Shutting down the port ban on independent truckers

In what was hailed as a “green-blue” coalition, the Port of Los Angeles decided to mandate out independent truckers–largely based on a green rationale. That is, independent contractors tend to have the oldest rigs, as they have less access to capital for new engines or third-party add-on technologies that reduce emissions. Here’s the story from the Journal of Commerce (HT to Peter McFerrin):

As part of its clean-truck program, which is intended to reduce harmful diesel emissions by more than 80 percent, Los Angeles included a requirement that harbor trucking companies hire drivers as direct employees. The port’s reasoning is that in order to sustain a clean-truck program over the years, the burden of purchasing and maintaining expensive new trucks cannot be placed on the shoulders of relatively low-paid drivers.

Environmental justice folks around the region tended to celebrate the port’s decision; I was less enthusiastic. If the problem is that independent truckers are undercapitalized and can’t stay current with emissions reduction requirements, then work on getting them better access to capital–don’t try to run them out of business or force them into employee status.

The court agreed, arguing that that the port’s program enabled it to dictate terms between contractors and subcontractors. The NRDC is well-intentioned here:

The Natural Resources Defense Council, which participated in the case on the side of the Port of Los Angeles, expressed a similar concern that without the employee mandate, the sustainability of the clean-truck program over time will be jeopardized. “Absent the employee mandate, motor carriers will force drivers to shoulder the costs, and the environmental benefits will be at risk,” said Melissa Lin Perrella, NRDC staff attorney in Los Angeles.

A worthy concern, but I really do not see how see how requiring them to be employee truckers rather than independent contractors truly helps them. It can make them even more dependent on their current contractors in the move from being subs to employees. Coase applies here. Regulation is a windfall and wipeout game, and if you are going to play, you can just as easily pay to help independent truckers to get brand-new trucks rather than expect them to eat the cost of compliance if the environmental benefits are as large as estimated around the ports–neither of which requires they come into another organization’s umbrella.