New trucking firm creates whirlpool of controversy at local ports.

The formation of a new trucking company in Los Angeles is raising the possibility that the entire trucking industry serving the Los Angeles-Long Beach port complex could be turned on its ear. The entry of Transport Maritime Association Inc. into the local market is creating a volatile labor situation which could result in shippers diverting L.A.-bound cargo to other, lower-cost West Coast ports, some sources warned.

The situation has resulted from TMA's recent offer of "employee" status and benefits to local truck drivers, almost all of whom now work for trucking companies as independent contractors.

"We are a labor-leasing facility," said TMA founder Donald Allen, stressing that TMA is not planning to haul any freight itself but plans to provide pre-existing trucking companies with drivers and inspected, insured, TMA-owned trucks. TMA would pay its drivers an hourly wage of $25, nearly $7 per hour more than the current Teamsters Union wage for similar work, informed sources said.

News of TMA's offer has sent local truckers speeding to apply. TMA has already received applications from more than 3,000 of the nearly 7,000 local drivers, and the company is receiving 80 to 100 new inquiries a day, Allen said. No opening date of operation has been fixed, said Allen. In the coming weeks, TMA plans to continue screening applicants and plans to hire at least 1,200 drivers. It is currently looking in the Long Beach area for a headquarters location and a yard to house and maintain a fleet of trucks.

The recorded message on TMA's toll-free recruitment line advises applicants to be patient, because "due to the large response, the processing of applications is taking longer than anticipated."

The drivers are used to being asked to wait. One of their main complaints about their present working situation, under which they are paid by the job rather than by the hour, is the amount of downtime they must spend waiting at terminals to pick up their cargo.

"The real issue lies in expanding the efficiency of the port," said Greg Stefflre, an attorney who represents trucking companies.

Until industry deregulation in the early 1980s, most drivers were hired as employees and belonged to unions. Today, independent drivers are the norm at Los Angeles-Long Beach and other major West Coast ports.

Although the independent drivers are not unionized, Stefflre noted as a point of comparison that the-Teamsters Union wage for similar work is nearly $7 per hour less than TMA's offered wage. He estimated the aggregate cost to a trucking company to lease a driver employed at TMA's wage would have to be between $65 and $100 per hour to cover TMA's other expenses. That would be two to three times the amount trucking companies currently pay independent contractors, Stefflre estimated. Making a direct comparison is difficult because independent contractors are paid per job, rather than per hour, he pointed out.

Stefflre expressed skepticism that TMA would be able to afford to pay its employee drivers the $25 hourly wage, plus benefits, and still compete successfully with independent drivers.

"The only way (TMA's plan) will work is if they monopolize all the drivers," he said. If that happens, and trucking companies' costs rise accordingly, he said, "freight will just go to Seattle, Oakland, San Francisco."

Lost business feared

Mike Johnson, president of the Port Intermodal Operators Association, a local industry group, voiced similar fears of L.A.-area ports possibly losing business to competing West Coast ports, which he said could affect related Southern California businesses, such as storage and wholesalers.

"The driver unrest here is going to cost jobs down here, not just at the harbor," he said. "They don't have the same kind of labor problems in Seattle-Tacoma."

Shippers are always concerned about the ability of the trucking industry to provide reliable services, but trucking companies' concerns notwithstanding, it would take a major labor disruption to send freight elsewhere, asserted Jay Winter, executive secretary of the Steamship Association of Southern California, a Los Angeles-based shipping industry organization.

"Nobody with a warehouse here is going to pay $400 to $500 to truck (cargo) down here" from another port, he said.

Winter also downplayed the possibility that an hourly wage could become the industry standard and lead to higher rates if TMA's plan succeeds.

"I think the market will take care of itself," he said.

Drivers' working conditions were an issue at Los Angeles and Long Beach harbors well before TMA emerged on the scene. A 1993 drivers' strike closed both ports for 10 days.

For about the past year, the Communications Workers of America Local 9400 has been trying to organize the independent drivers and represent them in their contract negotiations with trucking companies. At first, the union's efforts were plagued by drivers' fear of reprisals and terminations by the trucking companies, but at present, more than 6,000 drivers have signed up with the union, said CWA Local 9400 Director Laura Reynolds.

"There's still some fear, but now they feel like they can put our bumper sticker on their trucks," she said.

One independent driver who said he is active in the CWA's organizing efforts seemed to reflect that lingering fear. He would not give more than his first name, and requested that even that not be published. He said he has applied for a job with TMA, but maintains good relations with the Canon company where he now works under contract - "just in case."

"But there's no way we're going to refuse an offer like that," he said of TMA's package.

Below minimum wage

The driver said that - after taxes, insurance, fuel, license fees and other expenses are taken out of his annual gross income of about $50,000 - he is left with less than minimum wage. He complained of long port delays that drastically reduce the number of trips he is able to make each day.

Some of these delays are an unavoidable result of rapid growth in the volume of cargo passing through local ports, said Don Wylie, director of trade and maritime services at the Port of Long Beach.

"Container volume is up 50 percent in the last three years. It's hard to keep up with that kind of growth," said Wylie.

Keeping terminals open longer than an eight-hour working day would not necessarily alleviate the delays. If only a few drivers made night trips, the small volume would not justify the costs of overtime pay or an additional shift of workers to keep a terminal open late, Wylie pointed out.

Despite delays, costs, limited terminal hours, and other problems, there is no shortage of independent drivers willing to undertake the work.

"There's a big oversupply of owner-operator drivers and trucking companies offering...services to Los Angeles-Long Beach harbor. So it's a very cut-throat market," said Winter of the Steamship Association.

The California Trucking Association, an industry group, is closely watching the TMA situation unfold, but has not taken any side.