Randy Thomas has spent the last four decades proudly running his South Los Angeles trucking firm, which services the ports of Los Angeles and Long Beach.

As the ports ballooned to become the largest trade complex in the country, Thomas’ business grew from one truck he drove to a thriving little firm with 15 drivers. He put his three children through college – the first generation in his family to go. He was starting to look forward to retiring. He planned to leave his business to his family.

Instead, the 60-year-old owner of Randy Thomas Trucking is preparing to close his business about Christmas. The reason: He’s unable to purchase new trucks to comply with port regulations taking effect in January.

“This is not how I envisioned ever going into retirement,” said Thomas, a burly 6-foot-4-inch man who was moved to tears when he talked about how he now can’t leave much for his family. “I feel like I’m seeing the death of the American dream; my American dream.”

In all, about 900 trucking companies shuttle cargo containers in and out of the two ports. Hundreds of them, like Thomas’ company, are in danger of slipping out of existence in the next few months. Following them are thousands of truckers who own their own rigs and contract with small companies like Thomas’.

The recession-driven downturn in trade has pushed them to the precipice, but many believe what’s shoving them over the edge is the Clean Trucks Program, which falls hardest on small operators.

The program seeks to eliminate old polluting trucks from the ports. The program in October 2008 banned trucks made before 1989. But on Jan. 1, a more stringent ban extends to all trucks made before 1994 and those that have an engine made before 2004.

It’s unclear how many trucks will be sidelined as a result, but the number is a big one. The ports earlier estimated that as many as 12,000 trucks would fall into that criteria, but last week the L.A. port estimated 4,000 to 6,000 trucks would be banned Jan. 1.

A new diesel truck costs about $100,000, while retrofitting a truck with a new engine costs about $10,000 to $15,000. Many small trucking firms, already scraping by on low margins, paying off existing trucks and whacked by the downturn in business at the ports, say it’s not worth it to load up on debt to stay in the industry.

“We’ve been able to make it through a few recessions and we know how to adjust as we’ve been doing this for 39 years,” Thomas said. “But if I don’t buy the trucks, I can’t work. So I’m having to close down Jan. 1.”

The ports defend their commitment to the guidelines of the Clean Trucks Program, a joint effort by the ports to cut truck emissions by 80 percent by 2012. They point out that they have offered almost $85 million in incentives and subsidies to help trucking companies buy new trucks.

“We knew inevitably there were going to be casualties as we move along toward meeting those clean air goals,” said Robert G. Kanter, managing director of environmental affairs and planning for the Port of Long Beach. “Frankly, some of them had junk trucks that shouldn’t have been on the road, so we have to stand our ground on that. But it’s painful to hear anyone lose their business.”

Pointing fingers

To be sure, several issues besides the Clean Truck Program are hurting small trucking firms. Trade is down at the ports as much as 35 percent and trucking firms, like all other businesses, close because of poor decisions on their part, said Paul Bingham, an economist with IHS Global Insight who studies the ports.

“It’s an intertwined web of complicated issues that you can’t easily pinpoint the blame on one party,” said Bingham. “In addition to the recession and guidelines in the Clean Truck Program, security regulations implemented in April under the Transportation Worker Identification Credential program prevented truck drivers without citizenship or with criminal records from working at the port.”

What’s more, the small trucking firms are struggling to finance new trucks amid the credit crisis and tightened lending generally.

To help, the L.A. port has spent $44 million in incentives that helped put 2,220 new trucks on the road. Meanwhile, the Long Beach port has spent $41 million in subsidies that put 250 new trucks and 50 retrofitted older trucks on the road. More incentive programs are in the works.

“We have offered subsidies of up to 80 percent of the cost of the truck, which is pretty darn good,” Kanter said. “It’s difficult to support everybody in the way they would like to be.”

However, the Port of Los Angeles especially has long made it clear that it wants the subsidized trucks to go to trucking companies that are able financially and organizationally to keep up with maintenance of the trucks it has subsidized.

Significantly, the Port of Los Angeles but not the Port of Long Beach is pushing to make all trucking firms that work at the port hire truckers as employees.

