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  








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            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
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          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  








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          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  :  









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           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