Life on the Road – Trucking News Blog

It seems that the older I get the more easily I’m irritated. Over the last week or ten days I’ve read a number of articles dealing with the ports of Los Angeles and Long Beach; with each new article I find myself in an increasingly agitated state. Now, after having experienced a particularly yucky Christmas Eve morning back in 1986 (I hold a grudge for a very long time), I can be irritated by the mere mention of the Port of Long Beach – so I might be more than a little biased. Nonetheless, it seems to me that the two ports Boards of Commissioners are set on a course that would result in the loss of work for thousands of Owner/Operators, a massive increase in the cost of goods imported through these ports, and a virtual monopoly for the few trucking companies fortunate enough to be in a position to capitalize on the new regulations being proposed.

All this in the name of providing a more environmentally friendly port.

You might not realize this, I know I didn’t, but more than 40% of all containerized cargo moving in and out of the U.S., and that’s a whole bunch, moves through the ports of Long Beach and Los Angeles. Measured in the equivalent of 20-foot containers, the international standard, its estimated that more than ten million containers will transit the twin ports this very year. That’s almost 30,000 containers every single day. Whew, that’s a lotta truckin’ and, at least according to the California Air Resources Board (CARB), a lot of diesel pollution. As a matter of fact, they’ve estimated that the ports and their related activities are responsible for 10% of the area’s air pollution.

Please don’t misunderstand my irritation here. I’m not some idiot opposing the idea of cleaning up the air and the environment. I’m all for it. But I’m not at all sure that the methods being proposed by the respective Boards are going to accomplish their worthy goals.

The Proposals

The way I understand it, the Boards of Commissioners for the Ports of L.A. and Long Beach are proposing a multi-pronged attack on the pollution generated by their operations. A little history: In 2006 Governor Schwarzenegger vetoed a bill that would have resulted in a $30 fee being charged for each loaded container moving through a California port (and I’m thinking that applies to 20′ containers – so 40′ containers would be charged $60, etc.). He also indicated that he’d veto any similar bills brought forward in 2007 but, now, with completed negotiations concerning the ways and means under which the funds would be allocated, he’s agreed to sign a similar bill in 2008.

The Terminator’s intentions might be moot. The port Boards believe they have the authority to levy these fees regardless of state law. That means an increase in revenue, to just these two ports, of approximately $300 million per year. Not only that, if growth projections are on track, the revenue from these annually realized fees will be $600 million by 2020.

Soooo…you may be asking yourself: “Just what in the world will all this money do to reduce air pollution?” Well, the ports are intending to use this new revenue in a couple of ways; first, they’re going to upgrade their infrastructure. That includes the electrification of both cargo and cruise ship terminals, so that ships can shut down their engines while in port, and all cargo-handling equipment will be replaced or modified to meet the strictest EPA standards.

The second thing they’re planning on doing with this money, though, is “help private operators acquire cleaner equipment.” Hmmm. I wonder who these “private operators” might be?

Well, for our answer, let’s look at the second part of their plan of attack; the portion of the plan from which this post derived its title. The powers that be are proposing regulations that would essentially eliminate most Owner/Operators from the ports. According to an opinion piece in the Sacramento Bee the rules

“would essentially end the port’s dependence on thousands of owner-operated trucks, many of them driven by recent immigrants who cannot afford to upgrade their equipment to meet the new standards. (how do they support that assertion, I wonder? EPH) They would be replaced by bigger trucking companies using employee-drivers, at a potential increase of 80 percent in the cost of truck transportation, according to an economic study commissioned by the ports.”

Implicated Proposal Results

The two ports plans to upgrade their infrastructure is probably a good idea, but I’m not at all convinced that terminal electrification plans will do a whole lot to eliminate pollution. People tend to forget that electricity must be generated. Sure, you can pull the power from hydro-electric sources like Hoover Dam but, since that power is already allocated to other consumers, it just means that they’ll have to meet their needs by other means. Meaning the electricity will come from power plants that are already stressed to the max. Remember the black- and brown-outs of just a few years ago? Electrification simply moves the source of pollution from the port to the plant.

The most insidious implications of these proposals, however, lie with the plans to completely replace all Owner/Operators with company owned vehicles. An article in Land Line magazine states that

“the proposed Clean Trucks Program…would ban all trucks that weren’t registered concessionaires from the ports. The program would require all truck drivers at the port to be employees of concessionaires, which would be limited by an application process that would favor trucking companies with the largest amount of financial assets, among other considerations.”

Let me highlight two statements from the quotes:

• “a potential increase of 80 percent in the cost of truck transportation”
• “an application process that would favor trucking companies with the largest amount of financial assets”

Now I ask you, why will the cost of truck transportation increase by 80%? Well, like you, I can think of a few reasons but leading my list is: a massive increase in truck transport rates. But take a look at that second quote. The application process favors financially flush trucking companies. Companies that would, no doubt, just love to eliminate competition from Owner/Operators and, without that competition, those companies would be free to jack up transportation rates.

Understand, I have no problem with increasing transportation rates but the implications here are immense when you consider the effect of imposing an 80% increase in transportation costs on 40% of all containerized cargo moving in and out of the United States. On top of that, this all makes me wonder. According to the Land Line article Joe Rajkovacz, OOIDA’s regulatory affairs specialist, stated that:

“CARB’s proposed port rule language may affect more truckers than the agency intends. Trucks with 1993 engines that meet every other California emission regulation could be prevented from picking up even an occasional load at any port or rail-yard in the state, and trucks with engines from 1993 to 2004 would need retrofits, some of which wouldn’t otherwise be required.”

“They’re offering up all sorts of financial inducements for their local in-state trucks to be able to comply with these regulations – and our small-business folks from around the country would have to comply with the same regulation without any sort of assistance whatsoever,” Rajkovacz said. “It’s not exactly a level playing field.”

Apparently the California Air Resources board is holding an informational workshop on Tuesday, October 30th, and will come to a decision regarding the regulations at their board meeting scheduled for December 6th and 7th. Fortunately a team of OOIDA representative of will be at the October 30th workshop. Let’s hope they can hold sway.