BILL ANALYSIS Ó AB 600 Page 1 Date of Hearing: April 29, 2013 ASSEMBLY COMMITTEE ON TRANSPORTATION Bonnie Lowenthal, Chair AB 600 (Bonta) - As Amended: March 19, 2013 SUBJECT : Intermodal marine terminals: truck equipment moves SUMMARY : Restricts an intermodal equipment provider from unilaterally requiring a motor carrier to return intermodal equipment to satellite locations unless the requirement is specified in a written bilateral agreement. Specifically, this bill : 1)Changes the term "intermodal marine equipment provider" to "intermodal equipment provider" and defines the new term to mean "any party authorizing delivery or receipt of physical possession of equipment with a motor carrier (trucker) commonly used in the road transport of intermodal freight, including, but not limited to, trailers, chassis, containers, and associated devices, but excluding, tractors. This definition applies to all intermodal equipment providers, regardless of whether the party participates in the Uniform Intermodal Interchange and Facilities Access Agreement." 2)Modifies the circumstances under which an intermodal equipment provider or an intermodal marine terminal operator is prohibited from imposing per diem, detention, or demurrage charges. 3)Extends restrictions placed upon intermodal equipment providers from unilaterally terminating, suspending, or restricting the equipment moves of a trucker after a challenge by a trucker is resolved in the trucker's favor. 4)Requires a trucker to return intermodal equipment to locations other than where the equipment was received unless the intermodal equipment provider directs, with reasonable advance notice, the equipment to be returned to a satellite location as governed by a bilateral agreement. 5)Prohibits an intermodal equipment provider from unilaterally requiring a motor carrier to return intermodal equipment to satellite locations through notifications not specified in the written bilateral agreement between the intermodal equipment AB 600 Page 2 provider and the motor carrier. EXISTING LAW : 1)Prohibits, under certain circumstances, marine terminals from imposing charges on a truck operator for return of equipment late. 2)Under federal law, pursuant to the Federal Aviation Administration Authorization Act of 1994 (F4A), basically prohibits any state from enacting a law relating to rates, routes, or services of any intermodal all-cargo air carrier when it is transporting property, pieces, parcels, or packages between states or within a state by aircraft or motor vehicle (whether or not such property has had or will have a prior or subsequent air movement). FISCAL EFFECT : Unknown COMMENTS : California's intermodal container port facilities serve as the gateway for international commerce and generate significant stimuli to the California economy. International trade is a major force in California's economy, currently accounting for nearly 25% of the state's economy. With major port facilities in the San Francisco and Los Angeles areas, California is a major gateway for products entering and leaving the United States. Many goods moving through California ports, such as industrial and postconsumer secondary materials, originated in other states. According to the California Marine and Intermodal Transportation System Advisory Council, more than 40% of the total containerized cargo entering the United States, arrived at California ports; and almost 30% of the nation's exports flowed through ports in the Golden State. 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 goods or containerized material is then transported from the ports to warehouses, retail establishments, manufacturing facilities, and railyards. Accordingly, the movement of freight involves multiple modes of transit: truck, ship and rail. During a single move, a container may be handled by all three modes. Currently, interchange agreements establish the commercial terms by which intermodal equipment, including trailers, chassis, AB 600 Page 3 containers and associated devices, changes hands and is returned to the equipment provider. A motor carrier (trucker) is typically required to return intermodal equipment to the location it was originally received. However, an equipment provider may redirect the return of equipment to another "satellite location" within the same commercial territory by either: 1) a written bilateral agreement; or 2) unilaterally by providing notification via internet posting, e-mail, or shipping order. This bill is intended to clarify the rights of intermodal motor carriers and truck drivers regarding the pick-up and delivery of intermodal equipment and would prohibit the imposition upon truckers of equipment diversions to satellite locations by an intermodal equipment provider. Further, 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. Back