Transportation Management Focus: You Move It, We Write About It  

- Sept. 8 , 2010 -

Logistics News: Federal Judge Rules for Port of LA in Drayage Truck Emissions Case, Perhaps Ushering in Era of More Local Control over Trucking

American Trucking Association Promises Appeal; Is the Issue the Environment - or Unionization?


SCDigest Editorial Staff

SCDigest Says:
"It'll be much easier for the Teamsters to organize these drivers," Paul Bingham, economics practice leader at Wilbur Smith Associates, said last week of the ruling.

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In a high stakes legal battle, the US District Court for the Central District of California reversed its prior legal ruling and decided that the Port of Los Angeles has the right to impose a series of restrictions and requirements on drayage drivers serving the port, new rules nominally meant to reduce pollution. The American Trucking Association (ATA) opposed the regulations and led the legal efforts to have those regulations barred by the courts, and says it plans to appeal the ruling by Judge Christina Snyder.

On the surface, the issue may appear a narrow controversy over the specifics of what kind of vehicles can serve the Port of LA  and other elements of local environmental policy. For example, the Port of LA, and initially the Port of Long Beach as well, issued rules two years ago forcing drayage operators to purchase an expensive  “concession,” and comply with tough reporting requirements and other burdens, including replacing existing trucks if built before 2007. The Port of LA's rules would have effectively barred independent owner-operators from serving the port within 5 years by requiring all drivers to be employees of companies that have purchased the concessions.

"This victory bolsters the standing of burgeoning clean port programs across the nation," said Melissa Lin Perrella, an attorney with the Natural Resources and Defense Council. "This decision allows the Port of Los Angeles to continue introducing cleaner trucks while getting dirty ones off the road and sets the stage for healthier communities nationwide."

But as SCDigest had reported earlier this year and Perrella's statement implies, the case could set a legal precedent that overturns the long legal environment of federal not local regulation of the trucking industry. The ability of local jurisdictions to set trucking rules is now largely limited by Federal Aviation Administration Authorization Act (FAAAA), which quite was created to avoid the chaos and costs that would result from different rules in hundreds of jurisdictions across the US.

The Port of Los Angeles had been fighting to change that status quo,  nominally on environmental grounds. Others, including labor lobbyists (see below), are pushing to amend the FAAAA itself, also for what are said to be environmental aims.

For example, Rep. Jerrold Nadler of New York introduced a bill just last month seeking to change the federal law and give local ports the ability to set more of their own rules, saying his proposed Clean Ports Act will "ensure that future legal challenges do not impede environmental progress."


In the event of either a victory in the courts or changes in federal law, it could open the door to dozens or hundreds of local regulations on trucking, and potentially increase the level of unionization in the logistics industry, all of which will add logistics costs to shippers. By outright banning owner-operators or effectively forcing them out of port service through expensive or burdensome regulations, the alternative would be larger - and generally unionized - trucking firms, which many see being at least as big a factor in the port's new rules as environmental concerns. (See Port of LA, Clean Trucks, Owner-Operators, and You.)

“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 action began back in 2008.



(Transportation Management Article - Continued Below)





The Port of Long Beach had initially enacted similar regulations, but later backed off the most onerous ones. It is not clear if this new ruling will lead the port, and several others in the US which are said to be looking at similar rules, to re-institute those earlier requirements.

The ATA said in a web statement last week that it believes Snyder's findings are "erroneous as a matter of law." It plans to ask the courts to maintain a preliminary injunction barring enforcement of the ban on independent trucks and other provisions while it appeals the decision.

Judge Snyder ruled that that a "market participant exception" to the law applied to the program and which thus supersedes the FAAA act, and that the new requirements were a “business necessity” to protect the government’s financial interests. Reducing the levels of pollution are key to the port's existing viability, Snyder ruled. (You can read the court's decision here: US District Decision in Port of LA versus the ATA.)

"It'll be much easier for the Teamsters to organize these drivers," Paul Bingham, economics practice leader at Wilbur Smith Associates, said last week of the ruling. "Unionization will lead to increased transportation cost to shippers and ultimately consumers."

Some have suggested that giving such power to local districts could lead not only to new requirements and increased unionization at US ports for drayage drivers, but in many other areas of logistics as well.

In July of last year, The Trucker magazine wrote that: “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.”


What's your reaction to the new ruling on the Port of LA's drayage truck regulations? No big deal, or potential catalyst for lots of local regulation on trucking and increase logistics costs? Let us know your thoughts at the Feedback button below.


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