Consumer Federation of California

‘Instead of trying to help residents and workers, a public, government entity has outrageously teamed up with Daimler/Mercedes to hoodwink the hard-working drivers who haul cargo from our shores to America’s stores.’ ‘Rosa Rosales, president, League of United Latin American Citizens (LULAC).

It’s a situation in many ways just soaked in schadenfreude as the ‘clean truck plan’ concocted by the ports of Los Angeles and Long Beach and due to go into full effect October 1 this year get shammered by the usual suspects ‘ the American Trucking Associations (ATA) and Intermodal Motor Carriers Conference (IMCC) for starters ‘ but also by groups traditionally considered allies in environmental efforts, such as National Association for the Advancement of Colored People (NAACP) and the League of United Latin American Citizens (LULAC).

At issue are mandates by those two ports aimed at getting drayage truckers to turn in their old equipment and upgrade to vehicles powered by either 2007-model clean diesel engines or ones using liquefied natural gas (LNG). The clean truck program (CTP) ‘ given the full go-ahead by the ports this January ‘ aims to cut port-related diesel truck emissions roughly 80% by requiring licensed motor carriers that service the ports to enter into drayage concession agreements that will remove high-polluting trucks from the ports.

Under the plan, the ports granting five-year renewable concessions to carriers that comply with the CTP guidelines and pay a one-time application fee of $2,500 and fees of $100 per truck annually, the ports said.

The CTP’s requirements include committing to using 100% employee drivers by 2013; using trucks for drayage that meet EPA 2007 heavy-duty truck emission standards; ensuring drivers and trucks comply with driver training, vehicle maintenance, inspections and driver hours standards; registering drivers with the port’s drayage truck registry database and ensuring enrollment in the federal Transportation Worker Identification Credential (TWIC) program; and agreeing to affix radio-frequency identification devices (RFID) to vehicles.

It also mandates a $35 ‘clean truck fee’ per loaded 20-foot equivalent container (TEU) on any truck entering a terminal in the ports with an engine model year between 1989 and 2006 ‘ a fee collected from the Beneficial Cargo Owner (BCO) by the terminal operator. Trucks made before 1989 won’t be allowed to operate at the ports.

According to the California Air Resources Board (CARB) pollution from ports contributes to hundreds of premature deaths each year and costs the public between $100 million and $590 million each year in health impact costs.

The ports of Los Angeles and Long Beach are getting a lot of support from labor groups on this ‘ especially the International Brotherhood of Teamsters. In fact, James Hoffa, the Teamster’s general president, appeared at a rally in late July with Los Angeles Mayor Antonio Villaraiogosa, Oakland Mayor Ron Dellums, and more than 3,000 environmental, community and labor advocates to call for Oakland’s port to implement a comprehensive clean trucks program.

‘Port drivers are on the front lines of this fight for clean air and good jobs,’ said Hoffa. ‘They toil away every day earning poverty level wages and can’t earn enough to pay for the maintenance of their older trucks which are pumping out toxic pollution. This coalition of environmental, community and labor activists has come together for a common cause ‘ to curb pollution in our ports and create good-paying jobs for port drivers.’

The NAACP and LULAC, however, think the CTP is going to do the exact opposite. According to a report issued in late August entitled ‘Foreclosure on Wheels: Long Beach’s Truck Program Puts Drivers at High Risk for Default,’ both groups claim a financing plan offered by Daimler/Mercedes Benz and the port of Long Beach to acquire cleaner equipment is a ‘scheme that may have wide-reaching effects in communities of color that are already struggling economically.’

‘The current sub-prime mortgage debacle illustrates how many institutions profit by enticing minority and low-income borrowers with schemes using too-easy credit to finance purchases with loans they are unable to repay,’ said NAACP Chairman Julian Bond in a written statement. ‘We ask Daimler’s corporate officials to show their commitment to socially responsible business practices by abandoning this risky, dangerous venture ‘ if not for the sake of Daimler shareholders and their company’s image, then for the sake of the truck drivers and their communities.’

At issue, the groups say, are loan programs designed to help individual drivers replace the fleet of some 16,800 older diesel trucks that serve as drayage equipment. Under the terms of the lease-to-own scheme, Daimler will financially back low-emissions trucks ‘ costing anywhere from $100,000 for a cleaner diesel model to $200,000 for ones powered by liquefied natural gas (LNG) after volume discounts ‘ to any driver whose dirty diesel rig was recently banned by the port, regardless of his/her credit worthiness and ability to pay.

Port drivers, before the cost of fuel skyrocketed, net out an average of $11 an hour, the NAACP and LULAC said. But the monthly payment for these new trucks could total $500 to $1,000 for seven years, with a balloon payment of $7,000-$15,000 at the end of the lease term.

‘These kinds of discriminatory loans won’t just affect the thousands of California’s port drivers as individual borrowers, but entire families and their futures as well,’ added Richard Holober, executive director of the Consumer Federation of California. ‘The companies that profit from global trade are in a financially more stable position to invest in the new clean technology we need to keep our communities healthy ‘ low-wage workers aren’t.’

The ATA backs this view up in a legal brief it filed with the U.S. District Court in California seeking an injunction against the Oct. 1 activation of the plan ‘ claiming that the ports are reshaping the port drayage market via the CTP and undercutting the ability of smaller motor carriers to compete in the market.

The ATA also said this plan structures the market by state regulation rather than competition, driving up cargo costs that quickly will translate to higher prices for consumers ‘ and furthermore there may be less money for truck retirement subsidy programs designed to meet port environmental goals.

‘The ports ‘ further intrusion into the competitive structure of the drayage market makes our lawsuit even more important and illustrates precisely the type of disruption of trucking services in the economy that Congress found so inefficient and disruptive,’ said Bill Graves, ATA’s president and CEO back in August. ‘Creating an artificial, non-competitive market with highly inflated costs and prices hinders our national competitive ability and sets a dangerous precedent.’

The federal courts, however, didn’t see it that way. On Monday, after a 40-minute hearing, U.S. District Judge Christina Snyder said she would probably allow the program to move forward, despite objections from truckers. ‘The balance of hardships and the public interest tip decidedly in favor of denying the injunction,’ she said, according to the Los Angeles Times.

All I can say is, it’s going to be an interesting three weeks ‘ for that’s all the time port truckers get to decide whether to stay in or get out of their chosen line of work.