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How does 3rd party and exception based billing work?

Background

ChassisManager is structured to address a dynamic marketplace that has evolved as ocean carriers divested their assets and exited the chassis provisioning business. In the new provisioning model, the initial concept deployed assumed motor carrier responsibility for chassis costs associated with the pickup or delivery of containerized cargo, consistent with operations in Europe and Asia.

However as shipping lines have transitioned into the new model, many continued to bear the costs on certain types of movement. Examples include, but are not limited to: carrier haulage when the shipping line pays for delivery to a customer location, exception per terms of customer contract or account, export pool bookings, empty repositioning, or land bridge moves.

The market is now entering a third phase of evolution, whereby beneficial cargo owners (BCO’s) are taking on responsibility for chassis usage costs in a direct billing scenario.

The ChassisManager billing engine was designed from the ground up to manage complex billing rules and scenarios associated with this evolving marketplace.

By combining gate movement data with summary booking information from responsible third parties, that is ocean carriers and BCO’s, ChassisManager is able to rate chassis usage and assign the charges to the appropriate party in a highly accurate and scalable platform.

Gate Movement Event Reporting

Chassis movement out of and into start/stop facilities is reported to ChassisManager in real time via electronic data interchange (EDI). A start/stop facility may be a marine terminal, railhead, container yard, chassis depot, inspection or other site designated by the Pool Operator (lessor).

When a motor carrier leaves a facility with the lessor’s chassis, the information associated with that movement is captured in the facility's gate system. That system reports the movement to ChassisManager.

A rental starts when a motor carrier picks up a chassis for the first time. Each rental is tied to a specific chassis unit.

The facility will report to ChassisManager, among other items:

  • Chassis identification number
  • Container identification number
  • Motor carrier ID code (SCAC) pulling the unit
  • Ocean carrier ID code (SCAC) of the responsible ocean carrier whose box is on the chassis
  • Booking or bill of lading number
  • Direction of movement

 

Likewise, on the gate-in at the end of the move, the facility will report a gate-in event back to ChassisManager. When the gate-in is reported, ChassisManager matches it to the gate-out by using the motor carrier ID code and the chassis identification number

This gate-out and subsequent matching gate-in movement is what defines a trip in ChassisManager. Each trip has a pickup location, date/time and a return location, date/time. The move may be bare or laden, however only one container and one responsible party may be associated with any given trip.

The motor carrier may make several trips with the same chassis in the same day, or over any number of days.  The rental remains in open status each day while ChassisManager has determined the last movement for that chassis is a gate out.  The rental is considered returned when the motor carrier “gates in” the unit to a start/stop facility and no further movement is reported on it for that motor carrier for that day.   All trips on a rental are rated once a return event has occurred or every 30 days whichever is sooner.

 

Responsible Third Party Lessee Reporting

The default bill to party for chassis day-lease billing is the motor carrier unless the movement is otherwise identified and marked by an authorized third party.  These responsible third party lessees may be:

  • Ocean Carriers (shipping lines)
  • Beneficial Cargo Owners (BCO’s)

ChassisManager provides a mechanism for additional types of lessees to identify designations for exception by utilizing summary shipment information; bills of lading or booking numbers combined with container numbers.  This data is matched to the movement of equipment received from the start/stop locations while the rental remains active (“Open” status) and is then used by the billing engine to determine the bill-to-party and day rate.

To describe the process in more detail, third party lessees submit summary level data about the anticipated bookings and bills of lading movement to ChassisManager on a rolling 2- or 3-week forward view. This data is designated as the moves that the lessee expects to pay for the chassis usage.

As gate events are reported and processed from the start/stop facilities, ChassisManager evaluates the container number and booking numbers against those provided by the third party lessee.  If a match is found, the system updates the trip associated with that movement and designates the third party as the bill-to party.  Additionally, every time the third party lessee submits a “shipment file”, ChassisManager compares the new information to any moves currently in progress in an attempt to match exception-billing data to trips on an existing open rental.

 BCO third parties simply submit the container numbers with their associated booking or bill of lading references in a simple flat file upload.   BCO-matched trips visible in the ChassisManager system will reference:

  • The BCO organization name
  • The BCO ChassisManager organization code (provided by IAS)
  • A “haulage type” value of “BC”

 Ocean Carrier third parties with more complex matching criteria may utilize additional elements such as:

  •  Haulage Type
    • Carrier Haulage (CH)
    • Merchant Haulage (MH)
    • Empty Repositioning (MT)
  • Contract Number

 

Trips in the system that are matched to an ocean carrier will reference:

  •  The shipping line standard carrier alpha code (SCAC)
  • A haulage type of “CH” or “MT” (if provided)
  • A contract reference (if provided)

When the rental is returned and the system rates it, this combination of organization references, haulage types and presence of contract content determine the correct bill-to party and rate.

Pool Booking Exceptions

For the release of equipment for export moves, many ocean carriers use a standardized booking number series or sequence in advance of the actual booking or bill of lading number. In these cases, the ocean carriers have provided these prefixes to IAS. This information is matched at the gate out event. If ChassisManager encounters a gate out event where the pool booking matches what has been provided to IAS by the ocean carrier, it will immediately flag that trip as CH and bill to the ocean carrier.

Street Turn Dynamics

In all cases, once a trip’s bill-to party is determined either by haulage type designation as received from the ocean carrier or as associated with service contract exception data, an additional start/stop event would be required to change the designation. If an import unit outgates designated as "MH" and at the "street location" is transitioned and returned loaded on export as a CH move, there is currently no reporting facility updating ChassisManager with that transaction.

It should be noted that motor carriers may voluntarily transfer possession of chassis and containers using ChassisManager street turn functionality starting in Summer 2013.

 

 

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