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Thursday, May 6, 2010

SoCal Ports' Truck Plans Face Congress: Truck Subsidies and Lawsuits

During Wednesday testimony before the House Committee on Transportation and Infrastructure Subcommittee on Highways and Transit, officials from the two Southern California ports touched on how the ports subsidized new trucks under their respective truck plans and litigation over the plan.

John Holmes, deputy executive director of the Port of Los Angeles, said that through his port's investment of $60 million in incentives to trucking firms, the truck plan has encouraged trucking firms to deploy newer truck models that meet the port's emissions standards.

"We believe that asset-based trucking is a sustainable model that will provide companies the ability to replace the current trucks without public money in coming years," said Holmes.

Chris Lytle, deputy executive director of the Port of Long Beach, said that Long Beach has subsidized the purchase of or retrofit nearly 900 trucks through a $52 million investment of Long Beach port funds.

All told, trucking firms servicing the two ports have spent more than $650 million of their own money to replace older trucks with newer models that meet the ports' standards.

In turning to the legal cases that have led to portions of the Los Angeles plan being injuncted in federal court, Holmes called existing federal law on the matter "ambiguous."

The Federal Aviation Administration Authorization Act of 1994 (F4A) – which Holmes referred to – in fact states quite clearly that "a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier or any motor private carrier, broker, or freight forwarder with respect to the transportation of property."

Holmes went on to say that without "clarification" of the F4A, the Los Angeles truck program will not function as intended.

"Without the [truck] program intact, the ability to achieve and sustain the program's goals over the long-term are threatened," said Holmes.

Holmes also suggested a tie between the truck program and the port's market position as the busiest container port in the Western Hemisphere.

"We need the emissions reductions made possible by the truck program to maintain our competitiveness and our role as one of the largest hubs in our national transportation system," said Holmes. "Unless the emissions reductions obtained by the port are sustained, the port will be forced to delay future expansion of our facilities and the jobs that such expansion brings with it."

SoCal Ports' Truck Plans Face Congress: Successes and Differences

Officials from the Southern California ports of Long Beach and Los Angeles testified Wednesday before the House Committee on Transportation and Infrastructure Subcommittee on Highways and Transit. The committee called the hearing to investigate the implementation and impacts of the two ports' truck plans.

John Holmes, deputy executive director of the Port of Los Angeles, began with a Los Angeles perspective of the truck plans, stating that through a series of progressive bans on older trucks the average age of a truck servicing the two ports has declined from 11-years-old before the plans started to a current average of five-years-old. According to Holmes, the average truck now servicing the ports produces 80 percent less pollution than the average truck in service before the truck plan began.

Holmes pointed out that currently 86 percent of cargo moved via truck through Los Angeles is handled by 2007 or newer clean trucks. This has led to a reduction in truck emissions of 70 percent.

Chris Lytle, deputy executive director of the Port of Long Beach, said the Long Beach truck plan is now moving 90 percent of its cargo with 2007 or newer clean trucks. These trucks have led to the reduction of truck emissions from the port by more than 80 percent – beating the Long Beach reduction goals set down in the truck plan by more than two years.

The Los Angeles port also implemented concession agreements as part of the truck plans, which Holmes compared to taxicab licensing agreements. The agreements require truckers wishing to serve the Los Angeles port to sign a contract (concession agreement) and meet certain port-defined criteria, such as the employee-only requirement. Trucking firms who have not signed such agreements are banned from servicing the port. Long Beach has a similar registry contract system but does not require any of Los Angeles' injuncted criteria such as the employee-only requirement.

"Although both ports jointly adopted Clean Truck programs with the same environmental goals," said Lytle, "the programs are not identical."

The most significant difference, according to Lytle, is that the Los Angeles port seeks to eventually bar independent drivers from serving the Los Angeles port. 

"The Long Beach program allows both employee drivers and independent owner-operators to continue to serve the [Long Beach] port," said Lytle. "Of note is that both ports have been able to achieve our environmental goals while utilizing both employee and independent owner-operators."

Rep. Duncan Blasts LA Port's Attempts to Bar Independent Truck Drivers

The ranking republican on a House transportation committee looking into the effect of the Southern California ports' trucking programs on Wednesday, blasted the Port of Los Angeles' attempts to bar independent owner-operators from servicing the port.

House Committee on Transportation and Infrastructure Subcommittee on Highways and Transit member Rep. John Duncan, Jr. of Tennessee said during the hearing that he and many others have concerns about a requirement of the Port of Los Angeles truck plan that calls for all drivers serving the ports to be per-hour employees, instead of per-load independent owner-operators, a status shared by more than 80 percent of the port's current drivers.

