Manufacturers and Importers Could Reap Cost Savings After Latest Development in Clean Trucks Dispute
A recent court decision involving the local ports’ Clean Trucks Program may end up being a cost saver for apparel and textile importers.
On March 20, the U.S. 9th Circuit Court of Appeals ruled that part of the Clean Trucks Program at the ports of Los Angeles and Long Beach violates federal law.
A unanimous decision by a three-judge panel sends the matter back to the U.S. District Court, which last summer denied a preliminary injunction sought by the American Trucking Associations to block a portion of the Clean Trucks Program requiring truckers to be enrolled in a concession program that governs certain aspects of their operation.
The concession program at the Port of Los Angeles is a bit more stringent than at the Port of Long Beach. Los Angeles is in the process of requiring truckers calling at the docks to be employed by a trucking company rather than working independently as an owner-operator.
Until the Clean Trucks Program went into effect last year, most of the 14,000 to 16,000 truckers who hauled cargo in and out of the ports were free-lance truckers who have helped keep drayage fees down. Full-time employee truckers cost more to employ, meaning higher drayage fees. Also, the Teamsters have been eager to organize the truck drivers into a union, which was an elusive endeavor when most of the drivers were self-employed. The Port of Long Beach does not require drivers to be employed by a trucking company but does require independent truckers to fill out an application to be registered in the concession program and show proof of auto insurance. A $250 free is charged for each application.
The appeals court did note that the Port of Los Angeles’ concession agreement does overreach more than the concession agreement at the Port of Long Beach. “However, each is likely to result in at least some irreparable harm to the motor carriers, and, on balance, the District Court abused its discretion when it denied a preliminary injunction as to significant parts of the agreement,” the court said in its decision. “We do note that the Los Angeles port’s independent contractor phase-out provision is highly likely to be found preempted and enjoined.”
The ports were not pleased with the decision but noted that the majority of the Clean Trucks Program will still go into effect. “The decision today does not change the legal status of our Clean Trucks Program or any other requirements currently in effect at the Port,” Richard Steinke, executive director of the Port of Long Beach, said in a statement. “The Port will continue to study the decision and appropriate next steps of the Court of Appeals, and anticipates that further proceedings will be held promptly before the District Court.” The appeals court mandated that the U.S. District Court quickly grant the preliminary injunction, which would put a damper on the Port of Los Angeles’ plans to have at least 20 percent of all cargo be collected by employee truckers. “Once the injunction is granted, you cannot deny owner-operators [independent drivers] from entering the port during the injunction,” said Curtis Whalen of the American Trucking Associations, the umbrella group for state trucking associations.
The ports initiated the Clean Trucks Program last year to clean up the air and take older trucks out of the system, gradually replacing them with models built after 2007. Starting Oct. 1, truckers built before 1989 were banned.
The $2 billion program will help companies buy new trucks financed through a cargo container fee of $70 per 40-foot container and another fee on dirty trucks. The idea is to eliminate 80 percent of the diesel pollution coming from trucks in the next five years. “We have always argued we are not trying to block the fee collection [for clean trucks], the retirement of old trucks or the truck-driver registry to make sure you don’t have old trucks entering the facilities. We feel they could have done this without all the contractual rigmarole,” Whalen said. After a preliminary injunction is issued, the matter will be scheduled for a District Court trial later this year.—Deborah Belgum
