What is Chassis Fee? | Explained

You may have many questions related to Chassis Fee. What is it, Why is it Charged, What are its different forms? You may be wondering what Chassis is in the first place. If that is the case, then worry not, as this blog will answer all of the questions that you might have related to the chassis fee while covering every minute detail about the Chassis Fee.

If a consignee’s shipment arrives at an ocean port, it needs to be transported to the consignee’s warehouse/destination by road. The cargo/container is loaded onto a chassis and transported to the warehouse with the help of a truck.

Let’s start with the basics first.

What Does Chassis Mean in Freight?

A Chassis in Freight and Shipping is a skeleton framework with wheels attached to it, generally used to transport shipping containers from one place to another (typically from the port to a warehouse.)

In the image, a chassis has been attached to a truck so that the container placed on it can be towed toward its destination. 

The chassis securely envelopes the container, preventing any undesired movement while being transported. The chassis is designed to accommodate both 20ft and 40ft containers, while the tri-axle chassis is specifically designed for overweight FCL (Full Container Load) shipments

Now that you have a clear idea of what Chassis refers to in shipping and freight. Let’s discuss the Chassis Fee.

What is Chassis Fee in Freight?

The Chassis Fee is the amount charged against your cargo while it is being transported by a truck on a chassis. This transportation is usually from the port to a warehouse (or any other destination). 

This chassis fee is also known as a chassis rental fee because you are borrowing a chassis to transport your cargo with the help of a truck. The chassis fee amount is based totally on the amount of cargo being transported and can vary due to the type of chassis being borrowed to transport the cargo.

Generally, the chassis fee is a flat rate (fixed amount) for the FCL Shipment (Full Container Load), depending on the size of the container. However, in the case of LCL Shipment (Less than a container load), the amount is based on the cargo’s volume.

Before we move on to different terminologies closely linked to the Chassis Fee, you must first understand who charges the chassis fee.

Who Charges the Chassis Fee?

This fee is charged to the consignee by the provider of the chassis. Generally, carriers provide chassis to transport the cargo to its destination. Therefore, the carrier charges the chassis fee to the consignee in this scenario. Even many ports provide chassis to be borrowed by the consignee. When the chassis is borrowed from the port or from the carrier, then this fee is referred to as the “Chassis Usage Fee”

However, the main reason for charging this fee by the carrier is to promote/encourage the appointed trucker by the consignee to use their chassis. Alternatively, you can utilize the chassis pool offered by some US Ports. 

Since not all Ports offer chassis, the consignee sometimes has to book a chassis from separate providers (not the same as the pickup port location). In such cases, the consignee has an additional cost, known as a chassis split fee. When the chassis is booked from a provider other than the port or the carrier, then the chassis fee is referred to as the chassis rental fee.

What is the Chassis Split Fee?

In cases where the carrier and the port do not provide the consignee with a chassis for transportation. The consignee has to book a chassis according to their cargo from a separate provider. This means that the trucker will have to make an additional trip to pick up the chassis and then to the port to pick up the cargo. 

The amount that the trucker will charge for this additional trip of picking up and dropping off of the chassis is known as the chassis split fee. 

This whole scenario creates two different variances of the chassis split fee. The first is the split-pickup fee, in which the terminal/port doesn’t provide the chassis, and the truck must first go to a chassis provider to attach a chassis.

Secondly, a split-return fee is when the container is returned to the ocean provider. Still, the terminal doesn’t accept the chassis, which must be returned separately to a different location. 

A single shipment can simultaneously cost you a chassis fee, a split pickup fee, and a split return fee. 

What is a Tri-Axle Chassis Fee?

When the FCL Shipment is overloaded/overweight, a Tri-Axle chassis must be used to deliver the container to its destination. This Tri-Axle will incur additional charges to the consignee, referred to as the Tri-Axle Chassis Fee. 

For the 20ft Containers, weight above 36,000 pounds is considered overweight. In the case of a 40ft container, a weight above 44,000 pounds is considered overweight and requires a Tri-Axle chassis to transport the container.

However, one important piece of information often needs to be noticed is that the trucker may impose the chassis fee and the tri-axle chassis fee simultaneously for applicable shipments. But if the Chassis is borrowed from the carrier/port, they will charge the Tri-axle Chassis fee.

