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Federal Maritime Commission ''needs more time'' to evaluate impact of new fee

LOS ANGELES – 12/23/08 – By a 2-1 vote, the Federal Maritime Commission (FMC) has again delayed the collection of a controversial fee levied by the ports of Los Angeles and Long Beach to finance the replacement of thousands of older diesel trucks currently used to haul cargo in and out of cargo terminals at the two ports.

The agency issued a statement saying that it needs “more time” to review the fee and it will continue blocking collection, saying the proposed Port Fees Services Agreement may cause a "substantially anti-competitive" business climate.

“The requested information and documentary material,” the FMC said, “is needed for the Commission to accurately assess the likely competitive impact of the Agreement on transportation costs and services.”

The fee is a critical component of the ports’ Clean Truck Program (CTP) and was supposed to go into effect October 1 with officials at both ports – the two busiest container ports in the country – estimating that they're losing up to $1 million daily because of the delays.

Beginning October 1, the ports effectively banned diesel-powered trucks produced in 1988 and before from operating at either port. The CTP calls for trucks built in 1993 or before and un-retrofitted model year 1994 to 2003 trucks to be prohibited from operating at either port, effective November 1, 2010.

By 2012, nearly the entire truck fleet serving the ports – all vehicles 2006 and older will be banned.

The West Coast Marine Terminal Operator Agreement (WCMTOA) created the not-for-profit company PortCheck to collect the Clean Truck Fee to provide financial assistance for the replacement of as many as 10,000 trucks during the next three years.

Under the provisions of the CTP, the cargo owner (the party named on the bill of lading) is responsible for paying the Clean Truck Fee. The fee would be payable by credit card or electronic funds transfer, and must be paid before a container can enter or leave a terminal at either port.

The Clean Truck Program has come under fire from several industry groups including the American Trucking Association (ATA), which has challenged the program on the grounds that the Concessions Plan provisions of the CTP “violates federal mandates that preempt state and local laws impacting motor carrier rates, routes, and services.”

In late October, the US Department of Justice (DOJ) filed a “friend of the court” brief in support of a challenge by the American Trucking Association (ATA) to a provision of the CTP.

The Commission's most recent request for additional information delays the effectiveness of the plan until 45 days after the parties have submitted the requested information and documents.

Accordingly, as the Port Fee Services Agreement is not yet effective, the Shipping Act prohibits the parties from implementing any program pursuant to the authorities contained in the agreement.

The majority vote opinion stated that “given the significant changes in the nation's economic situation, the Commission must continue to fulfill its statutory obligations to ensure that the agreement will not unreasonably reduce competition in the Ports of Los Angeles and Long Beach.”

Such a reduction, it said, “would raise prices at a time when the American consumer can least afford any added costs, and at a time when Independent Owner Operators can least afford to be driven out of the port drayage market.

Through a comprehensive and up-to-date analysis of the Ports' programs, the Federal Maritime Commission is working to ensure that our foreign trades operate free from substantially anticompetitive activities.”

Port of Long Beach officials criticized the decision calling the FMC move “a stalling tactic that will also block critical environmental and security requirements” while the commission seeks a preliminary injunction against the fees.

"This is extremely disappointing," said Port of Long Beach Executive Director Richard Steinke. "This truck financing fee is a critical, long-planned part of our Clean Trucks Program to protect the public health and improve air quality and security. With the current credit crisis, it will be impossible for truckers to replace all their trucks without our financial assistance program. Every day's delay will make it harder for truck owners to meet our deadlines."

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