Executive Briefings

Can California's Independent Truckers Be Saved?

It's likely that we'll have to slog through most of the summer before we get a decision from the U.S. Court of Appeals for the 9th Circuit as to whether ports can dictate to truckers how they do their jobs. But there's a sense in the air that this could be one of those rare instances where sanity prevails.

Oral arguments were heard on June 10. Curtis Whalen, executive director of the American Trucking Association's Intermodal Conference, is hoping for an opinion by summer's end, although the case is almost certain to be appealed to the U.S. Supreme Court regardless of how the 9th Circuit rules.

What's it all about? Simply put, the Port of Los Angeles, as part of its Clean Truck Program, wants to ban independent owner-operators from carrying containers to and from its docks. Only those individuals who are employed by a company that is authorized to serve the port would be allowed to participate. If you're an owner-operator who wants a piece of that drayage business, then you'll have to dump your own truck and get ready to punch a clock.

The port's rationale in propagating the rule centers on questions of safety and security, neither of which has any relevance to the issue at hand. Launched in October 2008, the Clean Truck Program has been going along just fine without the employer mandate, which remains under injunction pending the 9th Circuit ruling. By 2012, all drayage trucks operating on port property will have to meet the 2007 emissions standards of the U.S. Environmental Protection Agency, but operators are ahead of schedule. In its first year, the program reduced truck emissions by some 70 percent. The figure is expected to climb to 80 percent by the time the ban is fully in effect. As of late last year, more than 90 percent of gate moves at port terminals were being made by EPA-compliant trucks, according to port executive director Geraldine Knatz.

The real reason for the concession clause is political pressure from the International Brotherhood of Teamsters, which is prevented by law from organizing independent truckers. At a time when labor unions are under fire across the nation, the Teamsters see an opportunity to bolster their ranks. The union has powerful friends at all levels of government, which explains why this terrible idea has gotten so far.

The Federal Aviation Administration Authorization Act of 1994, known as F4A, prohibits local authorities such as ports from enacting rules that interfere with interstate commerce. It's a sensible measure; who wants to encounter a completely different set of regulations for trade at each U.S. gateway port? But that restriction hasn't stopped the Port of Los Angeles from trying. It argues that the Clean Truck Program should be granted an exemption from F4A out of safety concerns.

In addition, the port claims the status of "market participant," which would allow it to supersede the strictures of federal law. Just a moment's thought is enough to knock down that conceit. Like most major West Coast ports, Los Angeles acts solely as a landlord for ocean carriers, terminal operators and intermodal yards. It doesn't contract directly for services, and has no history of dealing with port trucking.

"We say they're rent collectors," says Whalen. So much for "market participant." Adds Joel Anderson, president and chief executive officer of the International Warehouse Logistics Association: "They're dead wrong on the facts, and dead wrong on the law."

And so we wait. In the meantime, the Teamsters and their allies are moving forward on additional fronts. In New York, Rep. Jerrold Nadler (D-NY) has reintroduced H.R. 572, the Clean Ports Act of 2011. It would allow state and local governments to bypass federal restrictions on regulating motor carrier pricing, routes and service. The bill, says Whalen, "would end federal preemption as we know it today." Notably, the Port Authority of New York and New Jersey has so far declined to make its own run at owner-operators. Its environmental program for trucking includes no concession plan or employee mandate, says Whalen.

Back in California, State Assembly Speaker John A. Perez has introduced A.B. 950, a bill to ban truck owner-operators from hauling shipments into and out of all ports in California. Never mind that most drayage activity around the state's major ports is currently handled by these self-employed individuals. Perez and his supporters want to terminate their right to exist.

There's plenty of opposition to the measure. The ATA, which is leading the fight against the concession program at the Port of Los Angeles, has also lined up against the Perez bill. Other opponents include IWLA, the California Trucking Association and Nasstrac.

"It's a pure political play - nothing else," says Anderson. He argues that A.B. 950 would disrupt free trade throughout California, cripple economic growth and force warehouses and other logistics providers to relocate to other states. On top of that, it would hinder the ability of West Coast ports to compete with facilities on the East and Gulf coasts, especially in light of the coming Panama Canal expansion.

Fortunately, the forces of opposition have been strong enough to convince Speaker Perez to place A.B. 950 into a two-year legislative cycle. "He had some good informative meetings with our side," says Whalen. "He realized that what might look straightforward is not quite what he thought he was getting into, when you start looking at the facts." Critics have pointed out that it would be a waste of time for Perez to move forward while the Port of Los Angeles case is still being litigated in the courts. They're hoping, of course, that a favorable decision will put a stop to the measure before it gets too far in the legislative process.

Perez has the power to put A.B. 950 back into active consideration at any time, so opponents are staying on the alert. "Never discount what the Speaker can and can't do," says Whalen.

Still, support for this wrongheaded campaign to destroy independent trucking might have peaked. "I'm sure that the Teamsters have a model plan that they're going to be shopping in many areas," Whalen says. Yet he sees "no momentum whatsoever" for the union's efforts. He's confident that the upcoming 9th Circuit decision will favor the status quo. "People realize that they can move forward positively [with environment programs], as Long Beach and Los Angeles have done, without redefining port truck drivers," he says.

