Friday, June 10, 2011

Stressful Week for LA Port Regarding Trucks

It has been a stressful week for the Port of Los Angeles when it comes to trucks.
On Friday, port attorneys plan to argue the case for portions of their clean truck program before the Ninth Circuit Court of Appeals in what is likely a final step before heading to the United States Supreme Court.

Earlier in the week, the Los Angeles Business Journal disclosed that the port's $5 million investment as part of the truck plan in new all-electric drayage trucks has come to naught.

And, the port released a report that found six of the 60 trucking firms that received truck program incentive funds owed the port more than $1.5 million in refunds due to low participation of their trucks.

In the Ninth Circuit case, the port will face off Friday against the American Trucking Associations over portions of the clean truck program that started in October 2008.

The ATA sued the port shortly before the clean truck program started and after nearly three years of legal wrangling, the appellate court will decide the case after hearing oral arguments from both sides Friday.

A lower court has already ruled that portions of the port plan, most notably a mandate that trucking firms servicing the port must hire drivers as per-hour employees and not as per-load independent owner operators, violate federal interstate commerce laws. However, the lower court judge ruled the port is excluded from the regulations because it is a market participant in port drayage, despite not owning, contracting or having any involvement in drayage other than setting truck program regulations.

Insiders all agree that no matter who wins in the Ninth Circuit, the case is headed for a showdown before the US Supreme Court.

Electric Trucks
On Monday, the Los Angeles Business Journal reported that a $5 million investment in all-electric drayage trucks had resulted in all but one of the 15 high-tech trucks sitting unused only two years after being purchased.

The problem: when under load in a real world situation, the batteries in the trucks only offered half the range they were supposed to. 

“They don’t work. While the driver is working, they run out of juice and the truck has to be towed back. It just ruined our daily operations,” California Cartage CEO Robert Curry told the LABJ. Cal Cartage was one of the firms the port allowed to use the electric trucks for free. The trucking firm was so dissatisfied they gave the trucks back to the port early.

Efforts are now being made to retrofit a half dozen of the trucks with hydrogen fuel cells and two other trucks are set to be retrofit with stronger batteries. The remaining trucks are likely to wind up at distribution centers, the LABJ reported, where they can carry lighter loads.

Incentive Refunds
In addition to the $12.5 million investment in new technologies like the electric trucks, Los Angeles port officials in the first year of the truck program also paid out $44 million in incentive checks to trucking firms willing to switch to clean trucks. Part of the deal to obtain the $20,000 per truck incentives was that the trucks had to turn a certain number of runs each year at the port – initially set at 300 per year, but then scaled back to 150 trips by the port last year.

An analysis of truck data released by the port this week found that six of the 60 truck firms that received incentive funds had trucks that didn’t meet the 150 trips a year minimum, and now the port is asking for the incentive money paid on those trucks to be refunded to the port.

Swift Transportation, the largest recipient of the incentive funds, owes just under $1.5 million according to the port. The remaining five companies owe between $80,000 and $14,000 each.

An initial port analysis presented in May 2010 when the port was considering lowering the trips per year threshold found that about 400 of the 2,200 trucks that qualified for the incentive funds never made a single trip. The analysis found that roughly seventy percent of the 2,200 trucks, around 1,600, would meet the lower 150 trips per year threshold for the year ending June 30, 2010.