First Thoughts
  By Dan Gilmore - Editor-in-Chief  
  April 8 , 2010  

Supply Chain News: Port of LA, Clean Trucks, Owner-Operators, and You


A couple of weeks ago, we started to do a story for the Transportation section of our weekly of On-Target newsletter on what we thought was a small story on the on-going legal wrangling around independent truckers and the Port of Los Angeles.


We saw that the American Trucking Associations had been very active in defending the rights of the independents in the conflict, which struck me as a bit odd – I thought the ATA didn’t really have independent truckers as members. So we contacted the ATA to gain a better understanding of what was going on – and found there is much more to the story than we thought, and that shippers need to be on guard as well.


“It’s natural for the ATA to fight for the rights of the independents, as many of our carriers make broad use of independents,” Clayton Boyce, Vice President of Public Affairs and Press Secretary American Trucking Associations, first told me in a recent phone call. “But the issue is much deeper than that.”


And so it is – involving some very questionable goings on, strange alliances between “blues and greens,” and a dispute that, depending on the outcome, could have significant ramifications for trucking regulations and unionization across logistics operations in the US. I thought it was worth sharing in this column.

Gilmore Says:

Shippers and logisticians should at least sit up and pay a lot more attention to this issue than most have to date, including me.

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At the heart of the issue is to what degree state and local governments can regulate the trucking industry, an ability now largely limited by Federal Aviation Administration Authorization Act (FAAAA), which quite logically was created to avoid the chaos and costs that would result from different rules in hundreds of jurisdictions across the US. However, that status quo is being challenged by the Port of Los Angeles, nominally on environmental grounds. Others, including labor lobbyists, are pushing to amend the FAAAA itself, also for what are said to be environmental aims.


But in the end, the changes are really meant to aid unions, not the environment.


Some history first.


In 2007, both the ports of Long Beach and Los Angeles, which together handle some 40% of US container volumes, announced a so-called “Clean Truck” program to address perceived air quality issues in the port and larger metro area. The stated goal was to get thousands of older, polluting drayage trucks off the road.


Just another Green program, whether you think it’s needed or not, but no big deal, right? Wrong.


The new rules also allowed the ports to substantially regulate what types of trucks (and trucking firms) could serve the port. It forced drayage operators to purchase a “concession,” and comply with tough reporting requirements and other burdens,  a program to begin in 2008. The burden would fall heaviest on independent owner-operators, who make up the majority of the 16,000+ drivers who serve the two ports.


But it gets worse. Under the plan, owner-operators would have been effectively banned from serving the Port of Los Angeles within five years. Long Beach, however,  did not include such a ban.


The mayor of Los Angeles then and now is Antonio Villaraigosa – a former union organizer. Not long before the announcements by the ports, Villaraigosa was said to have met several times with senior Teamsters officials.


The goal all along, says Boyce, was not about clean trucks, but to again unionize the largely un-unionized drayage truck fleet.


“The biggest issue is that L.A. tried to ban independent owner-operators, obviously at the request of the Teamsters union, which would benefit hugely if it could narrow the competition down to a few big companies, then set out to organize them,” the Los Angeles Daily News wrote not long after this all the began.


Many of the new requirements would seem on their face to move the ports into locally regulating trucking in a way that is contrary to the provisions of FAAAA. Should be an easy court victory to block this action, right?


Well, it is California, and it is the legal system. And, it turns out, there is a provision in FAAA to allow local trucking regulation if required for “safety” concerns. And of course, the supposed truck pollution was cited by the port of LA as a public safety issue, justifying its ability to impose the regulations.


Boyce also notes that trucks actually account for only about 10% of the pollution in the port areas, with 70% coming from the cargo ships themselves, which have done little or nothing to improve their engines to minimize pollution (as opposed to what has happened with trucks) and which burn the high-sulfur bunker fuel.


The ATA soon sued in federal district court, seeking an injunction against the concession requirements and eventual owner-operator ban. It lost.


It then appealed before the circuit court and won a temporary injunction, but by no means a full victory, in March. 2009. A later ruling stopped some of the concessions but not others.


As noted, the Port of Long Beach pulled back from the owner-operator ban and some of the most onerous concessions. But the Port of LA, fully backed by the city, kept fighting, and has spent some $8 million in legal fees over the issue, at a time when it is claiming near bankruptcy.


Then there is another environmental angle. I must admit I haven’t followed much the “blue and green” coalition movement, in which labor groups partner with environmental ones to pursue joint agendas. The Teamsters were able to get the Sierra Club and others to back the Port’s plans. How much these groups really looked into it is not known. When Long Beach backed off its similar effort, the Los Angeles Daily News wrote that “As a result, a Teamsters-inspired campaign, led by "environmental" groups no one had ever heard of, tried to vilify Long Beach Mayor Bob Foster for supporting the Port of Long Beach's program, and described anyone who backed it as ‘immoral.’”


The court activity thus far has only been at the injunction level – a temporary ban from enforcement of the new rules. The full case to decide if the rules can stand is going to trial in the next couple of months. Meanwhile, Congressman Jerry Nadler (D-NY) has written a “Dear Colleagues” letter that supports the notion of changing the FAAA to allow ports to regulate emissions and other areas related to the environment – signifying potential Congressional action in the area.


“Many of the players here on the other side of this issue are simply lying – and you can quote me on that – about what the real intentions are here,” Boyce told me. “It has nothing to do with the environment.”


So, why should you care?  

  • If this does ultimately go through, either by court decision or amendment of the FAAA, it will ultimately add substantial shipping costs to importers operating in the Port of LA, or other ports that get similar ideas, as they surely would, egged on by the unions. The Port of Oakland, for example, has said it would be very happy to implement a similar program.
  • It absolutely can open a door to all kinds of other local regulations anywhere in the name of the environment, causing the type of chaos and costs the FAAA was designed to prevent.  
  • This is the real kicker – could the movement spread even beyond the ports? 

In July of last year, The Trucker magazine wrote the following: “A source who is a former Teamster and port hauler told The Trucker that this move by ports, unions and others would not stop with banning independent haulers from the ports but also would attempt to see that unions take charge of major distribution centers.”


“It’s not just about local drayage trucks,” said the source, who wanted to remain anonymous; “this would affect every truck coming into the ports, all cross-dock operations” and ‘unionize distribution centers.’”


Ok, this is an anonymous source, perhaps with an agenda. Nevertheless, it seems credible enough, given the whole story here, that shippers and logisticians should at least sit up and pay a lot more attention to this issue than most have to date, including me.


Boyce and the ATA, among other interested groups, are fully behind clean truck programs generally. In just the past few weeks, the ports of New Your and New Jersey developed a voluntary program that will accomplish the same goals, using incentives, which the ATA said “focuses on reducing truck pollution through retirement of older diesel engines and not on unrelated and unnecessary requirements or banning owner-operator truck drivers from hauling freight at the port.”

So, it is quite a story. Had to leave much out due to space. We’ll keep you posted here. Shippers and truckers should be concerned.


Have you been following this story? Did you understand the potential ramifications? Real issues – or not to worry? Is it really about unionization and not the environment? Let us know your thoughts at the Feedback button below.

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