Trucking companies that purchased expensive, low-emissions trucks under inducement from a Clean Trucks Program at the Port of Los Angeles and Port of Long Beach are in danger of bankruptcy as reports surface the two port authorities are unable to come up with the funds to meet their promises.
The ports underestimated the number of trucking companies that would take advantage of a $20,000 reimbursement per new truck that met Clean Trucks Program standards.
The Port of Los Angeles expected trucking companies to purchase roughly 1,000 trucks complying with the Clean Trucks Program, but since the program took effect on October 1, the companies have purchased more than 2,000 trucks eligible for reimbursement.
According to a January 27 Los Angeles Times story, the $44 million price tag has taken the port by surprise, and it is putting reimbursements on hold while it searches for funding.
Shortly after publication of the Los Angeles Times article, port officials issued a statement asserting they had made many payments under the program and fully intended to make good on the remaining unpaid claims.
“We do have enough funds to pay each of the approved program applicants the $20,000 per-truck incentive for every qualifying truck they put into port service,” said Port of Los Angeles Chief Executive Geraldine Knatz in a letter to the Los Angeles Times published February 1.
“We are fully committed to paying these funds out,” added Knatz.
Fees May Not Be Legal
The Los Angeles Business Journal, however, reported on January 21 the port’s ability to pay the outstanding claims depends on collecting “clean trucks” fees that have been blocked twice by the Federal Maritime Commission (FMC), the federal agency that oversees the nation’s ports.
According to FMC, the fees violate interstate commerce protections of the U.S. Constitution. The ports of Los Angeles and Long Beach have vowed to collect the fees anyway, with FMC responding by filing a federal lawsuit to block the fee collections.
“Implementation of the fees will allow us to continue to clean our air and our environment for future generations,” said Mike Fox, president and CEO of Fox Transportation, in a Port of Los Angeles press release. Fox is a member of the Clean Truck Coalition, a group of 10 family-owned trucking companies that favor the Clean Trucks Program.
“The sustainability of [the] program is dependent on collection of the Clean Trucks fees at our local ports,” Fox added. “Without the Clean Truck fees, this program will not have long-term viability.”
Regs Would Harm Health
Dr. Henry Miller, a fellow at Stanford University’s Hoover Institution, and Dr. James Enstrom, a research professor at the University of California-Los Angeles School of Public Health, have long argued emission reductions such as those sought by the ports will have little effect on public health, while draining important financial resources away from more pressing issues.
“The fundamental question is whether this project is a cost-effective use of public and private resources,” Miller said. “[The California Air Resources Board] fails to appreciate that the expenditure of public monies is a zero-sum game, and that regulation intended to reduce health risks imposes costs which must be weighed against the benefits.”
Miller added, “To deprive communities or individuals of wealth is to increase their health risks. … The deprivation of income has adverse health effects, including an increased incidence of stress-related problems, including ulcers, hypertension, heart attacks, depression, and suicide.”
John Dale Dunn, M.D. ([email protected]) practices and teaches emergency medicine at Carl R. Darnall Army Medical Center and is an advisor to The Heartland Institute and the American Council on Science and Health.