June 2008
Authors:
John L. Longstreth
+1.202.661.6271
john.longstreth@klgates.com
Yvette T. Wissmann
+1.202.661.3829
yvette.wissmann@klgates.com
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On June 2, 2008 and June 6, 2008, respectively, the Ports of Long Beach and Los Angeles voted to approve the terms for truckers to join their unprecedented Clean Truck Programs, designed to reduce trucking emissions at each port by 80% by 2012. The measures are part of the San Pedro Bay Ports Clean Air Action Plan (CAAP), which was approved by the Ports of Los Angeles and Long Beach in 2006 as a comprehensive strategy to cut port air pollution and reduce health risks.
The ports have chosen to focus on truck emissions first, and have agreed under a 2006 agreement approved by the Federal Maritime Commission (FMC) to provisions that would phase out so-called “dirty” diesel trucks from San Pedro Bay cargo terminals within five years. Pre-1988 trucks would be phased out beginning October 1, 2008 and all pre-2006 trucks by January 1, 2013. The ports have also agreed on an infrastructure fee of $15 per container, and a clean truck fee of $35 per container, payable by the beneficial owners of the cargo, to finance clean or retrofitted vehicles. Other ports concerned with vehicle and vessel emissions are considering measures as well.
The truck plans have been among the more controversial aspects of the CAAP, particularly as to whether trucking companies are required to use employees or permitted to contract with independent owner-operators. On this issue, the Ports of Los Angeles and Long Beach have taken different approaches. Long Beach will allow independent owner-operators, while Los Angeles will require that they be phased out so that at least 20% of trucks draying at the port are employee operated by the end of 2009, 66% by the end of 2010, and 100% by the end of 2013. Both ports plan to implement their programs beginning in July.
On June 13, 2008, the FMC announced that it was clearing an agreement that would allow a number of marine terminal operators to assist the ports in implementing the truck plans, including collection of the clean truck fee and assistance in verifying that drivers have proper federal Transportation Worker Identification Credentials (TWIC). However, the
FMC expressly noted that no specific implementation plans had been agreed to yet, so blocking any such agreements would be premature.
Further, the FMC expressly noted its authority to review all agreements, including any agreement entered into under authority of the 2006 Agreement, and “ emphasized to the
Parties the need to immediately file with the Commission all substantive aspects of the
Clean Truck Programs.”
The standard the FMC will use in reviewing the truck plans is whether the agreement will result in anti-competitive conduct such as an increase in transportation costs or a reduction in service. The FMC also has a responsibility to review the plans to ensure that common carriers, intermediaries, and marine terminal operators, including public ports, establish reasonable regulations and practices and comply with other requirements under Section 10 of the Shipping Act. In a recent speech, FMC Commissioner Harold

J. Creel, Jr. gave some hint of his thinking on this issue when he noted that “some of the Harbor Board commissioners at the Port of Long Beach publicly commented that no one had connected the issue of who drives the truck – the proposed employee mandate
– with reducing pollution.” This indicates the FMC will take a hard look at the competitive effects of the employee mandate proposed by Los Angeles.
Another difference in the two truck plans is the concession fees. The Port of Long Beach has established an initial application fee of $250 per licensed motor carrier. This fee, according to port staff, is designed to cover the basic administrative costs of the concession program, but will not create any type of barrier to entry. The Port of Los Angeles has adopted a $2,500 initial application fee. In light of Long Beach’s action, the FMC may question the much larger $2,500 fee as well.
The CAAP and the 2006 Agreement allow the ports to discuss truck, rail and vessel issues. The CAAP addresses vessel emissions, for example, by calling for all major container cargo and cruise ship terminals at the ports to use low-sulfur fuels and to be equipped with shorepower connections within five to ten years so that vessels in berth can shut down their dieselpowered auxiliary engines and plug into “cleaner” electricity. An effort by the California Air Resources
Board to establish specific vessel emissions limitations for vessels not using low sulfur fuels was held impermissible by a federal appeals court in February, however, on the basis that EPA approval was required for the state to act. See Pacific Merchant Shipping
Ass’n v. Goldstene
2008).
, No. 07-16695 (9 th Cir. Feb. 27,
There has been considerable debate about the Clean
Truck Programs. The International Brotherhood of
Teamsters and the Natural Resources Defense Council, along with other environmental and labor organizations, have encouraged politicians, port officials and shipping companies to support the labor component of the truck plans. Meanwhile, the American Trucking Association has asked the FMC to block the licensing portion of the agreement and has said it will file suit against Long
Beach and Los Angeles if the proposals move forward.
The Pacific Merchant Shipping Association and the
National Industrial Transportation League have asked the FMC to use its regulatory authority to prevent a breakdown of transportation in the San Pedro ports.
They have also said that the truck plans discriminate against the independent contractor drivers that provide a large portion of harbor trucking.
A copy of the FMC’s press release can be found at http://www.fmc.gov/speeches/newsrelease.
asp?SPEECH_ID=24 7
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