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Federal Maritime Commission Rules Against Parts of Port Programs

October 29, 2008

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The Federal Maritime Commission Wednesday said it will seek to block parts of the Clean Truck Programs that went into effect Oct. 1 at the Ports of Long Beach and Los Angeles.
Trucks at the Port of Los Angeles
Trucks at the Port of Los Angeles


Certain provisions of the programs, are "likely ... to produce an unreasonable increase in transportation costs or unreasonable reduction in service." Therefore, the commission says it will file a complaint with the U.S. District Court for the District of Columbia under the Shipping Act of 1984 to enjoin aspects of the Federal Maritime Commission Agreement No. 201170, including concession requirements that mandate exclusive use of employee-drivers rather than the owner-operators traditionally used.

The American Trucking Associations has opposed portions of the plan, both asking the Maritime Commission to review its agreement as well as filing suit to block it.

In a statement announcing the action, the commission said it "appreciates the potential environmental and public health goals of the Ports' CTP, and recognizes that some transportation cost increases may be necessary to generate clean air and public health benefits. However, the commission concluded that the reduction in competition resulting from certain agreement-related activities will result in substantial transportation cost increases, beyond what is necessary to generate the public benefits asserted by the ports."

The statement went on to say the commission believes that "surgical removal of substantially anti-competitive elements of the Agreement, such as the employee mandate, will permit the Ports to implement on schedule, those elements of the CTP that produce clean air and improve public health."

The Shipping Act directs the Federal Maritime Commission to evaluate the potential anti-competitive impacts of all agreements. The Ports of Los Angeles and Long Beach are marine terminal operators under the Shipping Act, and are permitted to collectively develop and implement their CTP pursuant to an agreement on file with the FMC. Subject to the Commission's jurisdiction and ongoing oversight, parties to agreements receive immunity from the U.S. anti-trust laws.

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