SoCal ports study of truck plan reveals job losses, rising rates

SoCal ports study of truck plan reveals job losses, rising rates An economic impact analysis of a $1.8 billion Southern California ports truck re-regulation plan intended to show that the plan would result in dramatic benefits to the local communities and economy.
   Instead it estimates that the plan would eliminate thousands of trucking sector jobs, cost surviving truck firms millions of dollars each in additional costs and lead to an 80 percent increase in container trucking rates.
   The analysis, released Wednesday to the ports, was commissioned by the ports of Long Beach and Los Angeles to prove the validity of the truck plan's goals of dramatically cutting port-generated truck pollution. Introduced in April, the truck plan would set up a licensing scheme where the ports would dictate who can and who cannot be involved in port trucking. The licensed truck companies would be required to hire drivers as employees and use clean burning trucks. The report will be available on the ports' Web sites Friday. A copy of a PowerPoint presentation for the report was obtained by California Connection,
   Conducted by local economist John Husing, the analysis found that even if the truck plan was not implemented as scheduled on Jan. 1, pollution from the 16,000 trucks in the port fleet would remain the same over the five years examined. If the plan is implemented, the analysis mirrored the ports' previous statements and found that truck emissions would be cut by 70 percent to 80 percent.
   Husing noted that the overriding impact of not implementing the truck plan would be limiting growth at the ports. Without the plan, the ports by 2011 would only be able to increase their capacity to about 24 million TEUs, or about 50 percent more than the 16 million TEUs the two ports now handle. Husing estimated in the analysis that the ports have a combined maximum capacity of about 43 million TEUs.
   The study, guided by a scope of work presented to Husing by the ports, examined potential economic and health impacts if the truck plan is implemented.
   Examining a time frame of 2008 through 2025, Husing found that 95 percent of the economic benefit of the ports' truck plan would come from health benefits associated with reduced truck emissions. However, as the truck plan as proposed only makes systemic changes through 2012, it was unclear where the additional benefits claimed by Husing through 2025 would originate.
   Truck driver positions, support jobs and back office staff would all suffer under the ports truck plan according to Husing's findings. The analysis detailed that 50 percent of the truck companies with less than 10 trucks, a total of 123 firms, would be put out of business. More than 180 firms with 11 to 25 trucks would be displaced, nearly 65 firms with 25 to 75 trucks would be lost, and eight firms with more than 75 trucks would disappear due to the truck plan. All told, Husing found that 376 trucking companies would vanish, along with slightly more than 2,250 back office and support jobs. The study did not detail exactly how many truck driver positions would be lost as a result of forcing out the 376 firms. However, a rough calculation using numbers in the analysis suggests that at least 4,400 driver positions would be eliminated by the plan. An American Shipper analysis of the plan in July found that 6,150 driver positions would be lost because of the plan and close to 1,500 support positions.
   The analysis also detailed that if the ports' plan is instituted, the potential existed for large trucking firms like Schneider National, UPS and FedEx Ground to find their way into the port market, further consolidating the current 1,300 truck companies into an even smaller group.
   The analysis also found that the ports' current model of the plan requiring all truck drivers to become employees of port-licensed trucking companies, would cost truck companies nearly $192,000 per truck/driver just to meet the plan's requirements. This includes nearly $50,000 for direct vehicle costs, more than $75,000 for employee costs, an additional $21,000 in yard costs and the remainder in non-driver costs. An average port trucking company with 36 trucks would therefore need to have roughly $7 million to meet the ports' criteria. This is nearly $3 million more than the revenue of the average trucking company modeled by Husing.
   Due to these added costs placed on those surviving trucking companies, Husing predicted, rates per TEU would increase by 80 percent to as high as $540. This figure only includes truck trips out to 50 miles from the ports. Truck trips within 150 miles of the ports would be nearly double the shorter trips, according to the analysis. Truck moves out past 150 miles, such as to neighboring states, would see an additional doubling of the rates.
   Husing also looked at the implications of the Transportation Worker Identification Card program being proposed by the federal government. The program would require all people servicing the ports to have federally run background checks. Husing determined that 22 percent of truck drivers would not apply for a TWIC identification card and an additional 21 percent may not. This group represents nearly 6,500 drivers of the entire port trucking fleet. Without a TWIC identification card, these drivers will not be allowed to work in the ports. Husing estimates that from 2,500 to 3,700 drivers would be lost to the fleet due to the TWIC implementation.
   The ports said on Wednesday that they were intent on setting up their own version of the background checks. 'We can't wait around for the TWIC cards,' said S. David Freeman, president of the Port of Los Angeles Harbor Commission.