FMC commissioner comments on port concessions
Ports should have the right to use concession agreements to gain better control of private sector companies working on their property, new FMC Commissioner Mario Cordero said Monday.
Under a concession model, a government entity specifies the rules under which a company can operate within its area of jurisdiction.
Business groups are unhappy with the Port of Los Angeles for imposing a concession plan on motor carriers that want to service marine terminals at the port as part of an initiative to reduce harmful air pollutants.
The Port of Los Angeles’ program mandates that trucking companies secure concessions from the port for any truck to maintain access to the port’s container terminals. The most controversial part of the program requires motor carriers to use salaried, employee drivers rather than independent owner-operators. The concession also requires that companies prepare a maintenance plan for trucks and post placards on trucks referring members of the public to a phone number to report concerns regarding emissions, safety and security compliance. Finally, the concession requires that trucking companies make arrangements to ensure trucks are parked off-street when not in service.
There are almost 900 trucking companies now licensed to operate in the Port of Los Angeles.
Major motor carriers and their customers strongly opposed Los Angeles’ approach, saying the port was trying to regulate interstate commerce in an effort to replace older trucks with newer ones that meet federal emissions standards. They claim the rule will force smaller trucking firms out of business, increase driver wages and add hundreds of millions of dollars in additional drayage costs. The port argued that it needed the concession agreement as leverage to ensure trucking companies invest in modern equipment.
The Port of Long Beach did not impose an employment mandate to achieve its clean air goals and has seen an 80 percent reduction in truck pollution from 2008 levels.
Cordero served eight years on the Port of Long Beach Board of Harbor Commissioners before being nominated by President Barack Obama to sit on the FMC.
In response to an audience question at the National Customs Brokers and Forwarders Association of America’s fall conference, Cordero said that his position on concessions is motivated by a desire to bring seaports to the level of airports that use regulatory power to make their operations more efficient.
But having the right to establish a concession doesn’t mean that ports should be able to set any conditions they want, such as an employee mandate for trucking firms, the former political science professor said.
“I doubt seriously the employee provision is going to be held up on appeal,” Cordero said, referring to a challenge by the American Trucking Associations in the 9th Circuit Court of Appeals.
“So we must not confuse a structure for a port authority that’s necessitated with controversial provisions,” he said. — Eric Kulisch