New $90 million air pollution rules in effect at POLB and POLA with $10 per TEU fee

As usual, California is leading the way to cleaner air around ports with a new program expected to generate $90 million in new fees from trucks entering and leaving California’s two largest ports.

Effective April 8, the Ports of Long Beach and Los Angeles will start collecting a $10 per TEU ($20 for containers longer than 20 feet) fee on loaded import and export containers as they enter or leave container terminals.

It’s all part of California’s goal of achieving a zero-emissions drayage industry by 2035. The two San Pedro Bay ports have seen a combined decline of 56% in aging cargo on the docks since the program was announced on Oct. 25.

The executive directors of both ports say they will reassess fee implementation after monitoring data over the next week. Fee implementation has been postponed by both ports since the start of the program.

Under the temporary policy, ocean carriers can be charged for each import container dwelling nine days or more at the terminal. Currently, no date has been set to start the count with respect to container dwell time.

In 2017, the Ports of Long Beach and Los Angeles adopted a Clean Air Action Plan (CAAP) Update. It outlined strategies to reduce pollution from port-related sources. One of the strategies outlined in the 2017 CAAP Update is to reduce pollution from on-road drayage trucks through updates to each port’s Clean Truck Program.

It was to begin with two phases:

The first phase of the updated Clean Truck Program required any new registrations in the Port Drayage Truck Registry (PDTR) after Oct. 1, 2018, to be model year 2014 or newer trucks; and

The second phase of the Clean Truck Program is the development and implementation of a Clean Truck Fund (CTF) rate. A resolution setting a CTF rate of $10 per twenty-foot equivalent unit (TEU) was adopted by the ports’ Boards of Harbor Commissioners in March 2020. The tariffs were approved by the boards in November 2021. Collection was scheduled to begin on April 1, but has been delayed until April 8.

“It’s critical we transition to a zero-emissions fleet,” Long Beach Mayor Robert Garcia said in a statement. “The Clean Truck Fund provides critical incentives for the trucking industry to phase out older, more polluting trucks for zero emissions technology.

Los Angeles Mayor Eric Garcetti agreed, saying: “When it comes to confronting the climate crisis, Los Angeles doesn’t wait for solutions to show up on our doorsteps—we forge the path for cities around the world to follow.”

Long Beach Harbor Commission President Steven Neal added, “California has some of the worst air pollution in the country, and government agencies have a responsibility to find solutions and protect health in vulnerable communities. This is an important step and provides financial assistance to the trucking industry to buy new vehicles as we collaborate to deliver our goal of a zero-emissions truck fleet.”

The purpose of the CTF Rate is to generate funds to accelerate the deployment of clean trucks, in support of achieving the goal of a zero-emission drayage truck fleet by 2035.

Starting April 8, a $10 per TEU ($20 for containers longer than 20 feet) will be charged on loaded import and export containers hauled by trucks. Exemptions are provided for containers hauled by low-nitrogen-oxide (NOx) or zero emission (ZE) trucks. Containers hauled by ZE trucks will be permanently exempt from the rate. Low-NOx trucks will have limited exemptions out to certain dates depending on the port the truck visits, varying by port as below:

At Los Angeles, low-NOx trucks registered and placed into service by Dec. 31, 2022, will receive an exemption through Dec. 31, 2027; 

At Long Beach, low-NOx trucks purchased prior to Nov. 8, 2021, that remain with the original owner will be exempt through Dec. 31, 2034. Low-NOx trucks that are purchased and registered in the PDTR by Dec. 31, or that are purchased by July 31 and registered in the PDTR within 30 days of delivery, will receive an exemption at Port of Long Beach (POLB) through Dec. 31, 2031.

What are zero-emission (ZE) and low-nitrogen-oxide (NOx) trucks?

A zero-emission truck means a drayage truck that meets the definition of “Zero Emission Vehicle” in the California Air Resources Board (CARB) Advanced Clean Truck Regulation—“an on-road vehicle with a drivetrain that produces zero exhaust emission of any criteria pollutant (or precursor pollutant) or greenhouse gas under any possible operational modes or conditions.”

Low-NOx trucks given a limited exemption period to incentivize the early deployment of low-NOx trucks to achieve near-term criteria pollutant (i.e., diesel particulate matter and nitrogen oxide) emission reductions. The ultimate goal of the 2017 CAAP Update is to transition to 100% zero-emission-drayage operations by 2035, officials said.

A low-NOx truck is defined by the ports. At Los Angeles, a low-NOx truck is defined as a truck that meets or exceeds the manufacturing standard for engines under the Low-NOx Omnibus Regulation adopted by CARB.  

Long Beach defines a low-NOx truck as a truck that meets the optional 0.02 grams per brake horsepower-hour standard or the final 2027 model year 0.02 grams per brake horsepower-hour standard NOx engine emission standard under the Low NOx Omnibus Regulation adopted by CARB.

Who is paying the CTF rate?

Beneficial Cargo Owners (BCOs) or their authorized agent are responsible for paying the CTF rate, according to a press release from the ports. Each port’s tariff includes a provision prohibiting the CTF rate being paid by truck drivers.

When does the rate collection begin?

April 8, 2022. The tariffs currently state the CTF rate will end on Jan. 1, 2035, but that may be subject to change. They originally were slated to begin April 1

There are no additional charges required of payers beyond the $10/TEU CTF rate. The ports will fund their costs for the CTF rate collection and program administration out of the collected rate revenues.

How will the CTF rate be collected?

A third-party entity, PortCheck, was selected by both ports to provide the mechanism for the CTF rate collection. BCOs or their agents will be responsible for logging into the PortCheck system to clear the containers prior to pick up or drop-off by the drayage truck. The CTF rate web portal will be connected to the existing PierPass system.

To ensure a smooth rollout and avoid disruptions to trucking activity, both ports have been conducting outreach to BCOs and the trucking industry to explain the new program. The first workshop was held in January and additional engagements continue up to the April 8 start date.  Step-by-step presentations on how to pay the CTF rate, are available at www.cleanairactionplan.org/strategies/trucks.

PortCheck will also have user support available once the system is live.

Any fees collected from dwelling cargo will be reinvested for programs designed to enhance efficiency, accelerate cargo velocity and address congestion impacts, according to the ports.

The policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, Department of Transportation and multiple supply chain stakeholders.

The Port of Long Beach is the second-busiest container seaport in the United States. It handles trade valued at more than $200 billion annually and supports 2.6 million trade-related jobs across the nation, including 575,000 in Southern California.