So says the voice of reason. Let's hope the courts hear it.

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It's likely that we'll have to slog through most of the summer before we get a decision from the U.S. Court of Appeals for the 9th Circuit as to whether ports can dictate to truckers how they do their jobs. But there's a sense in the air that this could be one of those rare instances where sanity prevails.

Oral arguments were heard on June 10. Curtis Whalen, executive director of the American Trucking Association's Intermodal Conference, is hoping for an opinion by summer's end, although the case is almost certain to be appealed to the U.S. Supreme Court regardless of how the 9th Circuit rules.

What's it all about? Simply put, the Port of Los Angeles, as part of its Clean Truck Program, wants to ban independent owner-operators from carrying containers to and from its docks. Only those individuals who are employed by a company that is authorized to serve the port would be allowed to participate. If you're an owner-operator who wants a piece of that drayage business, then you'll have to dump your own truck and get ready to punch a clock.

The port's rationale in propagating the rule centers on questions of safety and security, neither of which has any relevance to the issue at hand. Launched in October 2008, the Clean Truck Program has been going along just fine without the employer mandate, which remains under injunction pending the 9th Circuit ruling. By 2012, all drayage trucks operating on port property will have to meet the 2007 emissions standards of the U.S. Environmental Protection Agency, but operators are ahead of schedule. In its first year, the program reduced truck emissions by some 70 percent. The figure is expected to climb to 80 percent by the time the ban is fully in effect. As of late last year, more than 90 percent of gate moves at port terminals were being made by EPA-compliant trucks, according to port executive director Geraldine Knatz.

The real reason for the concession clause is political pressure from the International Brotherhood of Teamsters, which is prevented by law from organizing independent truckers. At a time when labor unions are under fire across the nation, the Teamsters see an opportunity to bolster their ranks. The union has powerful friends at all levels of government, which explains why this terrible idea has gotten so far.

The Federal Aviation Administration Authorization Act of 1994, known as F4A, prohibits local authorities such as ports from enacting rules that interfere with interstate commerce. It's a sensible measure; who wants to encounter a completely different set of regulations for trade at each U.S. gateway port? But that restriction hasn't stopped the Port of Los Angeles from trying. It argues that the Clean Truck Program should be granted an exemption from F4A out of safety concerns.

In addition, the port claims the status of "market participant," which would allow it to supersede the strictures of federal law. Just a moment's thought is enough to knock down that conceit. Like most major West Coast ports, Los Angeles acts solely as a landlord for ocean carriers, terminal operators and intermodal yards. It doesn't contract directly for services, and has no history of dealing with port trucking.

"We say they're rent collectors," says Whalen. So much for "market participant." Adds Joel Anderson, president and chief executive officer of the International Warehouse Logistics Association: "They're dead wrong on the facts, and dead wrong on the law."

And so we wait. In the meantime, the Teamsters and their allies are moving forward on additional fronts. In New York, Rep. Jerrold Nadler (D-NY) has reintroduced H.R. 572, the Clean Ports Act of 2011. It would allow state and local governments to bypass federal restrictions on regulating motor carrier pricing, routes and service. The bill, says Whalen, "would end federal preemption as we know it today." Notably, the Port Authority of New York and New Jersey has so far declined to make its own run at owner-operators. Its environmental program for trucking includes no concession plan or employee mandate, says Whalen.

Back in California, State Assembly Speaker John A. Perez has introduced A.B. 950, a bill to ban truck owner-operators from hauling shipments into and out of all ports in California. Never mind that most drayage activity around the state's major ports is currently handled by these self-employed individuals. Perez and his supporters want to terminate their right to exist.

There's plenty of opposition to the measure. The ATA, which is leading the fight against the concession program at the Port of Los Angeles, has also lined up against the Perez bill. Other opponents include IWLA, the California Trucking Association and Nasstrac.

"It's a pure political play - nothing else," says Anderson. He argues that A.B. 950 would disrupt free trade throughout California, cripple economic growth and force warehouses and other logistics providers to relocate to other states. On top of that, it would hinder the ability of West Coast ports to compete with facilities on the East and Gulf coasts, especially in light of the coming Panama Canal expansion.

Fortunately, the forces of opposition have been strong enough to convince Speaker Perez to place A.B. 950 into a two-year legislative cycle. "He had some good informative meetings with our side," says Whalen. "He realized that what might look straightforward is not quite what he thought he was getting into, when you start looking at the facts." Critics have pointed out that it would be a waste of time for Perez to move forward while the Port of Los Angeles case is still being litigated in the courts. They're hoping, of course, that a favorable decision will put a stop to the measure before it gets too far in the legislative process.

Perez has the power to put A.B. 950 back into active consideration at any time, so opponents are staying on the alert. "Never discount what the Speaker can and can't do," says Whalen.

Still, support for this wrongheaded campaign to destroy independent trucking might have peaked. "I'm sure that the Teamsters have a model plan that they're going to be shopping in many areas," Whalen says. Yet he sees "no momentum whatsoever" for the union's efforts. He's confident that the upcoming 9th Circuit decision will favor the status quo. "People realize that they can move forward positively [with environment programs], as Long Beach and Los Angeles have done, without redefining port truck drivers," he says.

So says the voice of reason. Let's hope the courts hear it.

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