L.A. port begins $44M payout to Clean Truck Program concessionaires

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The Port of Los Angeles announced Tuesday, Dec. 23, that it has begun the process of distributing an estimated $44 million in incentive checks over the coming weeks to its Clean Truck Program concessionaires that already have committed to deploying new privately-funded clean trucks into drayage service in advance of CTP schedule requirements. The port says the early infusion of 2007-compliant trucks enables it to achieve immediate and significant emissions reductions – well ahead of the progressive truck ban deadline.

Paying participants $20,000 for each U.S. Environmental Protection Agency 2007-compliant truck used at the port, the port projects that the incentives will result in an incremental reduction of 419 tons of nitrogen oxide emissions in the first year of the CTP. The ’07-compliant trucks further will reduce particulate emissions by 22 tons over original projections, the port says.

“We are very pleased to deliver on our commitment to the 107 Licensed Motor Carriers that signed on as concessionaires and made an early financial investment toward cleaning our regional air through their purchase or lease of 2007-compliant trucks,” says Geraldine Knatz, the port’s executive director. “In these tough economic times, we are especially gratified to distribute incentive payments to the many local, small- and medium-sized trucking companies that have served our port for decades. These companies have made significant investments to purchase more than 2,200 low-emission trucks with the goal of participating in a future trucking system that is greener, safer and more efficient.”

To qualify for the incentive program, trucks had to be funded privately and be committed to make an average of six trips per week for five years. Incentive program participants also could apply to receive a cash “Efficient Use” incentive payment of $10 per port dray with their ’07-compliant truck if they achieve a target of 600 qualified drays in and out of the ports of Los Angeles and Long Beach and 300 of those drays are for Port of Los Angeles cargo during the first year of the CTP (Oct. 1, 2008-Sept. 30, 2009). The per-truck payout limit for this additional incentive would be $10,000.

The CTP program immediately banned trucks built before 1989 – more than 10 percent of port trucks as of Oct. 1 – and requires that all trucks meet 2007 emissions standards by 2012.

The American Trucking Associations on Dec. 19 filed its reply brief in the Ninth Circuit Court of Appeals in its effort to secure an injunction against the enforcement of the ports’ concession plans. ATA’s litigation focuses on the ports’ requirement to force carriers to sign concessionaire agreements with the ports. The association argues that the concessions would impose a broad range of operational requirements that recreate a regulatory environment comparable to state intrastate economic regulation, which is federally preempted. ATA also says it is especially troubled by the Port of Los Angeles’ plan to ban independent contractors within five years.

With the courts refusing to block the concession agreements initially, 598 companies had signed up as of Oct. 1 to participate in the concession program.

The Federal Maritime Commission on Oct. 29 determined by a 2-1 vote that implementation of certain portions of the CTP by the ports are likely, by a reduction in competition, to produce an unreasonable increase in transportation cost or unreasonable reduction in service. The commission authorized staff to file a complaint with the U.S. District Court for the District of Columbia pursuant to section 6(h) of the Shipping Act of 1984, to enjoin aspects of FMC Agreement No. 201170, including concession requirements that mandate exclusive use of employee drivers.

FMC Commissioners Harold Creel and Rebecca Dye commented Dec. 17 that, given the significant changes in the nation’s economic situation, the commission must continue to fulfill its statutory obligations to ensure that the agreement will not unreasonably reduce competition in the ports. Such reduction would raise prices at a time when the American consumer can least afford any added costs, and at a time when owner-operators can least afford to be driven out of the port drayage market, Creel and Dye commented.