The Los Angeles port's employee-only requirement is currently injuncted under order of a federal judge. This court injunction has virtually eliminated the differences between the two ports' individual plans and both ports are currently running truck programs that are virtual mirror-copies of each other.

Duncan pointed out that vast majority of the 800 trucking firms serving the two ports under the truck plans are small businesses with less than 50 trucks.

"The histories of many different industries have shown that if an industry is highly regulated small businesses often go by the wayside and then even medium-sized businesses have trouble surviving," Duncan said. "Then we are left with only a few large companies dominating the market. This reduces competition, hurts small businesses and leads to higher prices."

Duncan said that because the goal of the two truck plans is to reduce truck emissions, a goal both have successfully achieved, this requirement for employee-only drivers is "a solution in search of a problem," and attempting to fix "something that is not broken."

Tuesday, May 4, 2010

TCC Completes First China-to-Los Angeles Run

The inaugural east-west run of the Port of Los Angeles' newest ocean carrier, The Containership Co., ended at the port's TraPac terminal on Sunday.

Dockers at TraPac immediately began unloading TCC's Taicang Dragon vessel, one of five vessels that will rotate in and out of the weekly service to Los Angeles.

Start-up carrier TCC, which is based in Norway, offers express container shipments between China and Los Angeles. The carrier uses a business model similar to the successful no-frills budget airlines like JetBlue.

The carrier expects to move about 250,000 cargo containers through Los Angeles each year.

TCC is also looking to an eventual Pacific Northwest expansion that may include the port in either Seattle or Vancouver, British Columbia.

Tacoma ILWU Seeks to Boost Puget Sound Ag Exports

Officials at International Longshore and Warehouse Union Local 23 in Tacoma are looking to boost agriculture exports through the Washington state port by up to 1,000 containers a month.

The ILWU Local 23’s efforts come on the heels of a recently released federal maritime report that found that Eastern Washington state farmers could increase their exports by 25 percent if given the proper resources.

Local 23 President Scott Mason, who represents about 1,500 dockers, told the Tacoma News Tribune that he is meeting with the state farm bureau and other stakeholders to work out the logistics of making such a boost in exports a reality.

Mason told the Tribune that the idea came to him after he heard President Barack Obama's call to double the nation's exports in the next five years.

SoCal Ports to Hold Public Meeting on $200 Million Ship-to-Shore Funding

The Southern California ports of Long Beach and Los Angeles will host a rare joint public meeting Thursday as part of an effort to garner $200 million in state bond money to expand ship-to-shore electrification, or cold-ironing, of the two ports docks.

Scheduled for 11 a.m. on Thursday at the Port of Long Beach Administrative Building at 925 Harbor Plaza, the meeting will be conducted by staff from the two ports and seek public input on the electrification plans as well as other ideas on how to reduce port pollution.

The electrification program, which provides vessels at dock with connections to the land-based electrical power grid thus allowing the vessels to reduce emissions by turn off their auxiliary engines, is part of the two ports' joint Clean Air Action Plan adopted in 2006. As part of the CAAP, the two ports have already installed such ship-to-shore facilities at a handful of docks, including the BP oil terminal in Long Beach and the China Shipping and TraPac terminals in Los Angeles. Hoteling emissions, generated by the auxiliary engines of vessels at dock to run on-board equipment, are among the largest sources of ports-generated air pollution.

The state bond money being sought is part of the latest allocation of funds from the $20 billion Proposition 1B which was approved by California voters in 2006.

Weber Distribution Names Senior VP, Opens NorCal Facility

Santa Fe Springs, Calif.-based third-party logistics firm Weber Distribution has appointed Marc Levin to senior vice president of client solutions. The 85-year-old firm also announced the opening of a new Northern California hub facility in Stockton.

A 23-year veteran of the logistics industry, Levin joins Weber after serving as Ryder Integrated Logistics' vice president of global business development. Prior to that, Levin served as director of global business development for Menlo Worldwide Logistics.
In his new role, Levin will oversee Weber customers in the areas of chemicals, consumer-packaged goods including food and beverage, import, paper, and retail.

Weber's new custom-built facility, located in Stockton about 60 miles south of the San Francisco Bay, features both temperature-controlled and dry storage areas and offers various services including order processing, label generation, inventory control, routing guide compliance, and pick & pack. The facility is designed to provide Weber customers with LTL, truckload, storage and value-added services for all of Northern California and Nevada ranging from Fresno to Redding and San Francisco to Reno. The Stockton facility will also absorb customers from Weber's shuttered Lodi, California facility.

“We’re Number Two!”

