Post by HardTimeTrucker on Sept 4, 2008 19:45:58 GMT -5
JOC
New Trucks Attract Crowds
9/3/2008
By Bill Mongelluzzo
Pier S at the Port of Long Beach was the site for two unusual sights on a recent Friday. In a parking lot directly across from a TWIC sign-up facility, about 150 Teamsters members and supporters gathered to wave signs, shout and use bullhorns to protest against the port's clean-trucks policy.
"Long Beach: I don't need a truck loan. I need to be employed," read one banner.
Just 100 feet away was another type of crowd port and industry officials, trucking company representatives and owner-operators all looking at new, environmentally friendly trucks.
"Being an employee is no good," driver Oscar Dominguez said. "I want to drive my own truck."
The truck Dominguez owns now was manufactured in 1983. On Oct. 1, his truck will be among about 2,000 in the harbor area that will no longer be allowed through terminal gates at the ports of Los Angeles and Long Beach because it is too old and emits too much polluting emissions. So Dominguez is in the market to buy a new clean diesel truck by that deadline.
Drivers Francisco Miranda and Oscar Dominguez look at a new Mack truck at the Port of Long Beach.
Some of the new vehicles will be subsidized through a $35-per-TEU fee that the ports will impose on Oct. 1 on older trucks that don't meet 2007 emissions standards. There are about 16,800 trucks in the harbor fleet, very few meet the stringent pollution standards.
About a dozen models made by seven truck manufacturers were on display at the Clean Trucks Center opened jointly by the two ports.
"Welcome to the Clean Trucks Center , a one-stop center for truckers," said Long Beach Deputy Director Christopher Lytle. "Here, drivers and trucking companies can apply for financial assistance, shop for clean trucks and apply for a TWIC card."
The ribbon-cutting ceremony was heavy on suit-wearing executives, but the facility is really aimed at getting drivers to sign up for the clean-trucks programs that start on Oct. 1 at the ports. By then, each driver whether an employee of a trucking company or an owner-operator needs to be in an updated database that connects the driver to a specific vehicle and to a licensed motor carrier.
Dominguez walked from display to display, talking with truck salesmen.
The trucks on display were on sale for prices ranging from $92,160 for an International Transtar diesel engine with a day cab to $197,123 for a Kenworth LNG-powered engine. But Dominguez and other owner-operators can apply to the Port of Long Beach for a grant of $67,000 per diesel truck or $105,000 for an LNG-fueled truck. Other financial assistance options include leases that start at $300 a month for two years and $500 a month for the next five years or a grant of about $20,000 to retrofit some trucks with new engines.
"I need a truck to stay in business," Dominguez said. "No lease. I'll buy a Freightliner or an International." He has determined that he'll pay about $4,000 more than the base price of a day cab to get a sleeper unit. Although his drayage work is just around the metro area, he said he often gets to the ports hours before the gates open to get in line and other times waits to unload at a shipper's facility.
Husband and wife drivers Inocente and Marisol Medina say they are prepared to buy two new Mack trucks with sleeper cabs before the Oct. 1 deadline, even though the ones they now own won't be immediately barred from the ports as part of the progressive dirty truck ban.
Marisol drivers a 2002 Freightliner, and her husband operates a Kenworth manufactured in 1991. The couple said they like the opportunity to get new vehicles using the grant program. But whether they remain independents or join a trucking company as employees remains up in the air.
"We still don't know what will be best," Marisol said. "Some companies might not want to hire us with the trucks we've purchased."
For trucking companies, there is also a good deal of uncertainty on how to proceed. Most licensed motor carriers are supporting the lawsuit filed by the American Trucking Associations over the ports' concession requirements. The ATA contends the plans are an illegal local effort to regulate interstate commerce. A federal judge will hear arguments on Sept. 8 on the ATA's request for a temporary injunction against the concession plan.
And even though the dirty-truck ban seems almost certain to go into place on Oct. 1, company executives say there are too many unknowns and too many variables to commit such large sums of money.
Carriers can apply to either port for purchase grants or leases, but many seem ready to underwrite the purchases without any financial assistance from the ports. Some corporate heavyweights such as Target, Wal-Mart, Nike and Home Depot have agreed to pay higher drayage rates to pay for the new equipment.
"This program will have a very strong effect on our company," said Jack Hao of Max Express Inc. "We still don't know what step will be the best profit for us. Of course, we support clean air, but this has been forced on us very quickly." One dilemma for carriers, he said, is whether to use the grants. "If we use the grant, then we still have to pay the fee."
