With just a few weeks left before the ports of Los Angeles and Long Beach plan to kick off a massive truck replacement initiative, local officials have yet to sign up a single motor carrier under the controversial clean air plan.
The sluggish pace has many trucking companies openly concerned about the ports' ability to ensure a sufficient workforce when the programs begin in October. Port officials, likewise, are worried that a lawsuit this week by the American Trucking Association, a powerful industry group, in opposition to the truck programs will deter motor carriers from submitting their applications in a timely manner.
Officials have said they will not push back the approaching start date, despite growing concern that the lack of participation will lead to a shortage of drivers. The uncertainty is causing tension at the country's largest port complex.
A number of motor carriers interviewed by the Business Journal said they do not plan to submit their applications; instead, they will wait and see what happens with the lawsuit before proceeding.
"Nobody wants to be the first one to jump in the pool," said Ron Guss, president of Intermodal West Inc., a Pico Rivera-based motor carrier with about 70 trucks in its fleet. "I'm just waiting to see how this shakes out. We have a very strong feeling that the ATA has substantial grounds to block the whole program."
The ATA filed a lawsuit in Los Angeles federal court against the ports of Los Angeles and Long Beach over elements of the truck programs.
The ports have toiled for more than a year on the monumental programs, which will replace about 16,800 short-haul diesel rigs with cleaner-burning models, including those that run on alternative fuels. The $2.2 billion effort is aimed at reducing diesel truck emissions by 80 percent and helping to stem the dangerous levels of toxic emissions generated by port operations.
The trucking group, though ostensibly in favor of the clean air goals, believes the ports are in violation of federal law by requiring companies to apply for and receive a concession to continue hauling cargo in and out of the harbor. By restricting who can and cannot work, industry leaders say, the ports, in effect, are attempting to regulate an industry that was federally deregulated nearly three decades ago.
Port leaders say they are within their legal right to monitor the companies that will participate in the clean air program. Still, port leaders admit that motor carriers face a difficult choice in the next few weeks. The trucking group is seeking an injunction that would allow the companies to put off their applications, but that order may be weeks away, if it comes at all.
"I think the motor carriers certainly have a lot of things to consider," said John Holmes, director of operations for the Port of Los Angeles. "But we have clearly told them that they should go ahead with their applications."
The programs are set to begin Oct. 1, at which point all motor carriers entering the ports must be licensed concessionaires. The ports will gradually phase out older trucks, beginning by banning all pre-1989 rigs.
But the ports have said they need all concession applications by Sept. 1 because the documents will take about 30 days to process. The compressed timeline has many motor carriers nervous.
"There's a lot of confusion and we're all standing here saying, 'Do I do it or not?'" said Kevin Dukesherer, director of Progressive Transportation Services Inc., a Bell-based motor carrier running 185 trucks.
Port staff workers have personally called about 800 motor carriers to urge them to sign up, Holmes said.
"Were encouraging people to put in their applications because it's a compressed schedule," he said. "You've got to give them some time to work through the application."
Additionally, both ports have held outreach sessions to answer questions. The meetings, however, turned contentious at times as angry and confused motor carrier executives questioned whether the ports have ironed out all the details.
"The carriers were really rough and there were a lot of pissed-off people," said one trucking industry official who attended the meetings but asked not to be named. "It's chaos. It's a meltdown in the works. With all the uncertainty now with what's going on I think that most people are just going to sit on the sidelines and see what happens (before applying)."
The trucking industry has objected to the ports' requirement that companies open up their financial records for vetting. Motor carriers say they should not have to do that, and they do not want to submit their applications until they have a chance to overturn the requirement.
Companies are also upset about a union-backed provision adopted only by the Port of Los Angeles that would end the practice of independent driver contracting and force companies to hire employee operators, opening the door for worker unionization.
Additionally, several motor carriers said they were concerned about the application fees. The Port of Los Angeles is requiring a $2,500 fee, plus $100 per truck that the motor carrier runs; the Port of Long Beach is asking for $250, plus $100 per truck. But what has rankled the companies is the uncertainty over whether they will get the money back if the lawsuit proves successful.
The ports previously said the fees were nonrefundable, but as of this week, the Port of Los Angeles said it will give the money back if the program does not move forward as planned.
In the meantime, the ports are struggling to get applications and are growing increasingly nervous over the possible consequences of a driver shortfall.
"There is a concern about whether there will be enough trucks here in October," said Art Wong, a spokesman for the Port of Long Beach. "If they don't sign up very soon and get the processing going, they can't expect to be ready Oct. 1. We want as many companies signed up now so that we can tell importers and exporters that we will have an adequate pool of trucks here regardless of what happens."
The ports have remained hard-nosed about the Oct. 1 start date and have previously said they will not push it back. But Holmes indicated this week that it is a possibility.
"We have no intention of pushing the start date back but we're smart enough to have groups of people that have contingencies," he said. "We're prepared to deal with any eventuality."
Curtis Whalen, an executive with the trucking association, said he believes the ports are trying to force motor carriers' hand by giving them so little time to decide whether to apply. For that reason, the group is seeking an injunction as quickly as possible.
"I do question how short the timeframe is that the ports have left us with," he said. "There's a lot of work to be done in a very short order."
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