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American ShipperIntermodal

Long Beach port breaks ranks on truck licensing plan

Long Beach port breaks ranks on truck licensing plan

Port of Long Beach commissioners, breaking ranks with the neighboring Port of Los Angeles over a jointly developed $2 billion truck replacement program, will vote this week to implement a licensing plan mandating which trucks can and cannot operate within the port.

   Long Beach's proposal foregoes a contentious labor component that threatened to derail the entire program.

   The five-member Long Beach Board of Harbor Commissioners will vote Tuesday on what port officials describe as the 'final component' of the truck plan that seeks to replace or retrofit the 16,800 drayage trucks servicing the two ports on a frequent and semi-frequent basis.

   In addition, the Long Beach commissioners will vote to approve additional staff recommendations on the truck plan including financing and procurement details of how the ports' drayage fleet vehicles will be replaced, a goal that half of the replacements be powered by liquefied natural gas, and exemptions for certain trucks from a $35-per-TEU container tax passed earlier this year by the ports.

   The truck plan, introduced in March 2007, seeks to replace the more than 16,800 drayage vehicles that service Long Beach facilities and those at the neighboring Los Angeles port.

   In December, the two ports jointly approved the first component of the truck plan. The progressive multi-year ban, set to take effect Oct. 1, will begin by barring entry to the ports of all pre-1989 model year trucks. Two additional ban deadlines will eventually bar all per-2007 trucks, unless retrofitted to 2007 emission standards, from the ports by Jan. 1, 2012.

   Last month the two ports instituted a second component of the truck plan, approving a $35-per-TEU fee on trucks entering or leaving port facilities. The tax money collected, projected to be $1.6 billion, will be used to pay for the truck plan.

   The licensing component of the plan to be voted on next week, and referred to by the ports as a 'concession model,' will ban trucks from the port that do not have a port-issued license. To obtain a license, a Licensed Motor Carrier will be required to meet numerous port-defined criteria and agree to certain business practices.

   The current criteria for LMC to obtain a port license are:

   ' Be an LMC in good standing.

   ' Register all trucks in the LMC's fleet with a port database.

   ' Give preferential hiring to drivers with a history in the port drayage fleet.

   ' Abide by the ports' clean truck requirements.

   ' Maintain a comprehensive safety and maintenance plan for all trucks in LMC's fleet.

   ' Ensure compliance with all existing driver training, vehicle maintenance, safety inspection and hours of service regulations.

   ' Adhere to local, state and federal security regulation, including maintaining TWIC card enrollment for employees or drivers.

   ' Offer health care to all drivers hired by LMC.

   ' Maintain a ports-supplied radio frequency identification tag on each truck in the LMC's fleet.

   'Port staff is recommending trucking concessions as the fastest and most effective way to meet our critical environmental objectives and provide the accountability we need for clean air, while giving the trucking industry the flexibility to meet its business challenges,” said Port Executive Director Richard Steinke.

   Missing from the licensing requirements issued by Long Beach was a criteria that had been promoted heavily by the International Brotherhood of Teamsters, Los Angeles City Mayor Antonio Villaraigosa and his appointees at the city's port, and Long Beach port commission President Mario Cordero. The criteria would have required LMCs to hire only per-hour employee-drivers, unlike the vast majority of current ports drayage drivers that are independent owner-operators.

   The employee-only criteria raised the ire of the trucking and transportation industry, with several industry associations calling for federal investigations of the entire truck plan or threatening to litigate it if implemented.

   Long Beach's criteria now provide that an LMC can obtain a port access license with either independent owner-operators, employees, or a combination of the two.

   Port of Los Angeles officials have been vehement in their support of the employee-only criteria. However, officials did not return calls for comment.

   To date the two ports have moved in lockstep on approving identical language on the plan. Senior executives at both ports have said that if the ports do not move in unison on the plan, it is uncertain if the plan could remain viable.

   However, chinks in the collective armor of the two ports' cooperation on the plan have shown up in the past.

   During an abortive Long Beach commission meeting late last year to vote on truck plan rules, Long Beach harbor commissioner James Hankla responded to criticism that the ports have delayed too long on approving the ports Clean Air Action Plan — which includes the truck plan — and publicly expressed frustration at the delays caused by the employee-only criteria.

   The Port of Long Beach, admitting they do not know exactly what their Los Angeles counterparts will do, agreed that the ball is now in the Los Angeles court.

   'It is up to them now,' said Long Beach port spokesman Art Wong. 'Do they want to keep delaying the program?'

   The truck plan was originally to be approved as a single measure in the middle of last year. However threatened litigation and industry outcry over the employee-only criteria forced the ports to delay voting on the plan numerous times. The ports eventually began parsing out portions of the plan to approve, starting with the truck ban in December.

   The American Trucking Association, which has repeatedly stated it would sue the ports over the employee-only criteria, praised Long Beach port officials for moving forward on the plan.

   'We applaud the Long Beach port for tiring of the delays that have been caused by the Los Angeles mayor and his Teamster allies in holding up the clean air portions of the truck program which this industry certainly supports,' said Curtis Whalen, executive director of the Intermodal Motor Carrier Conference, a branch of the ATA.

   In addition to the licensing criteria, Long Beach port commissioners will be asked Tuesday to approve four additional port staff recommendations for inclusion in the truck plan.

   The first recommendation seeks to adopt a funding program and criteria for how drayage vehicles will be replaced.

   According to the port plan, truck owners will be offered three financial mechanisms for replacing trucks covered under the truck plan: a seven-year, lease-to-own option with port-picked financial institutions, an up-front grant toward the cost of a vehicle, and an up-front grant for retrofitting applicable trucks.

   The lease-to-own option would require the lessee to pay $500 to $700 per month, and the ports will offer to supplement the lessee's credit worthiness with their own.

   The grants to purchase a vehicle will cover $60,000 to $75,000 of the full purchase price for clean diesel trucks, and $90,000 to $120,000 toward the full price of an LNG or other alternative fuel powered truck. In both scenarios, truck owners would still be required to make up the difference between the grant and the full purchase price. A typical new clean diesel truck runs about $75,000 to $115,000 depending on engine size and configurations. LNG-powered trucks typically sell for more than $200,000.

   The three programs will be available to independent owner operators and licensed motor carriers.

   An additional recommendation to be considered will set a port 'goal' of having more than half of the drayage fleet replaced with LNG or other alternative fueled vehicles.

   A final proposal for consideration Tuesday will exempt certain trucks from paying the $35-per-TEU container tax previously agreed upon by the ports. Previously set to take effect June 1, the commissioners could approve a postponement of the start date to Oct. 1, coinciding with the start of the first model year ban.

   Set for a 100-percent exemption will be all LNG or alternative powered trucks and all pre-2007 model year trucks that meet 2007 emission standards. A 50 percent reduction in the container tax will be offered to those pre-2007 trucks that have been retrofit with pollution control devices and can meet 2007 emission standards. ' Keith Higginbotham

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