Austin Beutner has a heckuva task ahead. As the first deputy mayor and chief executive for economic and business policy, he is charged with transforming Los Angeles into the most business-friendly city in America. Hopefully, he will soon create an environment in which private-sector employers are no longer viewed as the enemy within the city bureaucracy. With unemployment in Los Angeles at more than 13 percent, time is of the essence.
The new jobs czar, as he is known, should start with the Port of Los Angeles, where inefficient terminal operations, indifferent longshoremen and harmful public policies advocated by city leaders are alienating the shipping community. Regrettably, cargo owners, shipping lines and others in the goods movement industry no longer see Los Angeles as a desirable destination. For now, it is merely a necessary one, but more appealing options may become available.
Ports in Canada, Mexico and more business-friendly U.S. cities see L.A.’s self-inflicted wounds as an opportunity to boost their economies. Canada, for example, is making a strong push to attract Asian imports that have historically moved through California ports, particularly Los Angeles. Upstart ports with new and expanded facilities promise easy access to their docks, close proximity to rail lines, quick turnaround times for cargo trucks and fewer bureaucratic hassles – an attractive combination to say the least.
Instead of taking a hard look in the mirror, the port responded to Canada’s $7 million marketing campaign – that’s right, $7 million – by charging to Washington in search of government protection. Suddenly, Los Angeles, along with other West Coast ports, needed a national freight movement policy and an infusion of taxpayer money to hold off the feisty Canadians.
One of those competitors, a small port in British Columbia, handles 500,000 cargo containers a year at full capacity. Los Angeles, our largest seaport, processes more than a half-million in a single month.
At the same time that L.A. officials were twisting arms on Capitol Hill, ostensibly to increase the port’s competitiveness, they were launching a separate lobbying campaign to allow local governments to re-regulate their harbor trucking industries, a change that will put the L.A. port at an even greater competitive disadvantage.
Supporters say the change is needed for ports to achieve clean air goals. However, Los Angeles boasts that its precedent-setting clean truck program has been so successful that the five-year goal of cutting diesel emissions by 80 percent will be reached two years ahead of schedule.
Don’t be fooled. The city’s goal in imposing new rules on harbor trucking companies is to ban self-employed drivers from the port, an obvious bone to organized labor.
Union drive
Los Angeles plans to dislocate some 8,000 independent drivers, all of whom are small business owners, force them to become employees of a few large motor carriers and, ultimately, subject them to organization by the Teamsters union. The port assumes, of course, that the carriers will simply absorb them, along with added costs of 50 percent or more.
A 2007 study commissioned by the port shows that a move to the employee-driver model will lead to a 22 percent drop in driver productivity simply because employees work fewer hours a day than independent drivers. Worse, productivity declines further when employee drivers are actually on the road.
Based on the recent experience of L.A. motor carriers that have utilized employee drivers and independent contractors in the San Pedro Bay harbor complex, productivity among employees was 18 percent lower based on the number of containers moved per shift. There is simply little incentive among employees who are paid by the hour to boost productivity.
Since the implementation of the clean truck program in 2008, the port’s marine terminals have responded by reducing staffing levels and gate hours, which has created lengthy delays for drivers accessing the docks. According to port data, productivity among motor carriers has fallen by 40 percent as a result. There is no need to make a bad situation worse.
The push to regulate harbor truckers is not a passive effort on L.A.’s part. To date, the port has dedicated $265,500 to the yearlong campaign, which is led by former Democratic presidential candidate Richard Gephardt, a staunch supporter of organized labor. The quarter-million dollars would have been better spent on clean truck incentives for hard-pressed motor carriers, among other job-sustaining initiatives.
I have never met Mr. Beutner, but I do not question the praise directed his way of late. By all accounts, he understands the needs of business owners and what it takes to create good jobs. Reversing course at the port and preserving thousands of local small businesses that rely on it would be a good start.
Steve Duchesne is director of the Clean Truck Coalition, an alliance of family-owned motor carriers that move cargo through the ports of Los Angeles and Long Beach.
