COALITION OPPOSESS INTERMODAL REFORM ACT PROPOSAL

-Proposed Legislation Would Could Be Counter-productive to Efforts to Reduce Congestion-

[March 3, 2003- Washington, DC] - In letter sent to Assemblyman Marco Firebaugh today, the Waterfront Coalition expressed its opposition to The Intermodal Reform Act (AB 1651), introduced on February 21, 2003.

"The Intermodal Reform Act will fundamentally alter existing business practices in California's ports, and it seeks to legislatively define the relationship between importers and exporters and their service providers" said Robin Lanier, executive director of the Waterfront Coalition. "While well-intentioned, the bill will be counterproductive. It's liability requirements are unnecessary and its provisions with respect to certain long-standing practices on the waterfront could ultimately increase congestion, not reduce it."

The Intermodal Reform Act would make "shippers," including importers and exporters that contract with truckers liable for all accidents involving certain truckers that do not meet specified standards. In addition, the bill identifies as "unfair business practices" certain long-standing penalties that apply to freight stakeholders who leave their cargo on the ports for too long; or who fail to return equipment such as chassis in a timely manner; and requires that "shippers" be solely responsible for paying these charges in each and every instance.

"[T]he cargo owners represented by the Waterfront Coalition and their brokers and logistics providers regularly contract with harbor drayage companies. They base their hiring decisions on a wide variety of factors, including the reliability and safety of the carrier. Cargo owners have a vested interest in doing business with carriers that will ensure the safety of their cargos," Ms. Lanier wrote in her letter. The Waterfront Coalition has suggested that the liability provisions of the bill constitute and unnecessary intrusion into the commercial relationship between importers and exporters and their service providers.

In addition, the Coalition opposes the provisions relating to so-called "detention" and "demurrage" charges. "We do not believe that detention and demurrage charges are de facto unfair practices. Indeed, these charges are imposed to encourage the quick removal of containers from terminal facilities and the quick return of chassis and other equipment," Ms. Lanier stated in her letter to Assemblyman Firebaugh.

The Waterfront Coalition recognizes that importers and exporters largely pay the fees under conditions where they have caused delay in picking up or returning loads or equipment. But there are circumstances where the delay is not the fault of the importer or exporter but the drayage company or the terminal. "Truckers are not entirely blameless when it comes to detention and demurrage charges," says Lanier. "Neither are terminals operators. The furor over these fees is a symptom of the congestion at the ports, not a problem that requires legislative solutions. More to the point, to define these legitimate charges as 'unfair business practices' is to ignore the very important reason these charges are imposed in the first place - namely to induce stakeholders to move cargo and reposition equipment quickly and efficiently. Making one stakeholder responsible for these fees in all instances, even when they are not to blame for delays, is seriously counterproductive."

Copies of the coalition's letter to Assemblyman Firebaugh can be obtained in PDF format by clicking here. For more information or to obtain a copy of the letter by fax, contact Ezra Finkin at (202) 861-0825 Ext. 203.