Speaking of the United States at the close of the two-day nuclear security summit in Washington, DC, last month, US President Barack Obama acknowledged “…whether we like it or not, we remain a dominant military superpower…”

While many of us presumably still like being a dominant military superpower, it seems the President feels it is a burden he is unwilling to bear. The President’s underachieving attitude is echoed by many in his administration, who seem to feel the US is too successful.

Earlier in the same week, the administration’s science czar Dr. John Holdren spoke to aspiring scientists at the American Association for the Advancement of Science. Holdren is director of the White House Office of Science and Technology Policy, and chairs the President’s Council of Advisors on Science & Technology (PCAST), making him the top science adviser in the administration.

Holdren, who has argued for the economic “de-development” of America for decades, told the college students that the United States shouldn’t expect to be successful forever.

“We can’t expect to be number one in everything indefinitely,” he said.

In the past, Holdren has argued for a transnational “Planetary Regime” that would assume control of the global economy.

“Should a Law of the Sea be successfully established, it could serve as a model for a future Law of the Atmosphere to regulate the use of airspace, to monitor climate change, and to control atmospheric pollution,” he wrote in 1973. According to Holdren, such a comprehensive Planetary Regime could control the development, administration, conservation, and distribution of all natural resources, renewable or nonrenewable, and could have the power to control pollution not only in the atmosphere and oceans, but also in such freshwater bodies as rivers and lakes that cross international boundaries or that discharge into the oceans. “The Regime might also be a logical central agency for regulating all international trade,” he wrote. Dr. Holdren has not yet described how his dream would affect the Jones Act or the US shipbuilding industry, or indeed the rest of the world’s cabotage laws.

Within days of the President and his Chief Scientist explaining why the US should be aiming lower and “sharing the wealth”, the National Oceanic and Atmospheric Administration, (Territorial Regime?) awarded a $73.6 million dollar, US taxpayer-funded contract to a wholly owned subsidiary of an Italian company, for the construction of a new fisheries survey vessel.

NOAA awarded the American Recovery and Reinvestment Act (ARRA) contract to Marinette Marine Corporation for the construction of the new vessel intended to improve NOAA’s ability to conduct surveys for fish, marine mammals and turtles off the US West Coast and in the eastern tropical Pacific Ocean.

As we noted in this space in April, Marinette is a wholly owned subsidiary of the Italian enterprise Fincantieri-Cantieri Navali Italiani S.p.A. So while the jobs will go to Wisconsin, the profits will go to Trieste, Italy, which, it might be argued, is part of an International, if not yet Planetary, Regime, called the European Union (EU).

According to the EU website, member countries cooperate to ensure “Peace, prosperity and freedom for its 498 million citizens – in a fairer, safer world.” Among other things, the EU promises, “Frontier-free travel and trade…” and cheaper phone calls.

EU citizens were able to take advantage of the cheaper phone calls to talk to their loved ones long-distance last month, as frontier-free travel and trade in the EU was brought to a standstill with the eruption of an unpronounceable volcano in Iceland (EU member since July, 2009).

While the EU felt obligated to ground more than 100,000 flights in areas affected by the dust cloud, US pilots at Alaska Airlines have a tried and true system for navigating volcanic perturbations.

An article in the Wall Street Journal notes that the Seattle-based airline, which encounters volcanic ash in Alaska every couple of years, has developed procedures that minimize disruptions due to volcanic activity.

Computer models predict the trajectory for volcanic ash in Alaska or elsewhere in the Pacific Northwest. When there’s an eruption, the airline scrambles off-duty pilots in empty airplanes to take temperature and wind measurements at various altitudes. The data help validate satellite projections and computer forecasts.

If Alaska Airlines can’t stay at least 35 miles away from ash, it doesn’t fly, nor does it operate if it’s nighttime and pilots can’t see, or if the airline isn’t sure of the actual winds aloft.

Alaska Airlines puts all 1,400 of its pilots through an ash encounter in recurrent training. In a cockpit simulator, engines suddenly flame out and the “aircraft” loses pressurization. Pilots, wearing smoke goggles and oxygen masks, must figure out how to restart them and return to an airport.

Late last month, Alaska Air Group reported first quarter profits and held the No. 1 spot in on-time performance among the 10 largest US airlines.

“Producing a profit in our seasonally weakest period is particularly noteworthy,” says Bill Ayer, Alaska Air Group’s chairman and chief executive officer. “The last time we reported a significant first-quarter profit was in 1999.”

So US innovation keeps US planes flying over the US. This allows Alaska Airlines to safely continue to make a profit while its competitors might be grounded. We doubt, for example, that EU airlines will be showing much of a profit this year.

Sorry, Mr. President- number one still looks pretty good to us.

Chris Philips , Managing Editor