Maersk selling chassis equipment subsidiary
From the Memphis Business Journal –
Maersk Inc. is selling subsidiary Direct ChassisLink Inc. (DCLI) to private investment firm Littlejohn & Co. LLC , marking a leading steamship line further distancing itself from the chassis business.
For years, steamship lines provided chassis to trucking companies, but Maersk, a subsidiary of the A.P. Moller-Maersk Group, led the charge to pull out of that business. It continued to provide equipment under Direct ChassisLink, which it formed in 2010.
Trucking and intermodal companies, in Memphis and elsewhere, are still working to see how the changes in chassis ownership will affect them long-term. With ownership of chassis shifting, it could give companies more control over their equipment and consequently differentiate carriers which provide quality equipment.
The transaction is expected to close in March.
DCLI rents and leases chassis to drayage companies and steamship lines in the U.S. The company owns or leases 66,000 chassis through a network of 129 locations on or near ports and intermodal hubs in the U.S.
The move fits with A.P. Moller-Maersk Group’s strategy to build its presence in shipping, energy and related activities, according to J. Russell Bruner, chairman and CEO.
“We have been pleased with the business levels, the profitability and the quality of management at DCLI,” he said in a company statement. “It is, however, a provider of chassis, and it does not fit in our long-term strategic focus. The sale will allow the group to reallocate resources to the strategic focus areas within shipping, energy and related activities.
Katie George Hooser heads business development with Memphis-based Intermodal Cartage Co . and is this year’s president of the Memphis World Trade Club.
“Maersk set a standard by establishing Direct Chassis Link in 2010,” she said. “Since then, most major ocean carriers have also announced plans that they will no longer provide chassis to motor carriers. Disengaging from the chassis improves an ocean carrier’s bottom line by passing the cost, removing their liability to the Department of Transportation, and allowing them to focus on their core business.”
This change affects the trucking industry in Memphis as trucks need chassis to move product.
“I see this change as an opportunity to have better control over the equipment that we use,” Hooser says. “I hope that the change will also strengthen our relationships with cargo owners who will want to use companies they can depend on to provide the best equipment.”
Posted: March 1, 2012