BILL ANALYSIS
SB 45
Page 1
Date of Hearing: June 27, 2005
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jenny Oropeza, Chair
SB 45 (Alarcon) - As Amended: July 1, 2005
SENATE VOTE : 21-11
SUBJECT : Intermodal marine terminals
SUMMARY : Prohibits, under certain circumstances, monetary
charges imposed by marine terminals on a truck driver for the
late return of specified equipment used for the transporting of
cargo goods from California seaports. Specifically, this bill :
1)Prohibits marine terminal operators from charging per diem,
demurrage, or detention charges to a truck driver transporting
cargo from California's seaports when:
a) The marine terminal truck gate is closed during posted
normal working hours, weekends, holidays, labor
disruptions, and natural disasters.
b) The marine terminal decides to divert equipment without
48 hours of written or electronic notification to the truck
driver;
c) The marine terminal is assessed a fine for violations
related to truck idling;
d) The marine terminal equipment is cited for defective
equipment pursuant to the "Intermodal Roadability
Inspections Program;"
e) A loaded container is not available for pickup when the
truck arrives at the marine terminal; and,
f) The marine terminal is too congested to accept the
container and turns away the truck driver.
2)Specifies that a marine terminal operator cannot take any of
the following actions:
a) Charge back, deduct, or offset per diem charges,
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maintenance and repair charges, or peak hour pricing from a
truck driver's freight bill;
b) Unilaterally terminate, suspend, or restrict the
equipment interchange rights of a motor carrier or truck
driver:
i) When they use the dispute resolution process
contained in the Uniform Intermodal Interchange and
Facilities Access Agreement to contest a charge, fee, or
fine while the dispute resolution process is ongoing;
ii) For late payment of an undisputed invoice from the
marine terminal operator provided that the payment is no
more than 60 days late; and,
iii) For parking tickets issued by the marine terminal
unless the tickets remain unpaid for more than 60 days;
and specifies that a parking ticket cannot be issued to a
truck driver if the assigned parking spot is occupied and
there is no one immediately available to provide an
alternate spot, or if the driver was told to park in a
different spot by marine terminal personnel.
3)Makes the following definitions:
a) "Per diem," "detention," or "demurrage" means a charge
imposed by an equipment provider or marine terminal
operator for late return or pickup of an empty or loaded
intermodal container and chassis."
b) "Closed" means not open or available to receive
equipment. The marine terminal shall have posted working
hours, and "closed" shall mean that the terminal is not
open to release or accept equipment during those posted
working hours.
c) "Divert equipment" means the motor carrier has been
directed to return the equipment to a location different
from the location where the equipment was picked up by the
motor carrier.
d) "Shall not impose per diem, detention, or demurrage
charges on an intermodal carrier" shall apply to the day or
days in question.
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e) "Intermodal marine terminal" means a marine terminal
location or facility that engages in discharging or
receiving equipment owned, operated, or controlled by an
equipment operator.
f) "Written or electronic notification" means any
communication by postal letter, facsimile, electronic mail,
or other electronic notification
EXISTING LAW :
1)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.
2)Sets forth the, "Uniform Intermodal Interchange and Facilities
Access Agreement," a private contract between terminal
operators and truck operators that outlines the rights and
liabilities regarding the use of "interchanging intermodal
transportation equipment" and establishes the terms and
conditions under which the equipment will be used.
FISCAL EFFECT : Unknown
COMMENTS : The bill is intended to establish certain protections
and prohibit marine terminals from penalizing or imposing
certain charges on truck operators related to the transportation
of goods from the state's seaports and the delayed return of
empty cargo containers.
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
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indirectly approximately 260,000 jobs.
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."
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. 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."
Question:
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
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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.)
Related legislation:
SB 348 (Alarcon) of 2003- 04, would have prohibited, under
certain circumstances, charges imposed by marine terminals on
truck operators for the late return of specified equipment.
This bill was vetoed by the Governor. In his veto message, the
Governor stated, "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 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."
July 1, 2005 amendments:
The sponsor of this bill has been working with the Pacific
Merchant Shipping Association (PMSA) with the goal of removing
PMSA's opposition. While PMSA states that these amendments
improve the bill, the changes were not sufficient to satisfy all
of the association's board membership.
The amendments generally clarify existing provisions by
specifying that: a) apart from being closed after normal posted
working hours that closed also means weekends and holidays, or
due to labor disruptions or natural disasters; and b)
consequences for unpaid parking tickets can only occur if the
ticket has been unpaid for more than 60 days, as specified, and
additionally states that no parking tickets can be issued if the
assigned parking spot is occupied and there is no personnel
around to immediately correct the situation or personnel directs
the driver to park the load elsewhere. The amendments also
clarify the definitions contained in the bill.
REGISTERED SUPPORT / OPPOSITION :
Support
California Trucking Association (sponsor)
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4 Season's Transport
A&B Transportation, Inc.
Ability Tri-Modal
Action Freight Services
C~LA Trucking Inc.
California Cartage Company
California Teamsters Public Affairs Council
Commercial Cartage, Inc.
Confident Trans
Container Connection of Southern California, Inc.
Dependable Highway Express
Distribution Express
Expedite Harbor Trucking
Fast Lane Transportation, Inc.
FLS Warehouse & Distribution, Inc.
Honolulu Freight Service
Honor Truck & Transfer
Inter-City Delivery
Intermodal Bridge Transport, Inc.
Lengner & Sons Express
Manning Distribution Services, Inc.
Monk Transportation Ltd.
Northern California District Council-ILWU
Pacer Distribution Services, Inc.
Price Transfer, Inc.
Progressive Transportation Services
Road Transport, Inc.
Rocha Transportation
San Pedro and Peninsula Homeowners' Coalition
Southern Counties Express
Transport Express
VPL, Inc.
One - individual letter
Opposition
None received
Analysis Prepared by : Frances Chacon / TRANS. / (916)
319-2093