Intermodal chassis manufacturer CIMC is bringing full manufacturing to the U.S. to meet the needs of the domestic intermodal market.
Coinciding with a name change to CIE Manufacturing Inc., the company is in the process of creating full manufacturing capabilities in both of its facilities – in South Gate, California, and Emporia, Virginia. CIE plans to hire an additional 275 people in the U.S. with this move, and eventually plans to add a facility in the middle of the country with access to the Mississippi River for easy barge transport.
With manufacturing facilities on both the East and West coast, each with the capacity initially to produce 100 chassis per shift, CIE Manufacturing will be able to offer lower costs and faster delivery of intermodal chassis to domestic customers.
Previously, CIMC brought in chassis manufactured by its parent company, China International Marine Containers, in China. Those chassis either arrived whole and were quality inspected here, or arrived in pieces and were assembled in CIMC’s U.S. facilities.
Then the Trump administration’s tariffs hit. When they were 10%, explained CEO Frank Sonzala in an interview, customers absorbed the difference. But when those tariffs went to 25%, the company started losing orders. “Our customers would have had to pay for five and get four,” he said.
He believes the tariffs were unfairly applied to CIMC’s American operations. “While the product features components sourced globally, including from many U.S.-based suppliers, and still will, “It has always has been an American company – all of our money stays in the U.S. unless we buy a product from [CIMC in China]. Profit-wise we have to stand on our own. So it really hurt us when the chassis were kicked up to 25%.”
Worse, he said, competing U.S. intermodal manufacturers were either unable or unwilling to pick up the slack with expanded production. As a result, Sonzala contends, there’s about a 26,000-chassis backlog of demand from last year, with customers being told their 2019 chassis orders won’t get built until the fourth quarter of 2020. The South Gate and Emporia facilities each has capacity to build 100 chassis per day on a single shift, and a second shift could be added if needed.
While the move may have been triggered by the trade ward, Sonsala said in a release, “Now, we see so many benefits to the decision, including creating jobs in U.S. communities and building capacity to produce upwards of 60,000 chassis a year for the U.S. market. I truly believe that this positive move into North American manufacturing will be best for our customers, our employees and the entire intermodal industry.”
While some of CIE’s less-common chassis will still be built in China, Sonzala told HDT, the fact that its most popular domestic intermodal chassis will be built here will mean customers can get them faster. No longer will there be the lead time of shipping chassis and components via container from China and draying them from the ports to the CIMC U.S. facilities.
With the new name comes a new logo, with made-in-the-U.S.A. imaging, including an eagle’s beak, patriotic colors, and a shield.
The shield, Sonzala said, also represents the idea that the company is now better “shielded” from many unexpected challenges, whether that’s a trade war with China, or a natural disaster that affects factories where the company is sourcing some components, problems with intermodal shipments coming into the ports, or even some sort of political or military upheaval involving China.
Sonzala told HDT that the company has been a leader in bringing higher quality and safety standards to the industry. At a time when intermodal chassis were often equipped with bias-ply tires and incandescent lighting, then-CIMC made radial tires and LED lighting standard. All its intermodal chassis feature antilock brakes, and a KTL powder coat paint system that resists rust and corrosion.