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June 2007
On June 27th, both the ports of L.A. and Long Beach announced that the scheduled phase-in of their truck replacement plan, known as the Clean Truck Program (CTP), would be delayed until a later date. The ports anticipated implementing features of the CTP beginning in July 2007. According to the announcement, the ports need extra time to digest the many comments received concerning operational elements of the CTP as well as conduct an economic impact study.
Earlier this year, both ports unveiled their much anticipated truck replacement plan as part of the broader Clean Air Action Plan (CAAP) designed to dramatically reduce all port-related emissions. Harbor truck emissions have long remained a contentious political issue in the region, so it came as no surprise that the ports announced that they would tackle truck emissions as the first element in the CAAP.
What was unexpected was the scope of the ports plan to reduce truck emissions. Specifically, the port plan calls for the replacement or retrofit of all the estimated 16,000 harbor trucks. The most surprising feature of the plan calls for the creation of a concession program that would operate very much like a taxicab medallion system. Only those trucking companies that receive a concession, or permit, will move cargo through southern California marine terminals. In order to receive a concession a trucking company must demonstrate that its fleet of trucks meets strict clean-burning standards, drivers have passed a criminal background check and the licensed motor carrier holds adequate insurance coverage. Still yet, concessionaires must operate a fleet of at least 50 trucks and hire all drivers as direct employees as opposed to using contract owner-operators as is the standard today.
The truck replacement and employment criteria may very well fundamentally change the structure of the drayage industry. According to a wide variety of port users, the clean truck plan could cost anywhere from $200 to $500 per gate move! Given this radical increase in the cost of moving cargo, a growing number of port users publicly submitted comments to both port directors expressing concern over the impact of the proposed CTP. In fact, one such group of shippers moving recycled materials stated the value of exports sent to Asia is typically estimated at $2,500 per container. So an increase of $500 per container would be particularly burdensome if not crippling.
Meanwhile, other commodity and bulk shippers have complained that the CTP requiring concessionaires to operate a fleet of at least 50 trucks would be excessively burdensome. Many of these companies own their own trucks - as opposed to contracting for drayage - yet do not maintain a fleet of 50 or more. This requirement would also be excessively burdensome and costly.
Given the outpouring of opposition to the plan by a wide array of shippers, the ports announced on June 27th, that implementation of the plan would be delayed until staff have digested these comments and tweak phase-in rules to address these concerns. Port staff is also working on an economic impact study to ascertain the true cost of their plan. Yet, even if the ports move forward with the CTP as currently outlined, the ports could face a costly court battle. Those following developments closely in southern California have indicated that trucking interests could take the ports to court and seek an injunction forbidding implementation of the plan.
Back in March, the Waterfront Coalition and a group of other industries proposed a workable solution to achieve truck emission reductions that would not drastically increase drayage costs, nor fundamentally change the structure of the industry and lead to a costly court battle. That alternative would see the state's air quality regulator - the California Air Resources Board (CARB) - issue strict tail pipe emissions standards for all registered trucks in California. Harbor trucks could face a faster phased-in schedule. Independent owner-operators that did not achieve this standard would be forced to locate the least-cost technology to meet the emissions requirement. In fact, we even proposed a modest fee charged to shippers to help cash-strapped truckers with financial incentives to purchase this equipment. This alternative is estimated to cost roughly $150 per gate move - a far cry from the $300-$500 estimate for the CTP.
Yet those in support of the plan have indicated that changing the industry model by ensuring that only large trucking companies operating fleets of at least 50 trucks with direct employee drivers remains the only possible way to achieve truck emission reductions in southern California. Both the Coalition for Clean Air and the Natural Resources Defense Council stated that only large trucking companies have the wherewithal to comply with strict standards and it remains easier to police just a few large concessionaires than 16,000 independent drivers.
Other experts have commented
that these policies changing employment standards have almost nothing to do
with achieving emission reductions at the ports but are designed to levy added
costs on to port users. In fact, on June 26th the International Brotherhood
of Teamsters organized a rally in support of the CTP. In
their press release, the union stated the CTP plan to require employee
drivers remained essential to force retailers to guarantee a living wage for
drivers.
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