CLEAN TRUCKS IN CALIFORNIA PORTS:
MODELLING EMISSIONS POLICY
Christopher B. Clott1 and Bruce C. Hartman2
1University of St Francis, Joliet, IL USA
2American University, Washington DC USA
Background
•Containers are moved by heavy diesel trucks.
•Rigs operated by independent owner-operators, older
trucks, pay per load, low pay, low barriers to entry.
• L.A. Basin- one of most air polluted regions within USA.
• Growth of trade volume thru POLA and POLB in last two
decades increased congestion and concentrated port truck
traffic.
• Civil suits filed against Ports on behalf of nearby residents suffering
health problems.
• Federal efforts to reduce diesel truck exhaust
• have been ongoing since 1980’s.
•
State of California efforts thru CARB
•
reduce emissions beyond Federal EPA regulations.
Clean Trucks Plan
• Progressive goals
– to ban old trucks from port
– and require purchase of new trucks or refitting of trucks
– to meet 2007 emission standards.
• Concession agreement
• part of POLA plan requires truckers to use employer driver
workforce, phase out owner operators.
• Opposed by a multitude of business interests
• Violation of trucking deregulation by Congressional action
in the 1980’s and 90’s.
Port Trucking Industry
• Typical port truck driver needs subsidy to purchase
newer truck or retrofit.
• Federal law (FAAAA Act, 1986) prohibits states and
localities from imposing rules on motor carriers in
interstate commerce.
Labor Union Involvement
• POLA
argued need
for legal authority
to enact
• Independent
owner-operators
by law cannot
be
policies
to protect
their
financial interests under
organized
by labor
unions.
“market
participant”
doctrine.
• If motor carriers are required to have employee
• Ports drivers,
of Longdrivers
Beach,
Oakland,
Seattle,
Tacoma and
could
be legally
organized.
New York/New Jersey have Clean Truck Programs in
• Environmental, community and labor groups,
operation.
including Teamsters Union support POLA position.
• ATA argues Clean Truck Program primarily a Union
backed initiative to rewrite deregulation of trucking.
Lawsuit and Court Proceedings
• American Trucking Association (ATA) sued
POLA arguing that concession violated
• 2009:
ATA appealed,
won injunction
Commerce
Clause
of US Constitution.
against concession agreement.
• Sept. 2008: US District Court ruled against
• Litigation challenged trucking
ATA allowing Port to proceed with plan as
organization requirements; did not
scheduled.
challenge vehicle retirements and
• FOMC other
first opposed
and then supported
efficiencies.
Clean• Truck
Program.
Oct 2009:
Port of Long Beach agreed
with ATA, dropped concession clause.
And more Lawsuit and Court
• April 2010: ATA lawsuit argued in U.S. District Court.
Sept. 10: Upheld the POLA concession agreements.
ATA challenged decision
• Oct. 27: Preliminary injunction blocking
implementation.
At present: POLA will not appeal a
• March 2011: Court of Appeals will hear case again.
Court of Appeals ruling that struck down
• Expected to go to
the employer driver mandate in the
• on primacy of federal law in
ports clean truck program. The case
interstate commerce.
may still go to the U.S. Supreme Court.
Modeling Port Emissions Control
• Stakeholder interests conflict on pollution abatement.
• Legal challenges prevented full implementation of
some plans.
• Ports must
• maintain competitive position and service container traffic
… and
• reduce pollution by a target percentage within a particular
time frame.
• Should ports set own standards or wait for decisions
on global or federal level, negating their individual
agreements?
• Insight from a simple game
theory model of trucking process.
Decision Relations
• Port sets the goals, capital
support for improvement,
participant fees, other rules.
• Each PTO selects motor
• LMC selects OPS as employee
carriers that are small and
operators (higher wage rate) or
owner-operators (lower wage rate)
large.
• LMC’s responsible for truck • SMC selects only OO’s at lower wage,
perhaps piecework
upgrades. SMC’s might or
might not upgrade truck.
• Subsidies can induce more
cooperation to reach pollution
goals.
• Too low a subsidy may create
reluctance to upgrade.
Simple Game Model
• Interaction of MC and OO a simultaneous move strategic
game; MC chooses strategy p; OO chooses q
• Payoff for each player is income less cost:
– MC associating with OO:
flt – cD (p – q)
– OO associating with MC:
wlt – cK (q – p)
• flt, wlt are freight rate and wage/period
– lt are average TEUs/trip, trips/period
• cD , ck are cost per period to upgrade net of subsidy
•
Assume reasonable life of upgrade, e.g. 5 years, linear depreciation
• Some ports may give different subsidies to MC and OO
• Rational play and common knowledge 
Nash Equilibrium Outcome
Model Results
• Best response in upper or lower triangle.
• Nash Equilibrium strategies on diagonal
p=q.
• Pareto order smaller to larger
– Each player prefers smallest percent
strategy it can.
• Infeasible regions– cost exceeds income.
Players’ Expectations Matter
• If freight rates f or wages w
are too low relative to subsidy,
gray infeasible region creeps
close to NE line.
• Subsidies keep infeasible
regions away from NE.
• Different subsidies to OO and
MC do not affect NE; simply
change feasible regions.
• If either f or w are expected to
be volatile, player of that type
might decide that risk it drops
too low means she should not
join game.
•Relevant recently as freight rates
plummeted.
•Many truckers felt they could not
hold on if rates went lower, and chose
not to upgrade.
•Result: truck shortage in some ports.
•Volume handled with longer waits.
Summary
• Harbor Trucking - an interesting place.
• Pollution Control Policies influenced by legal,
lobby, and legislative decisions.
• Ports have limited tools.
• Mandatory percentages, subsidies must keep
enough MCs and OOs in game to meet
throughput volumes.
Final Thought
• Upgrade of trucks can be implemented by port
management when rules are conditioned by
understanding of choices made by participants
• Actions must take into account freight rate
fluctuations and wages that would cause parties
not to generate a profit.
• Risk factor means parties need expectation of
success to participate.
Questions?
THANKS!