It should be mentioned at this time that during the past ten years we’ve sent lengthy faxes directly to every official who has expressed concern over the developing problems in West Coast container terminals. Over a ten-year period we’ve described, to at least three dozen officials, the advantages our patented container handling systems have over outmoded conventionally-structured terminals, but nothing has come of our efforts. Things get worse and worse by the day, especially for truckers, thanks to the hair-brained, stop-gap measures that have been put into effect by those officials.
Fran Inman warned port officials and those in government that repeated “usage fees” would bring about a tipping point, but they’ve turned a deaf ear to her as well. But that tipping point is getting closer.
Yesterday the Long Beach Harbor Commission approved a $ 1.6 billion tax on containers, a “special cargo fee” they called it, to raise money for the replacement of “dirty trucks” and clear the way for expansion projects. They’re daydreaming. Or hallucinating. And they’re not being forthright.
A $ 35 “special cargo fee” will be imposed on every container entering or leaving the Long Beach port by truck beginning on June 1, 2008, the commissioners stated. But that $ 35 “special cargo fee” is just double-talk. For example, listen to this con job from the mayor of Long Beach;
“Thirty-five dollars on a container, which are worth an average of $ 70,000, is less than a penny on your iPod, and a few cents is surely not too high a price to pay for dramatic improvements in Southern California air quality.”
The truth is;
• Only a small number of 20-foot containers will pay the $ 35. The great majority of containers are forty-footers and will be charged $ 70. So let’s be honest and tell it like it is. It’s a $ 70 “stupid cargo fee”.
• That “special cargo fee” will be devastating to small businesses and farmers whose cargos tend to be less valuable than shipments of electronics, clothing and furniture. “With the margins in agriculture being so thin, extra port fees and costs can make the difference between winning a foreign sale and losing it to a competitor located in a foreign country,” said Peter Friedman of the Agricultural Transportation Coalition, a group representing many California farmers. The Coalition’s Brian McGuire further stated that, “Any kind of per container fee has a greater detrimental impact on an agricultural export box.” McGuire maintains that while the ports claim that the tax will represent a less than 2.6 percent increase to the cost of shipping each TEU, “It is closer to 10 percent for an agricultural export box.”
• Opponents argue that this new “special cargo fee”, along with the existing $ 100 PierPass fee, will make Southern California ports less competitive.
• Even Governor Schwartzenegger is opposed to the “special cargo fee” because it would hurt U.S. exports by raising shipping costs.
• The employee-only provision of the “Clean Air Plan” is designed to force trucking firms to hire drivers as per-hour workers instead of as independent contractors on a per-load basis, and has drawn heavy criticism from the transportation industry. At present, the vast majority of port drivers are independent owner-operators, and surveys have shown that most do not wish to be employees.
• More than 150 of these independent contract drivers gathered at the entrances of five terminals on Monday, the 17th, in a form of protest. Even though the program would help underwrite the purchase of the new trucks, they say, they couldn’t afford to maintain the vehicles with computer-controlled engines requiring overhauls every three to five years. Many of these truckers earn about $ 8 an hour and rely on friends and “curbside” mechanics for discount repair work. “We all support clean air,” stated one driver, “but none of us wants a loan or a grant to buy a new truck. If these plans become law, I won’t be able to put food on the family table,” he said.
• Trucking companies and shippers are arguing that the ports lack the legal authority to force them to purchase trucks and to employ drivers. Trucks would begin depreciating in value immediately, they say, and if they were forced to employ 16,000 drivers they would be vulnerable to union organizing.
• Based on the ports’ schedule of the plan there it’s doubtful that the “special cargo tax” can raise money quickly enough to prevent wide scale job losses among ports-servicing truck drivers. At an estimated cost of $ 180,000 for each of the 17,000 new trucks, the “special cargo fee” would raise enough money, during the ports’ first round of truck bans, to replace 360 trucks, but in that time period 3,000 trucks will be eliminated. This will leave thousands of drivers banned from working in the ports, and with no funds to replace their vehicles.
• And of course, in an attempt to mollify the rabble, the usual bromide was offered. The owners of the cargo, you see, and not the truck drivers, will be charged the “special cargo fee”. Sure. The “owners of the cargo”, out of the goodness of their hearts, will dig deeply into their pockets and eat those millions of dollars in fees. Pity the poor consumer.
It’s all a scam and officials will get away with it because they’ve managed to convince the public that the trucking industry is at fault for the poor air quality in and around port communities. It’s a diversion — a smoke screen — another form of pollution.
Those port officials, meanwhile, are now free to work on a separate fee which they plan to introduce in the coming weeks. The plan will call for additional fees to be imposed, including a gate fee, which will provide funding for port infrastructure upgrades including an $ 850 million bridge replacement considered critical in their efforts to “grow the port” over the next decade.
To “grow the port”. That’s all that matters. Another example of “the corporate fanning of feathers”.