Just months before it is set to begin, the $2.2 billion truck replacement program at the Port of Los Angeles has received support from several quarters, including the Federal Maritime Commission and congressional leaders.

The signs come as the Los Angeles City Council last week approved the port's version of the clean air plan.

Los Angeles and Long Beach port officials have toiled for more than a year on the program, which aims to slash diesel truck emissions by 80 percent through the replacement of more than 16,000 local short-haul rigs with cleaner-burning models.

The two ports had said they would adopt identical plans, but they parted ways over a controversial provision that would end independent driver contracting and require motor carriers to hire employee drivers to operate company trucks.

Motor carriers fear the requirement will open the door for unions to organize drivers, who earn little pay. Long Beach rejected the requirement, in part over fears of lawsuits by the trucking industry. However, Los Angeles adopted it, saying the provision would ensure the long-term success of the program.

The FMC gave its approval to both plans June 13 despite their differences though the commission retains the right to reconsider its decision if it believes shipping costs are rising too much.

The approval came just days after a delegation of 31 Democratic congressional leaders from California, including Reps. Jane Harman and Henry Waxman, wrote a letter in support of L.A.'s employee-based program.

"This program will produce sustainable environmental and public health improvements, enhance the efficiency and productivity of port trucking and reduce congestion," the politicians said in the letter.

The Los Angeles City Council last week gave a thumbs-up to the L.A. port version of the program. The council has authority over the Los Angeles port, but not Long Beach.

"We're very pleased that the council has shown its support of the Clean Truck Program," said Geraldine Knatz, executive director of the Port of Los Angeles, in a statement.

Curtis Whalen, an executive with the American Trucking Association, said the group plans to file a lawsuit over the employee-driver provision within the next two weeks. Los Angeles port officials have said they believe the provision would withstand a legal challenge.

Port Roundup

In other port news, leaders of the two ports, along with officials in both cities, have been busy tending to administrative matters and working to strengthen the ports' global standing.

During his trade mission to Israel, Los Angeles Mayor Antonio Villaraigosa presided over the signing of a sister port agreement between the Port of Los Angeles and the Israel Ports Development & Asset Co. Villaraigosa returned last week from a weeklong trip to the Mideastern country.

The agreement, Los Angeles' 10th such pact, encourages mutually beneficial programs, and calls for the sharing of information regarding port security, management and environmental initiatives.

Also this month, the Port of Los Angeles adopted a $1.15 billion budget for the 2008-2009 fiscal year. The budget acknowledges an anticipated decline in revenue as a result of decreased import volume linked to a slowing economy.

And the Port of Long Beach last week named Long Beach Harbor Commissioner James Hankla the next board president. Hankla, who has served on the commission since 2003, will take over for the current president, Mario Cordero, on July 1.

Talks Progress

The two sides negotiating a new labor contract for 26,000 West Coast dockworkers issued a joint statement last week highlighting progress in the talks, giving hope that they can reach an agreement before a July 1 deadline.

"In the weeks since our last update, the parties have continued to meet regularly, and have reached a tentative agreement on health care benefits," said representatives of the Pacific Maritime Association and the International Longshore and Warehouse Union. "While the pace and tone of the talks have been productive, important issues remain, with work left to be done."

The union and the shippers agreed to begin talks earlier than usual this year in the hopes of avoiding the disastrous 10-day worker lockout in 2002 that paralyzed West Coast ports and cost the nation an estimated $1 billion a day.

Logistics Leases

Maersk Distribution Services Inc., a Madison, N.J.-based subsidiary of international shipping giant Maersk Inc., renewed a pair of Los Angeles-area warehouse leases totaling nearly $20 million.

The company signed a $9.4 million, five-year lease for a Carson warehouse and a $9.6 million, five-year lease for a distribution center in City of Industry.

Staff reporter Richard Clough can be reached at rclough@labusinessjournal.com or at (323) 549-5225, ext. 251.

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