The Home Depot is the latest company to join a group of retailers that want to finance new trucks rather than unionize drivers at the twin ports of Long Beach and Los Angeles.
Home Depot has joined Target, Nike, J.Crew Group Inc., and other major importers who plan to use low-emissions “green” equipment at the two ports in order to meet 2007 engine emission standards ahead of the 2012 time frame adopted in early November.
The companies have each joined the Coalition for Responsible Transportation, a one-year-old association of companies that don’t want the ports of Los Angeles and Long Beach to adopt a Teamsters-backed requirement to limit port calls to company drivers.
The coalition wants to offer financing plans for owner-operators at the ports, said Victor LaRosa, president of Total Transportation Services Inc. Other companies such as Lowes and J.C. Penney Co. Inc. have expressed interest in joining the coalition, he said.
“We’re saying it’s time we clean up these trucks and time we provide some kind of industry solution,” LaRosa told Land Line. “We have to go to the cargo owners and ask for higher rates in order to pay for these trucks.”
The ports of Long Beach and Los Angeles adopted plans earlier this month that would require all trucks entering the ports to be 2007 emission compliant by 2012. The ports are scheduled to consider additional measures in December that would require all drivers entering the port to be company employees working for companies that are licensed concessionaires.
Proponents of the concessionaire and employee requirements say the major retailers are trying to pre-empt the port’s consideration of the Teamsters-backed plan and simply don’t want union involvement.
LaRosa declined to respond to a question regarding whether shippers and retailers simply want to avoid the employee/union plan.
TTSI has a total of 400 drivers who work from terminals near Los Angeles, Atlanta, Savannah, GA and Norfolk, VA. The company has plans to open for business at the Port of Seattle – another port wanting to adopt a greenhouse gas emission plan by January 2008.
LaRosa discredited reports that port drivers make less than $7, and said his company can prove none of its drivers make that little. More than 85 percent of TSSI drivers want to remain owner-operators, LaRosa said, due to the freedom that status grants them.
“It’s a pay-as-you-go system,” LaRosa said. “If I want to work my truck 60 hours a week, I can make very good money. If I want to take a week off, I can do that. The big point everybody misses is that our business in Southern California and throughout the U.S. is very seasonally cyclical.”
TSSI, Target and others want to provide trucks to owner-operators at an interest rate of 7 percent, although the coalition hasn’t yet specified whether that rate applies to a lease, a purchase, or both. The coalition is working with Cascade Sierra Solutions, a nonprofit group from Portland, OR, that is arranging for government grants and other funding to purchase new port trucks.
That interest rate would be shockingly low, more than one OOIDA official told Land Line on Thursday, Nov. 29.
OOIDA Regulatory Affairs Specialist Joe Rajkovacz said he has personally witnessed a representative of the loan industry tell Port of Los Angeles officials that truck purchase interest rates charged to owner-operators run between 35 percent and 45 percent.
Lenders say the high interest rates are often “necessary” for some port drivers, many of whom may not have documented residency or full command of the English language, he said.
“By the time they’re done paying for an ’07, they’ll have to get rid of it to get a 2010 engine – it’s the modern-day indentured servitude.”
OOIDA has maintained that its concerns revolve around the port plans’ truck registries, RFID chips, and whether long-haul drivers have access to the port for occasional pickups and deliveries.
LaRosa said the coalition wants the port to start with 300 new trucks immediately, followed by 2,000 if the program proves successful.
Shippers and port trucking companies are wary of the weight of the L.A./Long Beach port precedent and the domino effect likely to follow at ports across the United States, LaRosa said.
“Absolutely,” he said. “As Southern California goes, the nation is going to go.”
– By Charlie Morasch, staff writer