California Apparel News

A new Clean-Trucks Program at the ports of Los Angeles and Long Beach is facing major opposition and may not take effect until at least the middle of 2008 instead of the beginning of next year.

A recent economic analysis showed that under its current structure, the program, part of the ports’ Clean-Air Action Plan, would force many of the 16,000 independent truckers who pick up most of the cargo at the Port of Los Angeles and the Port of Long Beach out of business, leading to cargo chaos.

The two ports receive 40 percent of the cargo imported into the United States and make up the largest port complex in the United States, handling more than 15 million 20-foot containers last year.Now the ports are back to the drawing board, fine-tuning the groundbreaking plan that most likely will be bankrolled by additional pick-up fees paid by importers.“Change is afoot,” said Arley Baker, a spokesperson for the Port of Los Angeles.

In April, the Port of Long Beach and the Port of Los Angeles announced they would implement one of the nation’s most aggressive environmental plans to force drivers and trucking companies to either retrofit their air-polluting rigs or buy new vehicles that adhere to 2007 or newer clean-air standards. The $1.8 billion port program, to be financed by some kind of fees, will cover 80 percent of the cost of a new $100,000 truck cab or 100 percent of the cost of retrofitting 1994 or newer models. The goal is to reduce truck pollution around the ports by 80 percent over a five-year period.

But a recent $365,000 economic analysis commissioned by the ports shows that many independent truck drivers and trucking companies would simply drop out of the business because they would probably be unable to secure a loan to pay the other 20 percent of a new truck’s sticker price. The study’s authors interviewed 403 truckers and 186 trucking companies. The results showed that on average, an independent driver earns about $12 an hour after expenses, or about $29,000 a year.

Trucking companies said intense competition leaves them with an average 5 percent return on revenues. The bulk of their costs comes from the 70 percent of revenue paid to independent truckers to pick up cargo at the ports. About 30 percent of trucking companies serving the ports said they would be put out of business because of the cost to replace trucks and the need to pay higher wages of around $20 an hour to truckers because of a driver shortage.

Dropouts

The loss of truck drivers would be on top of another fallout expected next year when the government-mandated Transportation Workers Identification Card (TWIC) is expected to go into effect. It requires truckers to undergo a security background check. Also, drivers must be legal residents of the United States and not have a felony conviction.

According to the ports’ recent economic analysis, conducted by economist John Husing, 22 percent of the independent truckers serving the ports would not apply for an identification card for various reasons. Trucking companies believe 15 percent will not qualify for the card, while the Transportation Security Administration, which is doing the background checks and issuing the documents, estimates 50 percent won’t make it.

If the Clean-Trucks Program eliminates even more truck drivers than TWIC, importers could be waiting weeks instead of days for cargo to hit their warehouses.

“The Husing report gave us more questions than answers,” said Patty Senecal, vice president of sales and marketing for Transport Express Co., a trucking company in Rancho Dominguez, Calif., that uses independent drivers to pick up cargo at the ports. “It was very smart of the ports to have an analysis done because the path we were on has the potential to cause critical shortages of trucks.”

Opposition to the plan has been mounting. On Oct. 4, the Intermodal Motor Carriers Conference, which encompasses the American Trucking Associations, said it was concerned with the destructive economic impact and questionable legality of the trucks program. “If the ports approve and act to implement CAAP [the Clean-Air Action Plan] in its current form, the IMCC will seek corrective action in U.S. District Court,” the trade group said in a statement.

In late September, the Pacific Maritime Shipping Association and The National Industrial Transportation League sent a letter to the Federal Maritime Commission urging the governmental group to stop the Clean-Trucks Program. The two trade groups, which represent shipping lines, port terminal operators and shippers, said the program would cause major disruption in cargo flows through the ports of Los Angeles and Long Beach. They also maintained it violates the U.S. Shipping Act because it potentially would prohibit independent truckers from picking up cargo at the ports. “This is a serious matter that requires the prompt attention of the Commission in order to preserve the efficient flow of U.S. foreign trade through these ports,” the two trade groups wrote.

In response, Richard Steinke, executive director of the Port of Long Beach, and Geraldine Knatz, executive director of the Port of Los Angeles, wrote to the Federal Maritime Commission that the Clean-Trucks Program was still being formulated but would move forward.

“We are, however, very much committed to moving in the near term to effecting significant reductions of all harmful components of diesel exhaust emissions that emanate from port operators,” they wrote. “The ports are prepared to commit substantial public monies to replacement of older, higher-polluting trucks with new vehicles that meet the most recent federal EPA standards for exhaust emissions.”

Originally the plan was to have been paid for with a $50 pick-up fee slapped on truckers driving dirty vehicles into the ports. That idea, however, could put even more truckers out of business and is being reworked.

“I believe the program should be paid for by a fee on containers because, quite frankly, the health impacts are driven by those who are purchasing the goods,” said Bob Foster, the mayor of Long Beach, which oversees the Port of Long Beach. “I would like to see a plan adopted prior to the end of the year.”

But Mario Cordero, president of the Long Beach Harbor Commission, predicted the two port commissions won’t have a plan completed until early spring and won’t put it into effect until mid-2008. “When you are looking at a plan as monumental as this, there has to be discussion,” Cordero said.

Any delay only means one thing: The ports cannot go forward with any expansion plans until the air is cleaner. Experts predict the two ports could be handling as many as 42.5 million 20-foot containers, or almost three times what they handle now, by 2020 to 2030 if expansion occurs around the docks.

“These projects, such as dock-rail expansion, expansion of the bridges, a larger Alameda Street, will not get built if you can’t prove that you have reduced environmental pollution,” Foster said. “This has got to get done.”