6 October 2008

Customs Update: [US] Ports truck battle

This article is excerpted from the 3 October 2008 edition of “The Journal of Commerce”. It is by Susan Kohn Ross, International Trade Counsel at Mitchell Silberberg and Knupp LLP in Los Angeles. She is also the co-founder of http://www.tradelawyersblog.com/ and co-creator of CTPAT Made Easy, Inc. (http://www.ctpatmadeeasy.com/), an Internet-based program simplifying the application process for the Customs-Trade Partnership Against Terrorism. She can be reached at 310-312-3206 or [email protected].

So far the American Trucking Association is not having much luck staving off the efforts of the Ports of Los Angeles and Long Beach regarding their Clean Trucks plans. The trial court denied ATA’s request for an injunction and the appellate court has now confirmed that decision. Of course, the case still proceeds on the merits, but with the plan having gotten underway Oct. 1, the real concern should be, are the ports ready?

The stated reason for both ports to roll out plans to get old trucks (pre-2007) off the road is to clean up the environment. However, what is really going on is both want to expand and in order to do so they need local community support which is impossible without the environmental clean-up component. Given the generally accepted number of about 17,000 trucks servicing the two ports, will there be enough trucks to continue to move the mountains of cargo which are arriving daily? While no serious problems having surfaced so far, there are many moving parts to be evaluated before a definitive answer can be established.

There are lots of statistics flying around about just how many drivers and truckers are going to be covered by the applications which have been filed. Of course, trucking companies have to file a separate application with each port, and the requirements differ somewhat between the two ports, beyond the Port of Los Angeles mandating all drivers be employees. Complicating things is the fact that all drivers must also have the Transportation Worker Identification Credential. The requirement for TWIC cards was already expected to severely cut into the number of drivers.

Implementation of the ports’ clean-up plans may cut into that number even more.

What is clear is that neither port has been able to put together the Drayage Truck Registry, much less have readers at each terminal, so implementation so far has relied on stickers on truck windshields and individuals reading those stickers. Further, the two ports have short-term contracts with e-Modal.com to build their registries, but that still does not solve the problem of lack of readers, and, frankly, has forced security guards to act as gate keepers.

In the meantime, the $35-per-TEU clean-trucks fee planned to start Oct. 1 so far is being deferred, but when it is collected, it will apply unless you happen to be operating already in compliance with the standards for 2007 trucks and are privately financed.

Throwing an interesting wrench into the situation is the recent action of the Federal Maritime Commission. On Sept. 24, the agency opened a formal investigation into the plans of the two ports. The FMC has jurisdiction because the ports are considered marine terminal operators and so subject to the Shipping Act. Section 10 of the Act prohibits marine terminal operators from giving unreasonable preferences or imposing any undue or unreasonable prejudice or disadvantage.

While the Commission’s investigation does not delay the effective date, it does open another front on which the two ports will have to defend their actions. The ATA has requested the Commission deny the ports anti-trust immunity, so how this plays itself out will indeed be a very interesting addition to the mix. …