014 14

Prototype Maintenance Vendor

Business Model

Maintenance and parts vendors maximize profits by maximizing IEPs cost.

Long term mixing of business and personal relationships may impede change Some view systematic fraud as an issue

There may be qualified people interested in an alternative business model A better mousetrap is an opportunity

Fixed price maintenance cost per unit including tires

Few services on a variable cost basis (e.g. collision damage, theft and fraud)


Chassis Maintenance - Status Quo and Near Term Outlook

Economy & Finance

Transcript of Chassis Maintenance - Status Quo and Near Term Outlook