How Much is the Chassis Fee?

Generally, the Chassis depends on the type of Chassis borrowed to transport the cargo to the warehouse. As mentioned previously, the Chassis-Fee is a flat rate for FCL shipments. Usually, the chassis fee is around $35-$40 Daily for Two-Axle Chassis. In the case of a Tri-Axle Chassis, the fee is around $75-$80 daily. 

Usually, if a container return has been delayed and incurred a Detention fee, then this means that it will also be accompanied by a daily Chassis Rental Fee. This is because the container has not been returned, nor the chassis. 

If you want to learn about Detention / Demurrage Fees, read our blog here!

Note: The Chassis Fee can vary from chassis to chassis. You might only sometimes require a two-axle or a tri-axle Chassis. There are various types of Chassis that can be borrowed.

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What Factors Influence the Chassis Fee?

Generally, the Chassis fee is a flat rate, especially for FCL shipments. However, certain factors can cause this Chassis rate to spike. Let’s discuss these factors one by one.

• Fuel Prices: Fuel costs significantly influence maritime and land transport. Lower fuel prices result in cheaper cargo shipments and lower truck transportation costs, ultimately leading to lower Chassis Fees. Conversely, higher fuel prices lead to an increase in Chassis Fees.
• Peak Season: During peak seasons, chassis availability is a big hurdle. Booking a chassis can be slightly more costly than the average chassis fee.
• Customer Loyalty: Regularly conducting business with a shipment company can result in a lower Chassis Fee compared to infrequent customers. Customer loyalty is considered when determining the rate of the Chassis Fee.
• Government Policies: Government regulations on transport activities considerably impact the rate of Chassis Fees. For example, limitations on transportation hours can make Chassis Fees more expensive.
• Merchant Reputation: Well-known merchants who consistently package cargo properly and deliver within the specified timeframes may be charged a lower rate of Chassis Fees. On the other hand, merchants who exhibit delays or poor performance may face higher charges.

It is important to note that once the agreement has been made between the two parties, the chassis fee cannot be changed. The chassis fee can only cost you more if you take more time to return the chassis than the agreed time. Even then, it will cost you the same rate that was decided in the agreement (per-day rental charge)

Do I Pay the Chassis Fee for All Shipments?

If the shipment is transported from the Ocean Port to the consignee’s warehouse by road or rail, then all shipments must pay a chassis usage fee. 

However, if the consignee uses their chassis to transport their shipments to the destination, they will not have to pay any chassis usage or rental fee. 

Can I Avoid Chassis Split Fees?

There are multiple different ways through which the consignee can avoid paying the Chassis split fee. However, it must be noted that the consignee to plan in advance to ensure that all things go smoothly:

• Use Your Own Fleet and Trailers: If you have enough space at your facility, consider utilizing your own fleet and trailers. Having a sufficient number of chassis and dedicated prime moves will give you complete control over the locations of the chassis.
• Engage Truckers With Trailers: It’s highly advantageous if a trucker has their own chassis. This means that the transportation provider doesn’t need to pick up a trailer from another location before picking up or delivering the container.
• Request Carrier Haulage: If you’re concerned about chassis split fees, you can inquire with carriers who can arrange the container transportation instead of relying on a trucker. Carrier haulage involves the carrier taking responsibility for coordinating the movement of the container. While carriers do not charge a chassis split fee, they may impose a chassis usage fee in certain cases or locations.
• Use Customized Chassis: Certain types of chassis are designed to accommodate both 20ft and 40ft containers. By utilizing trailers that can support both container sizes, you can enhance the efficiency of your existing chassis pool.
• Negotiations: If the Chassis Fee is unavoidable, you can negotiate with the trucker and try lowering the Chassis Split fee. We strongly advise initiating discussions and negotiations regarding any fees before engaging the services of a trucking company.

Can You Avoid Chassis Fees?

If you are using the chassis from an outside source (chassis pool, carrier, port), then in that case, the chassis rental fee or the chassis usage fee cannot be avoided. However, if you own a chassis, then you can avoid the chassis rental/usage fee. However, the trucking company will still charge you for the transportation

Let’s move on to different ways to reduce the Chassis fee.

How to Reduce Chassis Fee?

