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Truckers Grind Gears Over Subsidies

PORTS: Newcomers get cash for clean vehicles to veterans’ dismay.

Los Angeles Business Journal Staff

A recent move by the Port of Los Angeles to spur interest in its fast-approaching program to replace old diesel trucks is drawing outrage from small local motor carriers that believe they are being unfairly driven out of the port freight business.

The port unexpectedly approved a pair of incentive programs Aug. 21 that would award as much as $30,000 per truck to motor carriers operating less-polluting new diesel rigs as a way to encourage them to service the port.
But since most of the small local trucking companies will have to pay tens of thousand of dollars to buy new trucks, they are at a distinct disadvantage to larger firms, some motor carriers say.

“I’m disgusted that (officials) are taking port money and funding someone who is not a player at the port now and completely ignoring people who have served the port for several decades,” said Fred Johring, president of Rancho Dominguez-based motor carrier Golden State Logistics. “People ought to be appalled. It’s going to seriously disadvantage the small trucker.”

The new incentives were prompted, officials said, by concerns that there will not be enough approved short haul trucks when the program starts Oct. 1. On that date, all trucks built before 1989 will be banned from the port. Even cleaner trucks will be required in the future.

However, the result has been that at least three big out-of-state motor carriers that have new fleets already meeting the program’s guidelines are in line to receive millions of dollars in subsidies – while taking work away from smaller, local carriers.

Secaucus, N.J.-based National Retail Systems Inc. and Swift Transportation Co. and Knight Transportation Inc., both of Phoenix, have signed up for the program. The latter two companies currently have a combined 200 trucks already servicing the ports.

In parting ways with other trucking companies, those out-of-state carriers also have broken ranks with the American Trucking Association, a national trade group which has sued the port claiming the truck replacement program violates federal law.

Meanwhile, smaller local trucking companies say the way the port’s incentives are now structured is tilted in favor of large carriers, some of whom not only may be out of state but may even have never served the ports.

Also, many of the smaller carriers have long claimed that the Port of Los Angeles wants big truck companies to operate there, instead of drivers who are independent owner-operators. That way, some motor carriers say, a union can organize the workers.

As recently as early August, no motor carriers had begun the sign-up process for the Clean Truck Program. But with the new incentives, that logjam appears to be breaking up.

“It’s fair to say there was concern at the ports that they would throw a party and no one would come,” said David Pettit, a senior attorney with the Natural Resources Defense Council, an influential environmental group that has fought to reduce port pollution. “That fear has proved to be unfounded. There are plenty of people who want to come to the party.”

Port officials have noted that at least 40 motor carriers are in the process of signing up to service the port under the program, and the majority of those are local small motor carriers.

In addition, they note, the ports previously committed to subsidize as much as 80 percent of the cost of new clean diesel rigs for every motor carrier that participates in the program. For that reason, officials have said, the incentive program does not favor larger companies.


  February 8 - 14, 2010
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