The Clean Air Action Plan – Can Ports Compete If It Is Enacted?

By John McLaurin, President, Pacific Merchant Shipping Association

The Ports of Los Angeles and Long Beach have published a draft Clean Air Action Plan (CAAP), a document that was widely publicized and praised by the ports. According to port leaders, the CAAP, in terms that would make Star Trek’s famous Captain James T. Kirk proud, would lead the ports to go “…where no port has gone before,” through a “…new array of technologies and strategies to further lower port-related emissions in the decades ahead.”

The success in reducing transportation emissions related to port activities is well-documented and a function of cooperative and voluntary efforts, as well as compliance with regulatory measures by marine terminal operators, ocean carriers, trucking companies and harbor craft. You would be hard-pressed to name an industry that has seen such dramatic reductions in emissions in as short a period of time as compared to the maritime industry.

But the CAAP will bring about even more transformational changes to the San Pedro waterfront. The draft CAAP represents a gamble on the part of those pushing for these changes to dramatically reduce emissions without negatively impacting jobs or trade volumes.

It is also a gamble by the International Longshore and Warehouse Union (ILWU), which has taken a back seat to the overall zero-emission debate – except to advocate the prohibition of the use of certain public funds for automated zero emissions equipment.

The CAAP’s goals, while admirable, also raise significant questions – queries that must be answered before either port commission approves this document. The most fundamental questions revolve around whether the technology relied on in the CAAP will actually be in existence and commercially available to meet the zero-emission deadlines of 2030.

Second and equally important, where will the money come from (we’re talking about billions of dollars) to pay for this equipment and will exceptionally high costs divert cargo to other gateways?

Why does the CAAP specify a specific technology, power source, and operational mandate? The CAAP declares itself to be “…technology-neutral, fuel-neutral, and operations neutral” – but the current draft has a clear preference for non-automated zero-emissions equipment…equipment that currently does not exist.

With regard to the ILWU, despite the CAAP’s preference for non-automated zero-emissions equipment, will the cost of zero-emissions equipment coupled with operational restrictions and fines be so high as to actually encourage marine terminals to use automation as a way of achieving the port’s zero-emission goals?

Ultimately, all questions about the CAAP circle back to those involving cost, cargo availability, and velocity. According to the Ports of Los Angeles and Long Beach, the cost of the CAAP is estimated to be between $8.5 and $14 billion. Cost estimates utilize prices for “…zero emission options that do not exist.” The port estimates also do not include a number of costs that would directly impact their tenants and customers such as:

• A fee assessed against cargo owners for use of dirty trucks starting in 2023.

• “…increased costs resulting from reduced [terminal] productivity, lost revenue from repositioning of cargo to other terminals during construction, or costs of phased construction.”

• Ongoing operational or maintenance costs.

• Fueling or charging infrastructure for heavy-duty trucks, which will need to exist outside the harbor districts.

• Imposition of fines or penalties on trucking companies or terminal operators for failing to meet appointment window requirements – or the cost of reducing cargo volumes in order to avoid such penalties.

Despite these omissions, the CAAP repeatedly warns about the cost impacts that will be imposed on cargo owners, terminals, ocean carriers, and the ports themselves by stating that, “Keeping the ports economically competitive… will be challenging” and that “…these strategies will place an enormous financial burden on the Ports and the goods movement industry.”

Interestingly, one solution offered by the ports is to impose some of the CAAP strategies and costs throughout the nation “…through state and federal mandates, in order to minimize impacts to economic competitiveness for our customers.” However, assuming that other competing North American port gateways will follow the lead of the ports of Los Angeles and Long Beach is highly speculative, or naïve…or both.

The CAAP also acknowledges that it does not contain a “detailed economic analysis of individual CAAP strategies” and “does not purport to determine the net effect of the CAAP strategies on the industry or public health.” In other words, no one really knows what impact, either for good or bad, the CAAP will bring to the Ports of Los Angeles and Long Beach, surrounding communities, and those that rely on the ports for jobs.

With as yet to be developed technology forming the basis of speculative cost estimates coupled with no reliable funding stream to meet a 2030 deadline that is without rationale, and in the absence of any analysis of the overall economic and environmental net effect, we are left with a CAAP that is based mostly on faith.

On behalf of all of us who work at the ports, let us all pray.