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March 24, 2008 7:55 AM, EDT

L.A. Port to Banish Owner-Operators Under Emissions Plan

By Eric Miller, Staff Reporter
This story appears in the March 24 print edition of Transport Topics.

Port of Los Angeles officials last week approved the final piece of the port’s sweeping plan to dramatically reduce diesel emissions by replacing and retrofitting dirty trucks through a controversial employee-only business model that will phase out independent drayage operators.
The plan, approved by port commissioners on March 20, requires that by 2012, only employees of designated, licensed motor carriers will be permitted to perform drayage in the port.
“The passage of L.A.’s Clean Truck Program puts us on the road toward cleaner air for the benefit of all Southern Californians,” S. David Freeman, the commission’s president, said in a statement. “This historic vote is a victory for our health, our environment and our economy.”
However, Curtis Whalen, executive director of American Trucking Associations’ Intermodal Motor Carriers Conference, said ATA plans to file a lawsuit to block the plan because of its ban on independent truckers.
“We will not be mandated by any port authority to go to an employee-based industry,” Whalen said in a March 20 interview. “We’re deregulated; we are allowed under law to structure our business however we want to.”
The Los Angeles port plan is a departure from the final plan approved in February by the Port of Long Beach and could create difficulties for drayage operators who work in both ports. The two ports, the nation’s largest container facilities, are contiguous.
The Long Beach plan allows both motor carrier employees and independent operators to perform drayage in the port, provided they enter with clean trucks. That plan will help owner-operators acquire newer, cleaner-operating equipment (2-25, p. 1).
“The trucking system serving our ports is broken and cannot be permanently fixed without a major transformation,” said Geraldine Knatz, executive director of the Port of Los Angeles. “If we don’t create a responsible and financially viable port trucking system, a decade from now we’ll be throwing billions of dollars at this chronic problem once again.”
Art Wong, a spokesman for the Port of Long Beach, said it would be preferable for the two ports to operate under the same plan but that Long Beach is moving forward with its own plan, despite legal challenges that might confront the Los Angeles decision.
“The goal of both ports is to improve air quality, and we’re hoping that L.A. will join us in doing that,” Wong told Transport Topics. “Either plan is a major change, but we think our way is a little bit less disruptive.
“We’re already concerned about having enough drivers. Now there’s going to be a lot of companies that are not sure about what to do,” Wong said.
But Los Angeles officials said continuing the present system of using low-wage, independent truck owner-operators paid by the load provides them with no incentive for improving efficiency and no financial means to replace the existing truck fleet with cleaner, more efficient trucks.
The Los Angeles plan calls for motor carriers performing drayage to pay a $2,500 fee for a five-year permit, plus an annual fee of $100 per truck.
Both the Long Beach and Los Angeles port plans call for phasing in cleaner trucks beginning in October. By 2012, all trucks must meet 2007 emission standards.
The Los Angeles plan drew praise from environmentalists and union officials but harsh criticism from the trucking industry.
Proponents of the Los Angeles port plan say it will ensure that diesel emissions in the port will be reduced by up to 80% by 2012 and also will establish a new industry business model that will endure over the long term.
However, the trucking industry, which supports the goal of cleaning the air in both ports, has vigorously opposed the Teamsters-backed employee-only business model, Whalen said.
“By adopting a union-devised scheme that, in the name of cleaner air, bans independent owner-operator drivers from providing port transport service — even if they drive new clean trucks — L.A. port officials have now guaranteed that the next venue for the proposal will be in the courts,” Whalen said in a March 20 statement.
Because carriers will have a vested interest in their truck assets, Los Angeles officials said that the employee-only plan will help ensure that carriers are more accountable for truck maintenance and safety, so their trucks will continue to generate lower emissions and retain maximum value over the long term.
Officials said they also believed that the more sophisticated operations of motor carriers will bring business efficiencies common to the port’s drayage industry.
Studies commissioned by the two ports have forecast that the employee-only model probably would raise driver pay, shipping rates but lead to substantial losses in the number of drayage trucks available to carry increasing numbers of containers at the ports. The two ports combined account for more than 40% of all containers imported into the United States.
The fact that each of the ports has approved different drayage business models will only further exacerbate those fears, said Vic La Rosa, president of the trucking firm TTSI.
“Two different plans will create unbelievable chaos in our operations and for our dispatchers and our drivers,” La Rosa said.