Los Angeles port approves Clean Truck Program

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After more than three hours of debate and public testimony, the Los Angeles Harbor Commission on Thursday, March 20, approved the Clean Truck Program designed to accelerate the replacement of high-polluting trucks with cleaner trucks, provide market incentives to encourage private investment and create a capitalized asset-based drayage system at the nation’s largest container port.

The plan now goes to the Los Angeles City Council for final consideration. “The passage of L.A.’s Clean Truck Program puts us on the road toward cleaner air for the benefit of all Southern Californians,” said S. David Freeman, Los Angeles Harbor Commission president. “This historic vote is a victory for our health, our environment and our economy.”

The port’s CTP is designed to encourage an evolution of the port drayage market toward an asset-based system in which licensed motor carriers enter into drayage concession agreements with the port and are responsible for owning and maintaining the truck assets used to perform drayage services at the port under the concession. Port of Los Angeles drayage concessionaires also must commit to using employee drivers for port drayage by year 2012 through a phased-in schedule, with flexibility afforded for peaks and troughs in demand by use of temporary or part-time employees.

“Our program is designed to more rapidly address the public health issue generated by drayage truck pollution and move toward an asset-based system that will provide long-term sustainability in this fragmented market,” said Geraldine Knatz, port executive director. “An asset-based drayage system with a more stable work force will provide more safety, concessionaire accountability and certainty that our port will only have to fund the turnover of our fleet this one time and not again in seven to 10 years from now.”

The port argues the present system of LMCs and owner-operators provides no incentive for improving efficiency and no financial means to replace the existing truck fleet with cleaner, more efficient trucks. As operators with a vested interest in their truck assets, port concessionaires will be more accountable for proper truck maintenance and safety standards, so their trucks will continue to generate lower emissions and retain maximum value over the long haul, the port believes. Concessionaires also will have more incentive to pursue business efficiencies that are common within the trucking industry, like operating fewer trucks to accomplish the same number of container hauls.

The American Trucking Associations has said it would bring a lawsuit if the port attempted to force motor carriers to hire employees. ATA argues the plan is illegal and that the purpose of federal deregulation of trucking in 1980 was to allow carriers mostly unrestricted access to routes and markets nationwide to encourage competition. “We’re going to go after Los Angeles with everything we’ve got so their plan goes to hell in a handbasket,” ATA spokesman Curtis Whalen told the Los Angeles Times after Thursday’s vote. “We will win, and we will win handily.”

Whalen, who referred to the L.A. port plan as a “scheme to unionize port drivers,” told the Los Angeles Times the association had been working toward an agreement with the Port of Long Beach and that city’s mayor, Bob Foster, whom he called “a reasonable guy, unlike that other one.” Whalen was referring to Los Angeles Mayor Antonio Villaraigosa, who has long argued that port truckers deserve better wages and benefits.

“There may be lawsuits that will delay our effort, but we will not be deterred,” Villaraigosa told the Times. “We think we have a strong legal case, and we are moving ahead with the most ambitious plan to clean up a major port in the United States and perhaps the world.”

L.A. port commissioners had the support of the International Brotherhood of Teamsters, environmental groups and health advocates, including the American Lung Association. “The existing system is a scam,” Los Angeles Harbor Commission President David Freeman told the Times. “It’s a scheme by shipping companies to avoid responsibilities of an employer, and we’re calling a halt to it.”

Long Beach officials cited the legal threats when eschewing the employee provision, saying a court fight would delay the ultimate goal of cleaning the air. However, a recent study commissioned by Los Angeles from Boston Consulting Group concluded an employee-based plan likely would raise shipping costs but would be more sustainable in the long run.

In November 2007, the Los Angeles and Long Beach Boards of Harbor Commissioners approved a progressive dirty truck ban schedule that begins Oct. 1, 2008, by prohibiting all pre-1989 trucks from working in port drayage. By Jan. 1, 2012, all drayage trucks operating in the port complex will be required to meet 2007 federal emissions standards, which will reduce port-related truck pollution by an estimated 80 percent. In December 2007, both port commissions approved cargo fee tariffs to accelerate the replacement of the existing truck fleet by assessing a $35 gate fee per 20-foot container unit (TEU) to generate funds to help underwrite the replacement of the existing truck fleet.

The Port of Los Angeles Clean Truck Program is consistent with the recently approved Port of Long Beach Clean Trucks Program in terms of the truck ban schedule. At Thursday’s meeting, the Harbor Commission approved a revised start date for the collection of the Clean Trucks cargo fee to Oct. 1, 2008, in order to align implementation dates with the Port of Long Beach’s clean truck initiative and allow more time for distribution of radio-frequency tags and reader installation at terminal gates.

The Port of Los Angeles Clean Truck Program includes the following provisions:

Cargo fee exemptions

  • All privately funded 2007 compliant trucks – including retrofits, LNG, electric, alternative fuel or other acceptable “best technology” vehicles (e.g. hybrid or hydrogen) – will be exempted from the $35 per 20-foot container (TEU) Clean Trucks Fee at port terminals.
  • Concessionaires with privately funded 2007-compliant trucks will not be required to turn in an old truck to scrap as part of their permit agreement.
  • All publicly funded LNG, electric, alternative fuel or other acceptable “best technology” vehicles will be exempted from the Clean Trucks Fee ($35 per 20-foot container) at port terminals.
  • No exemption will be given to publicly-funded 2007-compliant diesel trucks or retrofits.
  • Port of Los Angeles Clean Truck Program-funded trucks will require a truck trade-in for scrapping and must become a regular-use drayage vehicle (an averaged minimum of six trips per week).
  • Concession requirements

  • Concessions will be provided to licensed motor carriers only, not owner-operators.
  • Concessionaires will pay a $2,500 fee for a five-year permit, plus an annual fee of $100 per truck.
  • All drivers of trucks being used to carry out a concession (i.e., trucks accessing port property) must be employees of the concessionaire upon the completion of a five-year transition period.
  • Concessions may be revoked at any time if the concessionaire is not compliant with the requirements for licensing, bonding, insurance, maintenance, safety or security.
  • Concessionaires must agree to meet port standards for technology and efficiency (promoting the use of current or future tools like the virtual container yard).
  • Financing

  • Financing will be provided to concessionaires only, providing grants for up to 80 percent of the purchase of 2007 standard diesel and LNG trucks.
  • Low-cost leasing options will be provided.
  • Retrofits meeting 2007 emissions standards also will be funded in full.
  • CTP financed or leased trucks must be used as full-time drayage vehicles (average minimum of six trips per week).
  • CTP trucks must meet CTP specifications and must be purchased from a CTP authorized vendor.
  • The port also will create a Scrap Truck Buyback Program to help accelerate the removal of pre-1989 trucks from port service, paying parties $5,000 to turn in their pre-1989 trucks. Concessionaires who receive CTP-funding are not eligible for the $5,000 Scrap Truck Buyback.

    The port also will offer a Truck Procurement Assistance Program for concessionaires who apply for truck funding in order to obtain the best possible truck prices through volume discount pricing agreements the port will forge with approved original equipment manufacturers and associated dealers – either independently or with the Port of Long Beach. Through this program, the port hopes to identify a range of trucks with appropriate emissions reduction capabilities at discounted prices and make this range of options available to CTP program participants.