CA Port Rules are Likely to Increase Container Drayage Costs and Create Capacity Crunch

Under the San Pedro Bay Clean Air Action Plan, two California ports (Los Angeles and Long Beach) adopted new rules that will have a significant affect on container drayage capacity and rates for containers moving through those ports.   The costs may even triple with the new rules!

The new plan permits only concessionaires that are licensed by the ports and who are operating clean trucks to enter the terminals without having to pay a new truck impact gate fee. It further bans 2008, trucks older than 1988 from entering either port.

The Los Angeles rules go even further to ban the use of owner-operators at the port which may force more than 16,000 independent truckers to give up their trucks and become employees of the few larger trucking. It also imposes on the 1,300 drayage companies to only use employee drivers, which may force these small drayage carriers out of business.

Three agencies (the Transportation Intermediaries Association and the National Industrial Transportation League, and the American Trucking Association) have all filed opposition to the new rules. ATA is also challenging these new rules in federal court.

The new rules will cause a significant shortage of drayage capacity at these ports and a significant increase in rates while the remaining companies exercise their new-found market leverage.