California Apparel News

The countdown clock is ticking for the new Clean Trucks Program set to begin Oct. 1 at Southern California’s two largest ports. But many are wondering if the ports will be ready on time.

With a little more than three weeks left, the ports of Los Angeles and Long Beach still don’t have a software program in place to collect a special $35–per–20-foot container fee to fund the nearly $2 billion program, which helps drivers calling at the ports to buy new trucks.

In addition, a special card reader that would match up the fee-collecting software program with a national online truck registry that shows who owns the truck and its age hasn’t been installed.

“We are concerned because the ports said the new fees would apply Oct. 1, but nothing has been done by anyone to set up the infrastructure to take payment of the fee and release the containers,” said Enrico Salvo, chairman of Carmichael International Service, a Los Angeles freight forwarder and customs broker with a number of apparel clients.

The ports originally called for aSept. 3 meeting at the Hyatt Regency in Long Beach, Calif., where the ports’ two executive directors were to explain how the system was going to work. But that meeting was pushed back to Sept. 11 because not enough information was available about the fee-collecting software system.

With a deadline looming, the ports are not putting the software system up for bid. Instead, they are considering installing the same software system used by PierPass Inc., a 3-year-old program that collects a $50–per–20-foot container fee on any cargo picked up at the ports during the day. The ports’ Clean Trucks fee system would be called PortCheck.

“We [the two ports] are talking to the PierPass people to piggyback on their system,” said Port of Long Beach spokesperson Art Wong.

Port officials hope the fee collection system will be in place by the time theSept. 11 meeting takes place at the Port of Long Beach’s boardroom, which holds only 150 people. The meeting will be Webcast for those unable to fit into the boardroom or unable to trek to Long Beach.

Amid all this is the uncertainty about whether a lawsuit filed in U.S. District Court in Los Angeles by the American Trucking Associations will put a temporary halt to part of the new Clean Trucks Program at the Port of Los Angeles.

The ATA, a conglomeration of state trucking associations, objects to the port’s requirement that only drivers fully employed by trucking companies be allowed to participate in the program. The Port of Long Beach allows independent truck drivers who work on a free-lance basis to enroll in the Clean Trucks Program.

U.S. District Court Judge Christina A. Snyder is hearing arguments on Sept. 8 and will then decide whether a preliminary injunction should be issued forbidding the use of only full-time truckers at the Port of Los Angeles. However, the ATA does not object to the clean-trucks portion of the program.

“I would say we are in a state of flux,” said Patty Senecal, who is in charge of state government affairs for the International Warehouse Logistics Association and is a Los Angeles trucking-company executive. “The vast majority of the industry is waiting for the judge to rule.”

Out-of-state advantage

Until recently, only a few trucking companies had registered to participate in the Clean Trucks Program, which will ban all pre-1989 trucks from the ports on Oct. 1. By 2012, only trucks that meet 2007 EPA standards will be permitted into the ports in order to reduce diesel pollution by 80 percent.

But in late August, the Port of Los Angeles signed up two Phoenix-based trucking companies to join the Clean Trucks Program. Swift Transportation Co. Inc. and Knight Transportation signed letters of intent to call at the port with trucks manufactured in 2007. This is a first for Swift and Knight. They have never called at the ports before. Port officials estimate the two comapnies will eventually have 2,000 trucks in operation.

In return, the port will use clean-trucks funds to give the companies a $20,000 rebate for each 2007 truck used at the port and another $10,000 per truck if they make more than 600 port calls. A new truck costs about $100,000.

The use of out-of-state trucking companies has many local trucking companies fuming. They claim the Phoenix companies don’t pay California business taxes, they buy their trucks outside California and employ out-of-state support personnel. “They just screwed all the trucking companies on Terminal Island [near the port] that sell new trucks,” said one Los Angeles trucking-industry executive.

Port of Los Angeles spokesperson Arley Baker said the Port of Los Angeles now has about 115 trucking companies representing 8,200 trucks applying for the Clean Trucks Program.

That includes National Retail System, a New Jersey–based trucking concern with 200 company-owned vehicles at its Los Angeles–area warehouse.

Andy Miller, the company’s senior vice president of West Coast operations, said the company will buy at least 50 new trucks by Oct. 1 to participate in the Port of Los Angeles’ incentive program.

Not all the trucking-company applications have been processed, and shippers are wondering if there are going to be enough trucks in the program to replace the 16,800 mostly independent drivers that have been calling at the two ports for years.

“Let’s just say the Port of Los Angeles’ plan is going to severely restrict the number of trucks in the program. And that is a concern,” said Erik Autor, vice president of international trade at the National Retail Federation in Washington, D.C., whose members include Wal-Mart Stores Inc., Target Corp. and Macy’s Inc.

And there is still a lot of confusion about how the program will work. “The infrastructure is not ready, and there is uncertainty with the drivers, the motor carriers and the customers,” said the IWLA’s Senecal. “It will be amazing if this program is up and functional on Oct. 1.”

But the Port of Los Angeles’ Baker said everyone is determined to start on time. “Right now we are looking at Oct. 1,” he said. “But, you know, as we move closer to that date, we’re looking at a number of things that we need to have in place, and we will have to assess how everything comes along.”