Despite legal challenges and resistance to increased fees, the Southern California ports of Los Angeles and Long Beach are on a record pace to reduce air pollution, but the improvements are at the expense of fresh produce service.
As part of the ports’ Clean Air Action Plan, fleet operators have replaced in just nine months more than 4,000 older diesel tractors with new, cleaner rigs, said Marcel Van Dijk, marketing manager for the Port of Los Angeles.
“The port is reimbursing fleet operators up to $20,000 for each truck replaced with a new tractor,” Dijk said.
The money for the $44 million reimbursement fund is coming from increased fees of $35 for each 20-foot equivalent unit (TEU) container — $70 for each 40-foot container — hauled to or away from the ports. The fees are not imposed, however, on the new clean trucks, Van Dijk said.
Not all importers and exporters have warmed to the fee hike.
“Of course, every fee you impose is not welcome to the logistical community,” Van Dijk said.
Importers, such as Target Brands, Minneapolis, Minn. and Nike Inc., Beaverton, Ore., have gone above and beyond, he said. Those companies and others have committed to paying higher freight rates to trucking fleets that purchase the new, cleaner trucks and serve the ports.
The fees have proved to be a burden to California grower-shippers, especially those in the San Joaquin Valley. As a rule of thumb, Van Dijk said, growers based south of Fresno export their produce through the southern California ports while those from Fresno north truck to the Port of Oakland.
“Because of the fees, some southern valley produce is going to Oakland,” he said. “We are definitely losing a little market share because of the truck program.”
Trucking the valley’s produce to Oakland does have drawbacks, Van Dijk said, because the bay area port does not have shipping service to northern China and other parts of Asia. Los Angeles does.
Courtesy Port of Los Angeles
Courtesy Port of Los Angeles
The reimbursement program, announced in June of last year, quickly grabbed the attention of trucking companies. By Oct. 1, nearly 600 companies had signed up to participate in the program, which officially got under way Feb. 18.
“The program has been so successful, because private industry really stepped up to the plate and started buying the new trucks,” Van Dijk said.
There have been speed bumps. The Federal Maritime Commission filed suit to block the program. The federal agency claimed that by adopting the truck plan and related concession agreements the ports of Long Beach and Los Angeles violated federal trade laws.
FMC decisions have twice delayed the ports’ plan to charge container fees. Those decisions were ultimately overturned by the FMC’s governing board, and the commission requested June 16 that the court dismiss the case. If the request is granted, the ports’ clean truck program will continue unabated — and a second phase will commence, Van Dijk said.
The L.A. Harbor Commission, which oversees the Port of Los Angeles, approved yet another $44 million incentive plan on May 9 aimed at encouraging fleet operators to purchase battery-powered trucks and trucks fueled by liquefied natural gas, he said. The goal is 100 battery powered trucks and 900 LNG rigs by the end of this year.
The price of a battery powered truck approaches $200,000, Van Dijk said, about twice the price of new diesel rigs. To achieve its goal, the Harbor Commission is offering up to $80,000 stipends to buyers of the first 50 battery powered and the first 450 liquid natural gas fueled trucks purchased for port use, he said.
When set in motion Oct. 1, the clean truck program was projected to be a five-year endeavor. At the current conversion pace, the program may conclude in half that time or less, Van Dijk said.
“Our records for April and May show up to 45% of all drayage was transported on the new, clean trucks,” he said. “The percentage is even higher during off peak hours and Saturdays; I think it was about 60% of all the drayage was on clean trucks.”
The clean air program has been a boon to new truck dealers in the Los Angeles basin, especially so in a down economy. Sales of Class A trucks nationwide were down 60% in the first quarter of 2009 compared to the same period a year ago, but truck sales in greater Los Angeles actually increased over 2008 during the same period this year, Van Dijk said.
The Clean Air Action Plan was not driven by environmental concerns alone. The busy twin ports need to expand, but the Harbor Commission and state officials insisted on improving air quality before they would grant approval for the expansion.
Trucks are just one leg of the Clean Air Action Plan. The twin ports have made air quality improvements in ships, terminal equipment and harbor craft, Van Dijk said.
“We are an expensive port, because of our location,” he said, “but efficiency wise, we can compete with any other port in North America; we are expanding, and we are efficient.”