SoCal ports plan to forge ahead with truck plan
Southern California port commissioners, despite facing a nearly unified front of industry and environmental opposition to the efficacy of a controversial port drayage re-regulation plan, remain committed to moving forward with their plan as proposed, saying the current port drayage system 'does not work' and is populated by 'bottom feeders.'
Speaking at a nearly seven-hour-long public meeting Friday, commissioners from the ports of Long Beach and Los Angeles asked the goods movement industry to 'overcome its principles and work with us.' The commissioners also warned that if the industry did not cooperate with the ports regarding the plan, the drayage fleet faces a shortage of drivers, delays in the delivery of cargo, and a situation where the ports would not be able to grow to accommodate more cargo in the future.
The rare joint session of the Long Beach and Los Angeles harbor boards, called an information gathering meeting by the ports, afforded the public a rare opportunity to listen to leaders from both sides of the issue — port commissioners on one side and the goods movement industry on the other — to espouse their views on the plan.
Industry panelists were questioned pointedly by commissioners as to what exactly their groups found at issue with the ports plan. Environmental leaders, also invited to speak and initially vocal proponents of the plan, were cut off by commissioners during the meeting for not providing 'constructive comments' and castigated for criticizing the ports over delays in implementing the truck plan.
Initially proposed almost a year ago, the ports' truck plan was formally announced in March and originally scheduled to be approved by the two five-member harbor boards in July. Failing to call this scheduled vote, two subsequent rescheduled votes were also cancelled, and the plan is now unlikely to be voted on before the middle of December.
The five-year $1.8 billion plan, which has drawn praise from labor and environmental groups while garnering near universal scorn from the transportation industry, seeks to re-regulate the truck industry within the ports. Born out of an environmental plan to replace or retrofit the aging fleet of more than 16,000 short-haul trucks that service the ports, the plan has morphed over the past year to also include labor management, security and financial status criteria for port truck companies.
Under the plan, the ports would issue licenses to an undefined number of truck firms that agree to meet ports-defined criteria. Independent drivers or those drivers working for companies without licenses would be barred from working within the ports when the plan starts, now set for Jan. 1, despite a growing realization that this date is unrealistic.
Truck companies wishing to receive a port license would be required to hire only per-hour employees, as opposed to the independent contractor model that dominates the drayage system now.
Licensed trucks built before 2007 would be charged a fee for each entry and exit at a port facility, whether loaded or unloaded.
Together with port contributions of about $170 million a year and at least $400 million in state bond money being sought by the ports, the collected truck fees would pay for the second component of the plan — replacing or retrofitting the trucks to meet stringent emission standards.
The Teamsters union, unable to organize the port truckers despite repeated attempts since de-regulation in 1980, is heavily supporting the ports' plan. Transportation industry experts believe that if the plan is implemented as written, it is likely to lead to a consolidation of the port-serving trucking firms and probable unionization of the surviving truck firms.
Port and city officials made it clear from the very start of the meeting that the plan was going to be moved forward, despite more than 40 industry groups taking a public stance against the plan.
Los Angeles City Councilmember Janice Hahn told the audience at the start of the meeting, 'the time for talk is over. We don't need more studies or public hearings. Now is the time to approve this plan.'
As the meeting progressed and the industry and environmental panelists offered their comments, the commissioners reiterated the idea that the plan would move forward as devised.
'You do understand,' Los Angeles port commission President S. David Freeman asked the industry panelists, 'that this aggressive clean air plan — that it is not in your best interest for us not to succeed.'
John McLaurin, president of the Pacific Merchant Shipping Association, which represents most of the West Coast shipping lines, told the commissioners that his group opposes the labor portions of the plan because the ports are overstepping their authority in trying to impose it.
'You are asking us to ignore what we consider to be a fundamental problem with this proposal with regard to the legal aspects of the program,' McLaurin said.
A state-implemented plan to clean up the trucks would be more appropriate and equitable, he said, adding the ultimate goal is 'how do we satisfy the rule of law and clean up the truck as fast as possible?'
Other members of the industry appealed to commissioners more directly.
'If we all sat back and did nothing and you implemented this plan, you would be going off a cliff,' Mike Lightman of the Harbor Truckers for a Sustainable Future told the commissioners.
Lightman, whose group represents some of the local drayage drivers, added, 'As much as I'd like to have this done yesterday or next week, there isn't the money to do it. There won't be the drivers to move the products off the docks. It won't work as it is written.'
Patty Senecal of the International Warehouse Logistics Association, said her group wants a consensus plan that avoids litigation and cleans the air as fast as possible.
'You have mentioned independent owner-operator models, employee models, and a blend of the two. We would ask that you allow that to continue and not mandate the employee provision,' she told the commissioners.
Despite the input from the panels, Freeman reiterating previous public statements, making it clear that he wants to see large trucking firms supplant smaller firms in the port drayage market.
'What could we do in our program that would make this attractive to your company?' Freeman asked the representative from J.B. Hunt Transport Services, a national trucking firm based in Arkansas that primarily utilizes 13,000 employee drivers.
J.B. Hunt representative Bradley Hicks made the point that his firm does not pull cargo in or out of the two ports for the simple reason that rates are too low in port drayage to make it profitable for his firm. To afford the capital investment needed to maintain newer tractors and the employee drivers, Hicks said that changes would have to take place.
'There are thresholds that need to be overcome' before his firm would entertain the idea of entering the port market, Hick said. The main one is that contracts between cargo end users and his firm would have to be longer than the typical one-year port-trucking contracts.
'The only way we would be willing to grow into that environment is with a longer term commitment longer than a jump-ball, 12-month contract,' Hicks told the commissioners.
Freeman said that the system has to change. 'With the owner-operator system we have now there is too much temptation to reach for the bottom, and companies like Mr. Hicks' and others, cannot afford to enter this market because the owner-operators will undercut them,' he said.
Freeman, for the first time, seemed to indicate that the primary reason the ports want the larger trucking firms like J.B. Hunt to enter the ports is not necessarily to help the drivers, but to make up the driver shortages predicted by the introduction of the federal Transportation Worker Identification Card security program.
The ports' economic impact study of the truck plan also estimated that roughly 20 percent to 40 percent of the current port trucking fleet may not seek a TWIC card when it is introduced at the two ports next year. Drivers without these federal security IDs will be banned from entering the ports.
Freeman said it is essential to attract the large trucking firms to make up for the shortages that will come from the TWIC introduction.
Supporting Freeman, Long Beach Commission President Mario Cordero agreed that the ports are correct in looking at the employee-only model as a solution.
More worrisome to Freeman however, was how to stabilize what the ports perceive as a destabilized workforce of truckers.
'What can we do to eliminate the bottom feeders?' Freeman asked the panelists, referring to trucking firms undercutting each other and lowering rates, 'so that we can get some stability in this workforce.'
The California Trucking Association's Julie Sauls responded to Freeman's comments by agreeing to the idea of stabilizing rates, but added, 'I would caution against saying that this cannot be done by an owner-operators. To say that, to be honest, is un-American.'