Post by HardTimeTrucker on Aug 26, 2008 11:11:34 GMT -5
By Kristopher Hanson, Staff writer
Article Launched: 08/25/2008 11:39:15 AM PDT
TERMINAL ISLAND - For better or for worse, port authorities are now officially in the trucking business.
Flush with several hundred million in grants and a mandate to clean up the air, authorities in the nation's largest seaport have joined forces with truck manufacturers to - they hope - force a fleet turnover of some 17,000 soot-spewing big rigs within five years.
The goal is to replace the highly polluting, privately-owned rigs now in service with those meeting 2007 emission standards.
The deadline: Jan. 1, 2012.
And the reason is urgent: health studies show diesel soot from sources like trucks and locomotives is a serious killer, prematurely ending the lives of some 3,700 Californians each year through illnesses like lung cancer, heart disease and asthma.
New trucks, experts say, are 90 percent cleaner.
To motivate drivers and trucking companies, port authorities are offering subsidies on new trucks as high as 80 percent - lowering the cost of a $100,000 diesel rig, for example, to about $20,000.
The money comes from state bonds, port profits, regional grants and container fees. The feds were asked to help, but showed little interest and never got involved.
Now, in an effort to publicize the deal, a small army of underlings has fanned out across the port, distributing fliers, talking to drivers and blitzing e-mails and text messages in all directions.
Port authorities have even opened a 'one-stop-shop'
truck retail lot on Terminal Island, in the heart of the port complex, where drivers can fill out loan applications, inspect trucks, meet with port authorities and ask questions.
But, as with most endeavors involving large sums of money, there are strings attached, and that's where port authorities and truckers are hitting roadblocks in the first weeks of the ambitious plan.
They want to replace 2,000 or so trucks by Oct. 1, but only a few hundred drivers have yet signed onto the deal.
Many say that even with the heavy subsidies, the new rigs are just too expensive.
"The deal is good, but it's not great," said truck driver Ramon Velazquez, whose been hauling goods to and from the waterfront for 15 years. "They're paying most of the cost for the truck, but we're still taking on a big payment and we're still responsible for vehicle insurance, registration, fuel, things like that. Right now, with the economy bad, I don't think drivers are making enough to afford all this."
Still considering
But Velazquez, who visited the truck center last week to look over an extended-cab Mack, said the financing scheme has both upsides and downsides, and he's not yet ruled out applying for a grant.
Among the advantages he listed are ownership of an asset (in this case, the truck) that if maintained properly could last 1 million miles or more. There's also tax breaks, better fuel economy and the continued flexibility to work whenever he wants.
Disadvantages, he explained, include higher insurance and registration costs (because the truck is new) and adding a monthly payment to his already stretched financial portfolio (he now owns his current truck outright).
But it was the vulnerability of getting "into bed" with the port that perhaps worried him most.
To obtain the subsidy, the port requires recipients to promise they will make at least 300 trips to San Pedro Bay annually. It also stipulates that drivers commit to staying in California for eight years or 350,000 miles.
"What if I get hurt or take some time off for an emergency?" Velazquez wondered. "There's no guarantee they won't come and take my truck if I'm not working, and that worries me."
Independents numerous
Velazquez isn't alone. In fact, he's one of the nearly 15,000 "independent" owner-operators in a similar position now working in the harbor complex.
These drivers, who comprise 90 percent of the port trucker workforce, are paid by the load to haul goods to and from waterfront marine terminals. They are responsible for their trucks, fuel, insurance, maintenance, registration and related costs.
Because of the high overhead, most drivers opt for low-cost used trucks. The average truck age is 12 years, and it's not uncommon for a driver to break 2 million miles on the odometer.
Plus, a second-hand truck can be bought for as little as $8,000 - one-third the cost of a fully subsidized new rig.
A new truck may be a good investment, but it's never been a necessary one, until now.
Under a joint plan adopted by the ports earlier this year, only 1989 and newer trucks will be allowed access to marine terminals beginning Oct. 1.
The ban grows progressively strict through Jan. 1, 2012, when only trucks meeting federal 2007 emission standards will be permitted access.
And without terminal access, a trucker is as good as out of business.