There are multiple different tactics that you can use to reduce the amount of chassis fee that is charged against your shipment. Let’s discuss them one by one.

• Choosing an Asset-Based Provider: If you choose an asset-based carrier for drag, it can speed up the distribution and capacity even during the peak season. Renting a chassis from such a provider will cost you less than the chassis fee charged by renting the chassis from the port.
• Using Same Drayage and Warehousing: If you choose the same company for drayage and warehousing, then you’ll most likely get a priority when it comes to unloading at the warehouse. This will result in lower chassis rental time, which would ultimately mean that you will have to pay less chassis fee.
• Negotiating the Chassis Rental Fee: Most consignees often do not negotiate with the asset-based carrier. The negotiation between the carrier and the consignee is on the top price of the project or the number of days the chassis rental days. Such asset-based carriers will negotiate the chassis rental fee with you and allow you to reduce your chassis costs.
• Avoid Night Pickups: Night pickups are often considered a better option by many consignees as there are fewer chances of traffic congestion. However, if the pick is made before midnight (even at 11:59 PM), it would still be counted as a full day of chassis rental. This means that you are already paying for two full days of rental without including the chassis’ unloading and return times.
• Getting Aid in Dual Transactions: During the peak seasons, most terminals (Ports of L.A. and Long Beach) require a dual transaction. This means that if you return an empty container, you must pick up a full container on your way back. This also goes the other way around; if you are dropping off a full container, you must pick up an empty container on your way back. If your shipment arrives at such terminals, you should find a 3PL or a Drayage company that can help you with such dual transactions.
• Avoiding Pickup on Thursdays & Fridays: If you pick up the shipment and rent a chassis on Thursday or Friday, chances are that you are guaranteed a 5-day Chassis Rental. This is because many terminals do not accept returns on Saturdays and Sundays. However, this is something that can only be applied to some shipments. But if you can avoid pickup on Thursday and Friday without getting penalized, then avail of this option to reduce the chassis rental fee.
• Avoiding Delay in Return: You must always plan ahead and make sure that the chassis is returned during the agreed time to make sure that there are no additional surplus fees. As the Chassis rental fee is charged on a per-day basis, this means that any delay in returning the chassis will cost you a complete per-day charge (or more).

As mentioned above, there are various chassis available other than the standard two-axle and tri-axle. Therefore, let’s see what different types of chassis are available.

Types of Container Chassis Available

Due to the existence of various shipping container dimensions, it is necessary to have diverse chassis options for transporting them. The following are different types of chassis, each with specific purposes for either short-haul or long-haul scenarios:

1. Standard International Chassis: Suitable for 20ft and 40ft shipping containers.
2. Intermodal Drayage Chassis: Specifically designed for 45ft and 53ft shipping containers.
3. Two-Axle Chassis: Standard configuration for transporting 20ft and 40ft loads.
4. Three-Axle Chassis: Standard configuration for transporting overweight 20ft and 40ft loads.
5. Extendable Chassis: Provides flexibility to accommodate various container sizes.
6. Gooseneck Chassis: Features a lower bottom to accommodate taller containers.
7. Lightweight Chassis: Designed with a lower bottom to transport taller containers while being lightweight itself.
8. Heavy-Duty Chassis: Capable of carrying heavier loads than standard chassis due to its robust construction.
9. Combo Chassis: Versatile chassis that can handle both 20ft and 40ft applications.
10. Flatbed Chassis: Designed to carry either two 20ft containers or one 40ft container.
11. Straight Frame Chassis: Chassis without tunnels, in contrast to gooseneck chassis.
12. Rear B-Train Chassis: Equipped with back-to-dock capability, capable of transporting 20ft or 40ft containers.

That sums up all of the information regarding the chassis fee in shipping and freight.

Summary

The carrier charges the Chassis Fee to the consignee for the rental and usage of the chassis to transport the consignee’s shipment from the ocean port to the warehouse by road. However, not all carriers and ports provide the service of renting the chassis. In such cases, the consignee has to contact the chassis pool or a 3PL or Drayage company to rent a chassis. 

However, renting a chassis from outside the port would mean that the trucking company will have to make an additional trip to pick up the chassis before picking up the shipment, which will cost the consignee additional costs, known as chassis split.