Long Beach council to revisit SoCal truck plan

The Long Beach City Council voted Tuesday to re-examine the financing model for a $2.4 billion truck re-regulation plan approved earlier this year by the city's port officials.

The 6-0 vote, which sets the stage for a re-examination by the end of summer, could lead to a council decision that certain aspects of the truck plan financing should be altered — including a provision that protects the independent owner-operator status among the more than 14,700 drivers in the port drayage fleet.

While the Port of Long Beach is managed and operated by the city's Harbor Department and the port governing board is subordinate to the City Council, the council members do not have authority under the city charter to rule directly on the truck plan. The truck plan, which calls for the replacement or retrofitting of nearly 17,000 trucks servicing the Long Beach and adjacent Los Angeles port by 2012, is being enacted through the ports tariffs — the locally determined and codified rules on the operation of the ports — and not city law.

Under the Long Beach City Charter, power to change the port tariff falls solely to the five-member port commission.

However, the council and Mayor Bob Foster have in the past brought tremendous pressure to bear on commissioners regarding issues such as the truck plan, and due to voter-approved changes to the City Charter last year, Foster now wields the authority — with City Council approval — to fire a sitting port commissioner.

During the approval of the truck plan, jointly developed by the two adjacent ports, Long Beach port commissioners split with their counterparts at the Port of Los Angeles on certain financing and labor aspects of the collective plan. Instead, Long Beach commissioners sided with Foster抯 publicly stated views on the plan.

The truck plan financing to be re-examined by the City Council concerns the way the ports will subsidize the purchase of new trucks by drivers in the local drayage fleet. Long Beach port commissioners approved a ease-to-own plan that would see the port arrange for drivers to receive loans to cover the purchase of new trucks. The commission recently named Daimler Financial Services as the provider for up to $2 billion worth of loans under the truck plan.

Under the Long Beach plan, drivers would receive the loans from DFS and the port would provide up to $1,000 a month toward the loan payment. To raise the money needed to pay for the replacements or retrofits of the privately owned vehicles, the ports have imposed a $35-per-TEU tax on all loaded containers drayed from port facilities.

However, with new trucks costing upward of $120,000 depending on the options included, a typical driver may still be liable for up to $1,500 a month, even after the port payment. This may be a difficult situation for drivers that on average have a gross monthly salary of just under $6,500, but must pay nearly $4,200 a month in taxes, fuel, insurance, upkeep and repairs.

The main concern of Long Beach City Council members voting to approve the re-examination of the financing model is that under the ease-to-own plan drivers may not cover the non-port subsidized portion of the loans and default on the loan.

If the council decides against the current financing model of the truck plan, it could also affect a labor aspect of the joint truck plan that is unique to Long Beach.

The plan requires licensed motor carriers wanting to service the ports to obtain an access license from the ports. To obtain an access license, motor carriers must agree to ports-defined criteria ranging from guaranteeing that their fleets meet set emissions standards to meeting stipulations regarding the employee status of any drivers hired.

Access licenses for facilities at the Port of Long Beach will be available to trucking firms whether they employ independent-owner operators, per-hour employees, or any combination of the two.

However, Los Angeles port officials, under pressure from the International Brotherhood of Teamsters and Los Angeles Mayor Antonio Villaraigosa, adopted licensing criteria mandating that trucking firms only employ per-hour employees. Los Angeles port officials later modified the criteria to provide trucking firms a phased five-year period to transition to 100 percent hourly employees.

Studies have shown that nearly 90 percent of the current drivers servicing the two ports are independent owner-operators.

The ports truck plan, long opposed by the American Trucking Association and other industry groups, is likely to end up in court by the end of this month. The ATA, representing about 37,000 trucking firms nationwide, is in the final stages of preparing its suit which will focus on, among other points, the truck plan抯 alleged violation of the Commerce Clause of the U.S. Constitution and the Shipping Act of 1984.

Source: American Shipper