Under the ports' clean-trucks plans, part of the Clean Air Action Plan, Los Angeles and Long Beach on Oct. 1 will begin charging importers and exporters $35 per TEU, or $70 per FEU, on all trucks that do not meet emissions standards. The money will be used to help finance the purchase of newer trucks. Shippers using the ports are exempt from the fee if their containers are hauled by a trucking company that privately finances clean-diesel or LNG trucks that meet or exceed the 2007-model year standards.
Jon Tucker, vice president of Patriot Logistics Inc., said his company currently operates using only owner-operators, but the carrier just purchased 18 clean-diesel vehicles. "I'm not sure how we will put those trucks to use," he said. "That hasn't been decided."
Patriot purchased the trucks outright, without using any financial assistance. "There are advantages to carriers to paying for them ourselves," Tucker said. But while he said that carriers with trucks exempt from the $35-per-TEU fee will be able to charge higher rates, he said it isn't clear yet how the rate structure will be set especially at carriers with a mix of vehicles that were purchased with and without grants.
The Port of Los Angeles intends to gradually phase into its clean-trucks plan a Teamsters-supported requirement that harbor trucking companies hire drivers as direct employees. This provision would lift a legal obstacle that prevents unionization by independent contractors, a category that includes most owner-operator drivers.
The Teamsters and environmental groups that are pushing for employee drivers in the harbor say that a sustainable clean-trucks program requires financially sound, licensed motor carriers that have the wherewithal to maintain and repair vehicles, and employee drivers that can earn an adequate wage.
Long Beach does not have the employee-driver requirement in its clean-trucks plan. The port said its program is sustainable because of the port-funded maintenance and repair package and assistance in purchasing the vehicle at the end of the lease.
The difference in programs means that if the concession program is not struck down by the courts, some carriers may be able to operate only at the Port of Long Beach and not across the bridge in Los Angeles .
The myriad uncertainties have many carriers and drivers looking at trucks, but hesitant to make a financial commitment. "A lot of people are hanging back," said Tracy Craik, new truck fleet manager for TEC of California Inc., which sells Volvo and Mack models.
But Los Angeles and Long Beach are under pressure, financially and politically, to put new diesel or alternative-fuel vehicles into the harbor as quickly as possible. The ports' jointly adopted Clean Air Action Plan requires air pollution from trucks to be reduced by 80 percent over the next five years. If that goal isn't met, needed expansion projects for marine terminals, rail facilities and other harbor-related infrastructure will remain stalled.
Importers and exporters who ship through Long Beach have an even greater sense of urgency because that port will allow the exemption only on trucks purchased before Oct. 1. After that date, clean trucks purchased with private money will be granted only a 50 percent exemption from the clean-trucks fee, meaning they'll still have to pay $17.50 per TEU or $35 per FEU. Los Angeles does not have the Oct. 1 cutoff in its clean-trucks plan.
Faced with that arithmetic, many cargo owners have decided that it makes sense to pay higher rates that will enable motor carriers to immediately order trucks that qualify for an exemption from the ports' clean-trucks fee.
This private-financing effort is being led by the Coalition for Responsible Transportation, whose 18 members include trucking companies and third-party logistics companies as well as such industry giants as Target, Wal-Mart, Best Buy, Home Depot, Nike, JCPenney, Hewlett-Packard and Dunavant Enterprises.
Coalition members won't directly buy or finance trucks. That job will be left to trucking companies and owner-operators. But Brian Griley, president of Southern Counties Express, a member of the coalition, said increased drayage rates can cover owner-operators' purchase of new trucks, which can cost $100,000 or more and carry a monthly payment of about $1,800.
Although coalition members are not disclosing the confidential rate increases negotiated between motor carriers and their customers, it's expected to be about $50 per load. If the trucker makes two trips per day and earns $100 more than before the rate increase, the motor carrier will increase its earnings by about $2,000 per month, which would cover the note on the new truck. By contrast, if the cargo owner uses a motor carrier whose trucks are not exempt from the clean-trucks fee, the shipper must pay the ports' clean-trucks fee of $70 for a 40-foot container, which would amount to about $2,800 a month.
Current rates vary by distance. A short haul from the harbor to the Intermodal Container Transfer Facility five miles from the ports might be $100 or less, while a longer haul to the Inland Empire area east of the metropolitan area might be as much as $300.
Los Angeles threw another wrinkle into the program last month when it added another incentive program. The port is offering a separate incentive, a one-time payment of up to $20,000 per truck for carriers that sign up for port concessions and buy their trucks privately.
Two motor carriers, Swift Transportation and Knight Transportation, have signed a letter of intent to participate in this subsidy program, which also would pay them $10 per move if they use the trucks for at least 600 port loads a year, including at least 300 at Los Angeles . That could add up to a $30,000 per vehicle grant but the program isn't open to everyone. Los Angeles said it would choose which trucking companies it wants to participate in the grant program.
