Speaking of job-displacement …

The American Trucking Association’s (ATA) suit against the trucking re-regulation plan proposed by the ports of Los Angeles and Long Beach is turning into quite a dogfight. Last month the National Retail Federation (NRF) and the International Association of North America (IANA) joined the suit in support of the ATA, after the National Resources Defense Council (NRDC), the Sierra Club and the Coalition for Clean Air joined the Southern California ports as co-defendants.
According to American Shipper, the re-regulation plan, “set to take affect Oct. 1, seeks to cut ports-generated diesel pollution by replacing or retrofitting nearly 17,000 local drayage vehicles with cleaner models through ports-supplied grants, incentives and subsidies to local motor carriers. To be eligible for the port funds and to continue working in the ports after Oct. 1, motor carriers must obtain a ports-mandated access license, called a concession agreement. Motor carriers must submit internal business information and agree to other ports-defined criteria in applying for the agreement. For the Port of Los Angeles, this includes agreeing to hire only per-hour employee drivers and not independent owner-operator drivers.

“In addition to 2,300 drivers of pre-1989 model year trucks that would be barred from entering the ports on Oct. 1, two ports-commissioned economic impact studies of the truck plan found that 376 of the more than 1,300 ports-servicing trucking firms would be eliminated under the plan. The studies, conducted last year by local economist John Husing, also found that the plan, if fully implemented, would eliminate slightly more than 2,250 back office and support jobs from the local drayage industry.”

Mr. Husing’s studies did not detail exactly how many truck driver positions would be lost when those 376 firms were eliminated, but an American Shipper analysis determined that 6,150 driver positions would be lost, along with an additional 1,500 support positions, as the plan now stands.

Mr. Husing’s analysis also showed that it would cost trucking companies nearly $ 192,000 per truck just to meet the plan’s requirements. An average port trucking company with 36 trucks would therefore need to have roughly $ 7 million to meet the ports’ criteria. This is nearly $ 3 million more than the revenue of the average trucking company model studied by Mr. Husing.

Due to these added costs placed on the surviving trucking companies, Mr. Husing predicted that rates per TEU would increase by 80 percent to as high as $ 540. This figure only includes truck trips out 50 miles from the ports. Truck trips within 150 miles of the ports would be nearly double the shorter trips, and trips beyond 150 miles would see an additional doubling of the rates.

And it could get worse, Mr. Husing pointed out. If the plan is instituted as proposed, the potential existed for larger firms like Schneider International, UPS and FedEx to enter the port market thus bumping some of the smaller local companies … and creating an even longer unemployment line.