To maintain control over the grant money and ensure they're not helping purchase trucks that end up working in Idaho, Texas, or anywhere outside the harbor area, the ports' implemented a concession agreement, similar to what cities commonly implement when contracting for taxi services.
The concession gives companies or drivers access to areas where they can make money, in this case, the docks. In return, concessionaire agrees to play by the ports' rules and stipulations.
One of these stipulations says those not enrolled in the concession program are to be denied subsidies.
But the plan is being challenged in federal court by a national trucking association that says the scheme is illegal.
In their legal filing, the American Trucking Association says the plans violate federal commerce laws and violate the spirit of the Motor Carrier Act of 1980, which effectively deregulated the industry.
In the middle of this are motor carriers - licensed trucking firms that serve as middlemen between the docks, controlled by ocean carriers, and distribution centers, controlled by retailers.
For a fee, carriers contract drivers like Velazquez to pick shipments up and deliver them inland, and vice versa. About 1,000 of these carriers are currently licensed to do business in San Pedro Bay, and like the drivers, they're also eligible for subsidies on new trucks.
There are takers
And despite the uncertainty and the strings, some are biting.
California Cartage, one of California's oldest and most established trucking firms, recently ordered 132 Sterling liquefied natural gas trucks for its operation in Wilmington.
South Counties Express, another local firm, has ordered more than 100 alternative-fuel trucks, and a consortium of retailers and motor carriers calling itself the Coalition for Responsible Transportation has pledged to purchase 1,500 new trucks by year's end.
But questions remain.
Many carriers would like the ports to agree to pay for annual registration fees on new trucks, or at least tax, tags and title during the initial purchase.
And trucking firms would also like to see all alternative-fuel trucks exempted from a container fee - an agreement only being offered by the Port of Los Angeles.
Others, however, don't seem to care. They see the deal as a once-in-a-lifetime opportunity.
Jorge Flores, who owns a 1991 International, was spotted looking over an extended-cab Mack on a recent afternoon.
He'd already enrolled in a loan application and was sizing up the cab's bed.
"It's a good deal," Flores said. "They're paying for maintenance and warranty, and I'll end up owing about one-third what I would if I bought the truck myself. Also, this truck can last many years. It's an investment."
Despite the lukewarm response so far, port authorities remain adamant their plan will work in the long-term.
"The bottom line is, this is a responsible solution to get drivers into new trucks at a reasonable cost and without too many complications," said Gill Hicks, a Port of Long Beach consultant hired to help implement the program. "The ports are paying most of the costs."
CLEAN TRUCKS CENTER
The concept: A "one-stop-shop" truck purchasing/leasing center, with diesel and natural gas rigs on-site
Manufacturers: Sterling, International, Kenworth, Mack and Volvo
Where: New Dock Street and Pier S Avenue, Terminal Island
Hours: 9 a.m.-6 p.m. M-F; 10 a.m.-4 p.m. Saturday
Services: Visitors can talk with loan officers, truck retailers, port authorities and insurance representatives.
Contact: www.polb.com/cleantrucks or 888-KLN-TRUX
LEASE/BUY: HOW IT WORKS
Under the "Clean Trucks Program," drivers and motor carriers have two financing options if they decide to purchase a truck using subsidies offered by state and local authorities. Here's a look at one such deal:
Truck: 2008 Mack CXU613 (single cab)
Total Cost: $92,550
Grant subsidy: $67,000
Engine: 13-liter, 425-horsepower
Monthly lease cost to driver (minus $67,000 subsidy): $317 per month for two years, then $517 monthly for five years - total seven-year lease cost is $38,628
*The lease program includes seven years of maintenance valued at $1,600 annually and a warranty. At the end of seven years, leasees can purchase the truck for an additional $7,500 or return it to port authorities.
Outright purchase cost to driver (minus $67,000 subsidy): $25,550
Stipulations: Port authorities require drivers have a Transportation Worker Identification Card (TWIC), meet certain financial criteria, continue working regularly in the ports and agree to scrap their old truck.
Information: www.polb.com/cleantrucks or dial 888-KLN-TRUX (888-556-8789)