New Trucks Attract Crowds
9/3/2008
By Bill Mongelluzzo
Pier S at the Port of Long Beach was the site for two unusual sights on a recent Friday. In a parking lot directly across from a TWIC sign-up facility, about 150 Teamsters members and supporters gathered to wave signs, shout and use bullhorns to protest against the port's clean-trucks policy.
"Long Beach: I don't need a truck loan. I need to be employed," read one banner.
Just 100 feet away was another type of crowd port and industry officials, trucking company representatives and owner-operators all looking at new, environmentally friendly trucks.
"Being an employee is no good," driver Oscar Dominguez said. "I want to drive my own truck."
The truck Dominguez owns now was manufactured in 1983. On Oct. 1, his truck will be among about 2,000 in the harbor area that will no longer be allowed through terminal gates at the ports of Los Angeles and Long Beach because it is too old and emits too much polluting emissions. So Dominguez is in the market to buy a new clean diesel truck by that deadline.
Drivers Francisco Miranda and Oscar Dominguez look at a new Mack truck at the Port of Long Beach.
Some of the new vehicles will be subsidized through a $35-per-TEU fee that the ports will impose on Oct. 1 on older trucks that don't meet 2007 emissions standards. There are about 16,800 trucks in the harbor fleet, very few meet the stringent pollution standards.
About a dozen models made by seven truck manufacturers were on display at the Clean Trucks Center opened jointly by the two ports.
"Welcome to the Clean Trucks Center , a one-stop center for truckers," said Long Beach Deputy Director Christopher Lytle. "Here, drivers and trucking companies can apply for financial assistance, shop for clean trucks and apply for a TWIC card."
The ribbon-cutting ceremony was heavy on suit-wearing executives, but the facility is really aimed at getting drivers to sign up for the clean-trucks programs that start on Oct. 1 at the ports. By then, each driver whether an employee of a trucking company or an owner-operator needs to be in an updated database that connects the driver to a specific vehicle and to a licensed motor carrier.
Dominguez walked from display to display, talking with truck salesmen.
The trucks on display were on sale for prices ranging from $92,160 for an International Transtar diesel engine with a day cab to $197,123 for a Kenworth LNG-powered engine. But Dominguez and other owner-operators can apply to the Port of Long Beach for a grant of $67,000 per diesel truck or $105,000 for an LNG-fueled truck. Other financial assistance options include leases that start at $300 a month for two years and $500 a month for the next five years or a grant of about $20,000 to retrofit some trucks with new engines.
"I need a truck to stay in business," Dominguez said. "No lease. I'll buy a Freightliner or an International." He has determined that he'll pay about $4,000 more than the base price of a day cab to get a sleeper unit. Although his drayage work is just around the metro area, he said he often gets to the ports hours before the gates open to get in line and other times waits to unload at a shipper's facility.
Husband and wife drivers Inocente and Marisol Medina say they are prepared to buy two new Mack trucks with sleeper cabs before the Oct. 1 deadline, even though the ones they now own won't be immediately barred from the ports as part of the progressive dirty truck ban.
Marisol drivers a 2002 Freightliner, and her husband operates a Kenworth manufactured in 1991. The couple said they like the opportunity to get new vehicles using the grant program. But whether they remain independents or join a trucking company as employees remains up in the air.
"We still don't know what will be best," Marisol said. "Some companies might not want to hire us with the trucks we've purchased."
For trucking companies, there is also a good deal of uncertainty on how to proceed. Most licensed motor carriers are supporting the lawsuit filed by the American Trucking Associations over the ports' concession requirements. The ATA contends the plans are an illegal local effort to regulate interstate commerce. A federal judge will hear arguments on Sept. 8 on the ATA's request for a temporary injunction against the concession plan.
And even though the dirty-truck ban seems almost certain to go into place on Oct. 1, company executives say there are too many unknowns and too many variables to commit such large sums of money.
Carriers can apply to either port for purchase grants or leases, but many seem ready to underwrite the purchases without any financial assistance from the ports. Some corporate heavyweights such as Target, Wal-Mart, Nike and Home Depot have agreed to pay higher drayage rates to pay for the new equipment.
"This program will have a very strong effect on our company," said Jack Hao of Max Express Inc. "We still don't know what step will be the best profit for us. Of course, we support clean air, but this has been forced on us very quickly." One dilemma for carriers, he said, is whether to use the grants. "If we use the grant, then we still have to pay the fee."