That means the smaller firms like Thomas’, which have long contracted with independent truckers who own and operate their own rigs, would be cut out – overturning the longstanding system that relied on small trucking firms. Theoretically, the small trucking companies could continue working at the Long Beach port, but that may not provide enough work for all to survive.

The L.A. port has been so insistent about the employee mandate that it has appealed legal rulings against it and has hired former Congressman Dick Gephardt’s lobbying firm to try to change federal law to allow it.

Critics have said that the employee mandate paves the way for more easily unionizing truckers. Teamsters have been supporters of L.A.’s plan, and the head of the Teamsters reportedly consulted with Mayor Antonio Villaraigosa, a former union organizer, as he was crafting the plan.

At least at the L.A. port, the Clean Truck Program “is not about the environment, it’s about politics and the mayor being pressured by his union supporters to pressure the port of L.A. to implement this plan,” Thomas said. “They are trying to squeeze us little guys out.”

As for the subsidies, Thomas said he applied for seven grants but he only qualified for one truck. That’s not enough to stay in business.

Arley Baker, a Port of Los Angeles spokesman, said the size of the trucking company does not matter to get an incentive.

Nonetheless, the provisions work against the small trucking companies. That’s because to get an incentive from the port, the company must prove its financial stability.

“Our experience in this last year is that there is no particular benefit to having a large drayage company work with us versus a small drayage company,” he said, noting that nearly 50 percent of the trucking firms servicing the port have less than 20 trucks.

“What is important to us is that any company that provides drayage services is financially stable, and complies with our concession agreement. So far, both the large and small companies have done this.”

End of the road

Indeed, some small trucking firms are managing to get by.

Atlas Marine in Long Beach has 12 employee drivers and it got subsidies for 10 new liquefied natural gas trucks from the Long Beach port. That has kept it in business. In addition to taking on $3,000 in monthly payments for the trucks, Atlas is cutting corners to see if it can retrofit its five remaining older diesel trucks by the January deadline.

“Times are still tough and will be for a few more years and we’re not out of the woods. No smaller firm is,” said Atlas Marine owner Kathleen Dodd, who reluctantly stopped offering health care to her longtime employee drivers to avoid layoffs.

But the road to closure is already paved for some small trucking firms.

Compton’s Sexton & Sons Trucking has worked in the harbor since 1963, and its 71-year-old founder, Plaze Sexton, said he can’t afford to buy new trucks or engines as he is still paying off two trucks he bought that were made in 2003, ironically just at the tail end of what’ll be banned in January.

“The last two years have been rough and are so different from the previous great 44 years we’ve been working here,” Sexton said. “We have no profit, are using up our savings to stay alive, and everything is just going to hell so fast.”

Sexton’s company has five drivers and owns nine trucks, four of which are too old already and the remaining five will be banned in January.

“It was a good run, but there’s nothing I can do,” Sexton said. “That’s the hardest part. We’ll keep working till the port tells us no more.”

Thomas’ story is somewhat similar.

He entered the trucking industry in his late teens, driving for Cal Cartage in the late 1960s. When he noticed that truckers, mainly white, did not feel comfortable delivering to South Los Angeles, Thomas decided to buy a 1967 Ford big rig for $8,000, and he started his own business at age 21.

He and a few other friends in his South L.A. neighborhood had sprung up in the early 1970s to start a cluster of black trucking firms that hired local young men who were just starting to face pressure to join gangs.

“We were just some young black kids trying to do something with our lives,” Thomas said. “We were hauling before containers started and when there were just three terminals at the ports. It has been amazing to see this whole area and the ports grow as we grew up.”

Thomas soon expanded from a one-man show to a trucking firm. As trade boomed at the ports, peaking in 2006, Thomas’ firm grew to where he contracted with 15 drivers and he owned four trucks.

But then the cargo downturn hit. Instead of making $145,000 a month in revenue from hauling as he did in March 2006, Thomas’ firm only brought in about $34,000 in August. To stay afloat, he’s had to sell off all but one truck and move his headquarters into his house. He now only contracts with five owner-operators.

Now, with the Clean Trucks Program’s Jan. 1 deadline looming, he will no longer be able to drive his one truck into the port complex.

“This program couldn’t have come at a worse time,” Thomas said.