at the table : SB 45 (Alarcón), Chapter 244, Statutes of 2005, established state law prohibiting certain "late charges" from being assessed to motor carriers due to events not within their control which prevent them from returning equipment to intermodal marine terminals. The author contends that state intervention is again required indicating that "the intermodal motor carriers and truck drivers operating at the Ports of Long Beach, Los Angeles, and Oakland have reported an increasing number of incidents where intermodal equipment providers have directed the diversion of equipment to locations far from the port property and unilaterally set compensation rates that may be insufficient to even cover basic vehicle operating costs. With satellite locations potentially miles away from the port property, the repositioning of intermodal equipment can impose significant costs on port truck drivers and severely impact the opportunity of port truck drivers to make additional turns, or trips to the port." Opposition : Writing in opposition to this bill, organizations representing the shippers and marine terminal operators contend that the federal law (F4A) establishes uniform regulations for the truckers so that individual states and local governments do not create their own rules, resulting in a patchwork, regulatory framework leading to inefficient commerce at the interstate, intrastate, and international levels. They believe that AB 600 AB 600 Page 4 violates the restrictions of F4A. They further contend that the pick-up and return locations for the equipment are generally well established and known by all parties prior to commencement of the move. They argue that, in some cases, the return location must be changed to ensure the proper inventory balance of the equipment. Such circumstances are addressed in the Uniform Intermodal Interchange and Facilities Access Agreement (UIIA), a national compact that sets forth the terms and conditions for the transfer and operation of equipment under interchange between ocean and rail carriers and motor carriers. The Pacific Marine Shipping Association indicates, although they are opposed to the bill, that they are willing to work with the author to develop acceptable language authorizing equipment moves and returns relative to binding and non-binding agreements. The author has agreed to not move the bill, without consensus, to the Assembly Floor should it pass out of this committee. Related bills : AB 2058 (Pan) of 2012, would have required truck insurance requirements to be posted by intermodal marine terminal operators at the California ports. Although that bill passed out of this committee, it was later amended in the Senate to pertain to voter paid registrations. SB 719 (Vargas) of 2011, would have required the California Department of Motor Vehicles to adopt regulations pertaining to trucker minimum insurance requirements. That bill was held in the Senate Transportation and Housing Committee. SB 45 (Alarcon) Chapter 244, Statutes of 2005, regulates detention and per diem charges imposed by intermodal terminals on intermodal equipment transported by motor carriers. SB 348 (Alarcon), of 2003, would have prohibited, under certain circumstances, charges imposed by marine terminals on truck operators for the late return of specified equipment. That bill was vetoed by Governor Schwarzenegger stating that the fees charged to truckers deserve a full airing through the legislative process. REGISTERED SUPPORT / OPPOSITION : AB 600 Page 5 Support California Trucking Association (sponsor) Atlas Marine, Inc. California Cartage Company, LLC California Intermodal Associates California Multimodal, Inc. California Trucking Association Charles Diaz Trucking, Inc./Four Seasons Logistics Commercial Carriers Insurance Agency, Inc. CTP Transport, Inc. Desert Express Devine Intermodal Duncan and Son Lines, Inc. Faulkner Trucking, Inc. Fox Transportation, Inc. G S C Logistics Golden State Express Harbor Division, Inc. Impact Transportation LLC Kamal Trucking Corporation K.K.W. Trucking, Inc. Lengner & Sons Express Mutual Express National Distribution Center LP O T D Logistics, Inc. Osterkamp Trucking, Inc. Pacific Coast Truck & Whse Phase II Transportation, Inc. Progressive Transportation Services, Inc. R F T Express, Inc. Roadstar Trucking, Inc. Rocha Transportation Rodgers Trucking Company Sacre & Son, Inc. Southern Counties Express, Inc. Southwest Truck Service Three Rivers Trucking, Inc. United Drayage Company VPL, Inc. Yamko Truck Lines Yandell Truckaway, Inc. Opposition AB 600 Page 6 APL Limited COSCO Container Lines Americas Hapag-Lloyd Hamburg Sud Maersk Line Ocean Carrier Equipment Management Association Pacific Marine Shipping Association The California Railroad Industry Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093