California bill would shift some liability for local drayage to shippers and ocean carriers
Staff -- Logistics Management, 4/1/2003
A bill introduced into the California legislature this spring pits trucking concerns against shippers, brokers, and steamship lines that arrange their own inland movements of ocean containers. The Intermodal Reform Act (AB 1651) would require any party that contracts for harbor drayage services to verify that the motor carriers they hire comply with state safety and licensing requirements. The bill also would shift liability in the case of accidents or cargo losses involving non-compliant motor carriers onto the contracting shipper, carrier, or broker.
"The bill's purpose is to go after steamship lines that are arranging truck traffic through store-door rates," explains Stephanie Williams, vice president of the California Trucking Association (CTA), one of the bill's backers. "They're picking their truckers based on criteria that has more to do with low cost than it does with safety."
At the crux of the matter, Williams says, is the fact that ocean shippers and carriers that arrange truck transportation are not subject to the same regulations as are motor carriers that contract with other truckers. "When we pick sub-haulers underneath us, we're responsible for their drug testing and to check their insurance," she says. "If we don't and something happens, we're liable. So why shouldn't that apply to [shippers and carriers] if they're doing the very same thing? If they want to be involved in freight arranging, they should have to live with the same consequences we live with concerning liability."
Robin Lanier, executive director of the Waterfront Coalition, a Washington, D.C.-based group representing ocean shippers, carriers, terminal operators, and other waterfront interests, questions whether AB 1651 is even necessary. In a letter to the bill's author, Calif. Assemblyman Marco Firebaugh, she says that it is in the interest of any cargo owner to select trucking companies that are safe operators. She also notes that her group's members base their hiring decisions on a wide variety of factors, including the reliability and safety of the carrier.
Although that may be true for Lanier's group, Williams says, there are many other companies that do choose local trucking services on the basis of price rather than safety. She expects that the bill, which now applies to a wide range of shippers and carriers, will be amended to focus more directly on companies that hire non-compliant truckers.
The bill also addresses the issue of detention payments and demurrage, referring to them as "unfair business practices"—a definition Lanier disagrees with. "These charges are imposed to encourage the quick removal of containers from terminal facilities," she writes. "Everyone in the transportation chain has an interest in moving freight and repositioning equipment quickly."
Although Williams agrees with that statement, she still questions the appropriateness of leveling these charges. "It's like if a Blockbuster video shuts down because they have a fire and then they charge you for being late two months," she says. "There's no due process; the hearing procedure is: you pay it or you're locked out. And that, we feel, is an unfair business practice."
The two sides also disagree on the potential consequences if the bill should be passed. "These cargo interests are likely to consider other ports of entry or exit in other states for their merchandise if AB 1651 were to be enacted," Lanier writes.
Williams emphatically disagrees. "Where will they go?" she asks. The ports of Los Angeles/Long Beach are the only logical place for huge ships carrying enormous volumes of cargo destined for California to dock, she says.
Both sides have expressed a willingness to meet and discuss the future of the bill.
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