Under the ports' clean-trucks plans, part of the Clean Air Action Plan, Los Angeles and Long Beach on Oct. 1 will begin charging importers and exporters $35 per TEU, or $70 per FEU, on all trucks that do not meet emissions standards. The money will be used to help finance the purchase of newer trucks. Shippers using the ports are exempt from the fee if their containers are hauled by a trucking company that privately finances clean-diesel or LNG trucks that meet or exceed the 2007-model year standards.
Jon Tucker, vice president of Patriot Logistics Inc., said his company currently operates using only owner-operators, but the carrier just purchased 18 clean-diesel vehicles. "I'm not sure how we will put those trucks to use," he said. "That hasn't been decided."
Patriot purchased the trucks outright, without using any financial assistance. "There are advantages to carriers to paying for them ourselves," Tucker said. But while he said that carriers with trucks exempt from the $35-per-TEU fee will be able to charge higher rates, he said it isn't clear yet how the rate structure will be set especially at carriers with a mix of vehicles that were purchased with and without grants.
The Port of Los Angeles intends to gradually phase into its clean-trucks plan a Teamsters-supported requirement that harbor trucking companies hire drivers as direct employees. This provision would lift a legal obstacle that prevents unionization by independent contractors, a category that includes most owner-operator drivers.
The Teamsters and environmental groups that are pushing for employee drivers in the harbor say that a sustainable clean-trucks program requires financially sound, licensed motor carriers that have the wherewithal to maintain and repair vehicles, and employee drivers that can earn an adequate wage.
Long Beach does not have the employee-driver requirement in its clean-trucks plan. The port said its program is sustainable because of the port-funded maintenance and repair package and assistance in purchasing the vehicle at the end of the lease.
The difference in programs means that if the concession program is not struck down by the courts, some carriers may be able to operate only at the Port of Long Beach and not across the bridge in Los Angeles .
The myriad uncertainties have many carriers and drivers looking at trucks, but hesitant to make a financial commitment. "A lot of people are hanging back," said Tracy Craik, new truck fleet manager for TEC of California Inc., which sells Volvo and Mack models.
But Los Angeles and Long Beach are under pressure, financially and politically, to put new diesel or alternative-fuel vehicles into the harbor as quickly as possible. The ports' jointly adopted Clean Air Action Plan requires air pollution from trucks to be reduced by 80 percent over the next five years. If that goal isn't met, needed expansion projects for marine terminals, rail facilities and other harbor-related infrastructure will remain stalled.
Importers and exporters who ship through Long Beach have an even greater sense of urgency because that port will allow the exemption only on trucks purchased before Oct. 1. After that date, clean trucks purchased with private money will be granted only a 50 percent exemption from the clean-trucks fee, meaning they'll still have to pay $17.50 per TEU or $35 per FEU. Los Angeles does not have the Oct. 1 cutoff in its clean-trucks plan.
Faced with that arithmetic, many cargo owners have decided that it makes sense to pay higher rates that will enable motor carriers to immediately order trucks that qualify for an exemption from the ports' clean-trucks fee.
This private-financing effort is being led by the Coalition for Responsible Transportation, whose 18 members include trucking companies and third-party logistics companies as well as such industry giants as Target, Wal-Mart, Best Buy, Home Depot, Nike, JCPenney, Hewlett-Packard and Dunavant Enterprises.
Coalition members won't directly buy or finance trucks. That job will be left to trucking companies and owner-operators. But Brian Griley, president of Southern Counties Express, a member of the coalition, said increased drayage rates can cover owner-operators' purchase of new trucks, which can cost $100,000 or more and carry a monthly payment of about $1,800.
Although coalition members are not disclosing the confidential rate increases negotiated between motor carriers and their customers, it's expected to be about $50 per load. If the trucker makes two trips per day and earns $100 more than before the rate increase, the motor carrier will increase its earnings by about $2,000 per month, which would cover the note on the new truck. By contrast, if the cargo owner uses a motor carrier whose trucks are not exempt from the clean-trucks fee, the shipper must pay the ports' clean-trucks fee of $70 for a 40-foot container, which would amount to about $2,800 a month.
Current rates vary by distance. A short haul from the harbor to the Intermodal Container Transfer Facility five miles from the ports might be $100 or less, while a longer haul to the Inland Empire area east of the metropolitan area might be as much as $300.
Los Angeles threw another wrinkle into the program last month when it added another incentive program. The port is offering a separate incentive, a one-time payment of up to $20,000 per truck for carriers that sign up for port concessions and buy their trucks privately.
Two motor carriers, Swift Transportation and Knight Transportation, have signed a letter of intent to participate in this subsidy program, which also would pay them $10 per move if they use the trucks for at least 600 port loads a year, including at least 300 at Los Angeles . That could add up to a $30,000 per vehicle grant but the program isn't open to everyone. Los Angeles said it would choose which trucking companies it wants to participate in the grant program.