BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 45
SENATOR TOM TORLAKSON, CHAIRMAN AUTHOR: alarcon
VERSION: 4/13/05
Analysis by: Randall Henry FISCAL:
No
SUBJECT:
Intermodal marine terminals.
DESCRIPTION:
This bill would prohibit, under certain circumstances, charges
imposed by marine terminals on a truck operator for the late
return of specified equipment used for the transporting of cargo
goods from California seaports.
ANALYSIS:
Existing law imposes special regulations on various business
activities but does not specifically regulate detention and per
diem charges imposed by intermodal terminals on intermodal
equipment used by motor carriers.
This bill would :
Prohibit an intermodal marine equipment provider or
marine terminal operator from imposing per diem or
detention charges on an intermodal motor carrier relative
to transactions involving cargo shipped by intermodal
transport under certain circumstances.
Prohibit an intermodal marine equipment provider from
terminating, suspending, or restricting equipment
interchange rights of a motor carrier for specified reasons
and from charging back, deducting, or offsetting per diem
charges from the motor carrier's freight bill.
COMMENTS:
1. The purpose of this bill . The bill is intended to
establish certain protections and prohibit marine terminals
from penalizing or imposing certain charges on truck
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operators related to the transportation of goods from the
state's seaports and the delayed return of empty cargo
containers.
2. Trade activity at the ports . International trade and
goods movement are critical elements of the California
economy, representing $350 billion in annual dollar value,
and the state's seaports handle and transport much of this
material for California and the nation. California has
three of the nation's largest container ports: Los Angeles,
Long Beach and Oakland. The Ports of Los Angeles and Long
Beach process nearly 45 percent of the nation's imports,
including over 60 percent of Asian imports shipped to West
Coast port facilities. And according to the Los Angeles
Economic Development Corporation, the economic activity
generated at the Port of Los Angeles facility alone
supports directly or indirectly approximately 260,000 jobs.
3. Importance of truck operators . Most of these goods and
material are transported by cargo containers carried on
truck vehicles. Marine terminal operators at the state's
seaports provide these containers under contractual
agreements to truck operators and the material is then
transported from the ports to warehouses, retail
establishments, manufacturing facilities, and railyards.
According to the author, many of these truck operators,
perhaps as many of 11,000, are "'deployed' by small
trucking companies (more than 300 operate in the Los
Angeles area) licensed to conduct business in California as
port trucking entities. The trucking firms, either
directly or through brokers, contract with the cargo
shippers to provide them independent truck operators (owner
operators/independent contractors). This arrangement is
completed through the use of lease agreements involving the
trucking firms and the operators."
4. Complaints of truck operators regarding late charges .
This bill stems from the complaints of the commercial
vehicle operators that work under these contractual
arrangements regarding the penalties imposed for the late
return of cargo containers which they characterize as
unfair and unwarranted. These vehicle operators argue that
they are "charged late fees for the return of empty
containers, even when terminals are closed or when returned
containers are refused due to congestion in the terminal.
SB 45 (ALARCON) Page 3
They are charged parking fees inside the terminal when
their assigned space is unavailable, and are fined if they
refuse to move containers to off dock and other locations."
They further contend that the cargo shippers have the
power to limit the operation of any truck operator that
fails to resolve a disputed bill and the operator "must
sign adhesive contracts and they have no recourse to a
neutral, third party for the resolution of disputes."
5. Provisions of the bill . In light of these issues raised
by the truck operators, this measure would do the
following:
Provide that "unilateral termination,
suspension, or restriction of equipment interchange
rights of an intermodal motor carrier shall not result
from intermodal marine terminal actions (listed
below)."
Prohibit a marine equipment provider or
terminal operator to "impose per diem or detention
charges on an intermodal motor carrier relative to
transactions involving cargo shipped by intermodal
transport" under any of the following circumstances:
(a) When the marine terminal or terminal truck
terminal is closed .
("Closed" would mean "not open or available to
receive equipment, or change a
location, without a seven-day advance notice by
the equipment provider's facility
to the motor carrier.")
(b) When the marine terminal "decides to
divert equipment without seven days
notification to the motor carrier."
(c) When the marine terminal is assessed a fine
for violations related to truck
idling (Health and Safety Code Sec. 40720).
(d) When the marine terminal is out of
compliance with provisions related to the
"intermodal roadability inspection program"
(Vehicle Code Sec. 34505.9).
(e) When a loaded container is not available
for pickup when the motor carrier
arrives at the intermodal marine terminal.
(f) When the intermodal marine terminal is "too
congested to accept the container
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and turns away the motor carrier."
Prohibit a marine terminal operator from doing
any of the following:
(a) Charging back, deducting, or offsetting per diem
charges from a motor carrier's freight bill.
(b) Unilaterally terminating, suspending, or
restricting the equipment interchange rights of a
motor carrier that uses the dispute resolution process
contained in the uniform intermodal interchange
agreement.
(c) Unilaterally terminating, suspending, or
restricting the equipment interchange rights of a
motor carrier for the late payment of an invoice.
1. Questions
Is the Legislature interceding into what is
essentially a contractual matter involving two private
parties? (The Uniform Intermodal Interchange and
Facilities Access Agreement, a national compact that
sets forth the terms and conditions for the transfer
and conditions for the transfer and operation of
equipment under interchange between ocean and rail
carriers and motor carriers, includes provisions
exempting per diem charges for circumstances beyond
the control of a motor carrier and establishes a
procedure for resolving disputed charges.)
Will this bill possibly result in costly
litigation brought by the marine terminals?
Will this bill, in any way, absolve motor
carriers from contractual responsibilities to return
equipment within a contractually-agreed upon time
frame?
Could this measure contribute to port
congestion and delays?
PREVIOUS LEGISLATION:
SB 348 (Alarcon, 2004) would have prohibited, under certain
circumstances, charges imposed by marine terminals on truck
operators for the late return of specified equipment. (Vetoed
by the Governor. In his veto message, the Governor noted that
"I believe the issue of fees charged to truckers deserves a full
airing through the legislative process. This bill was amended
late in the legislative session with entirely new provisions and
SB 45 (ALARCON) Page 5
did not go through the public process. I encourage the
Legislature and the proponents of this bill to reintroduce this
bill next session and have a full public review on these
critical issues.")
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
April 27, 2005.)
SUPPORT: California Trucking Association (Sponsor)
California Teamsters Public
Affairs Council
OPPOSED: Pacific Merchant Shipping Association