Truck stop
Advocates, opponents of clean trucking regulation come to Washington.
By Chris Dupin
The future of port trucking regulation is now a two-front battle as Congress last month took up the issue while a U.S. District Court in Los Angeles weighs whether to permanently strike down features of the Port of Los Angeles' clean truck program.
The House Transportation and Infrastructure Committee's Subcommittee on Highways and Transit held a hearing on the Los Angeles and Long Beach clean truck programs on May 5, while a group of 79 congressmen led by Jerrold Nadler, D-N.Y, have expressed support for a change in federal law 'to ensure that ports can enact and enforce clean truck programs.'
They are calling for a change in the Federal Aviation Administration Authorization Act of 1994 (FAAAA) that would allow Los Angeles and other ports to institute a concession agreement or other local economic regulation on trucking. A spokesman for Nadler said the hearing left him more determined than ever to introduce a bill within weeks that would give ports more power to regulate local port trucking.
The American Trucking Associations successfully obtained an injunction against the Port of Los Angeles' concession plan last year and the two parties argued the case in April and submitted final arguments in May.
ATA and other opponents of the concession plan say it is unnecessary, and ports have made good progress cleaning air without it.
Rep. James Oberstar, D-Minn., chairman of the House Transportation and Infrastructure committee, said the Port of Long Beach has reduced truck pollution by 80 percent and Los Angeles by 70 percent since 2007.
The Los Angeles concession plan, which is supported by groups like the Teamsters union and Natural Resources Defense Council, is opposed by a long list of transportation and shipper groups including one called the Clean and Sustainable Transportation Coalition because of the concession agreement.
The coalition comprises 44 groups ' including broad-based business groups like the U.S. Chamber of Commerce, National Industrial Transportation League, American Association of Exporters and Importers, and transportation groups like the World Shipping Council and the National Customs Brokers and Forwarders Association of America.
The coalition said it's 'ready to work with other ports to address emissions and other issues of importance. However we do not believe that any change to current law regarding trucking as codified in the FAAAA is needed to achieve those ends.'
'The private sector has responded in resounding fashion to deploying the clean trucks that were needed to meet the clear air goals' of the Los Angeles and Long Beach programs, said James Jack, executive director of the Coalition for Responsible Transportation (CRT), another shipper group. 'We would like to see clean port programs implemented at all the ports across the U.S.'
In May CRT and Environmental Defense Fund said they were launching an initiative to develop clean truck programs, beginning with those in the Southeast. They intend to partner with port communities to reduce diesel pollution from port drayage, set goals for air quality improvements and ensure 'drivers have the financial support they need to retire, high-polluting trucks.'
The ports of Los Angeles and Long Beach estimate about 85 percent of port drivers are independent owner-operators, while members of the Intermodal Motor Carrier Conference of the ATA that work in the ports say it is 98 percent. The ATA noted use of owner-operators is common throughout the trucking industry and not unique to port drayage.
'In our view, the main impetus for this employee-driver provision is not environmental mitigation, but an attempt to make it easier for labor to organize drivers,' said the National Retail Federation.
NRF said the employee requirement would have a 'devastating impact' and 'effectively ban 16,000 independent owner-operator truckers from doing business in the Port of Los Angeles.'
NRF cited a 2007 study performed for the two ports that looked at the cost of switching to an approach where trucking companies would be required to own trucks, use employees rather than owner-operators, and park trucks in lots rather than on the street.
'Compared to the costs today, the firm would require a price increase of 80 percent to keep itself in the same position,' study said.
The increase was smaller, 48.6 percent, for a model that looked at the impact of the clean truck program using independent owner-operators.
Those higher costs concerned Rep. John Duncan, R-Tenn., ranking member of the committee, who said, 'history has shown, throughout many different industries, that when an industry is heavily regulated, small businesses are forced out and we are left with only a few large companies dominating the market. This reduces competition, hurts small businesses, and results in higher price.
'Because both ports have been very successful to date, this drastic step toward reregulating the trucking industry is a solution in search of a problem. It's fixing something that isn't broken,' he added.
The Los Angeles port study said, however, that 'even with an 80 percent increase, trucking costs remain relatively insignificant' rising from $150 to $270 on a move near the ports and $300 to $540 on a move to the Inland Empire.
The port called those $120 or $240 increases a 'fraction' of the $2,575 cost from other modes for a container's journey.
And using a median $70,000 value of the goods in a container, the increases would represent only 0.17 percent or 0.34 percent of that value, the port said.
At the hearing, John Holmes, deputy executive director of the Port of Los Angeles, told Congress that as the largest goods movement complex in the most extreme non-attainment air quality area in the country, Los Angeles needed an emissions plan 'to continue to grow and survive.
'Solving air pollution is a challenging task,' he added and most seaport container trade is heavily concentrated in a handful of gateways in the United States. 'Air pollution is indeed a localized issue. We do not support a 'one size fits all' approach to ports.
'Federal law should recognize and provide flexibility with respect to the types of measures local entities like ports have at their disposal to address these challenges,' Holmes said.
He likened his port's desire to regulate trucking to the ability of airports to issue licenses to taxi cabs that operate at their facilities. In addition to requiring employee drivers, the port also wants to require trucking companies servicing the port to park their rigs in parking lots instead of on the street.
Robert Digges, vice president and chief counsel of the ATA, told the subcommittee his group also opposes proposed requirements in the Los Angeles concession agreements that would require truckers to comply with financial disclosure and maintenance plan requirements that he said are unnecessary, anticompetitive and illegal.
Chris Lytle, deputy executive director of the Port of Long Beach, noted that his port reached a settlement with the ATA and is allowing licensed motor carriers at the port to use either employee drivers or independent contractors.
At last month's hearing Oberstar seemed to support the call by Nadler and his colleagues for a change in the FAAAA, saying it was 'not clear whether the pre-emption provisions of federal motor carrier law protect the rights of a state or local government to pursue policies to address environmental concerns.
'As long as a standard or requirement can be construed to affect the price, route or service of a motor carrier, it could be subject to legal challenge. Such a challenge could undermine the progress that has been made in cleaning up the air in Los Angeles and Long Beach to date,' he said.
Fredrick Johring, owner of Golden State Express and a founding member of the Clean Truck Coalition, an association of 10 family-owned trucking firms in the San Pedro Bay area, expressed concern that a change in the FAAAA could give port officials the power to 'adopt new regulations that serve local political interests,' adding that local regulation of trucking could result in some shippers diverting cargo to 'less regulated, business friendly seaports.'
Without the concession agreements, some advocates for the clear air programs questioned whether they are sustainable. 'The Port of Los Angeles has invested tens of millions of dollars to modernize the port truck fleet,' NRDC staff attorney Melissa Lin Perrella noted, but 'it does not intend to subsidize the industry in perpetuity. The purpose of the concession model was to gradually and permanently shift the costs of environmental cleanup onto licensed motor carriers so that when newer trucks are needed, e.g., 10 years from now, the Port of Los Angeles can impose the requirement without future monetary investment.'
Jack of CRT said his organization has created a financial model where the beneficial cargo owner 'agrees to pay an increased rate to their trucking company to support the purchase of clean trucks that will move their cargo.' However, Fred Potter, director of the Teamsters port division, told the panel that rather than investing in equipment the trucking industry is making 'leasing or owning a truck a condition of employment, thereby shifting the burden of capital investment to individual workers.
'This system is wrong,' Potter said. 'As ports have tried to clean up emissions, the phony independent contractor system is putting U.S. taxpayers in the bizarre position of subsidizing the trucking industry and its global multibillion-dollar clients,' pointing to some retailers that Jack said are members of the coalition.
Potter said trucking companies 'force their low-wage workforce to bear all the costs and risks of trucking operations.'
Joe Rajkovacz, director of regulatory affairs for the Owner-Operator Independent Drivers Association, complained the Los Angeles-Long Beach clean truck programs have 'opened the door to rampant abuses of drivers through lease purchasing or essentially renting to own the new trucks,' where the worker has little chance of successfully fulfilling his debts or obligations and ownership remains intangible.
Rep. Peter DeFazio, D-Ore., said he wanted an investigation to look into the truck leasing issue more closely.
Nadler compared requirements in leases that truckers work for a single company as being equivalent to 'serfdom.'
Nationally, use of independent contractors is being scrutinized. California Attorney Edmund 'Jerry' Brown is conducting an ongoing legal campaign against trucking companies he said are misclassifying workers as independent contractors. The Obama administration has proposed $25 million in next year's budget for a joint Labor-Treasury department initiative targeting worker misclassification.