If Rotterdam can solve the problems, why can’t we?

Advance Business Capital

“New World” in Rotterdam vs. “Old World” in America

In Rotterdam, freight -- Chinese clothing and electronics, American pharmaceuticals, Spanish automobiles -- seamlessly flows on schedule to warehouses, distribution centers, rail yards, and barges surrounding the port. The tightly integrated freight-movement system at the port makes it possible to operate a just-in-time logistics system in which goods arrive at their destination a mere fifteen minutes before they are moved to their next spot on the supply chain. This allows shippers to operate with minimal inventory, a must on a continent where retail shops have minimal space to store goods. Lean logistics means lower interest costs on merchandise, lower insurance costs, less theft, and less need to discount unsold goods. 

In comparison, American ports and their logistics and distribution systems look and feel “old world.” Trucks clog the overwhelmed highways and roads leading to the ports. Thick diesel pollution fouls the air not only in the ports and neighboring communities but also in inland warehouse districts under siege from container trucks and freight trains. Stacks of containers form walls around residential communities. Traffic congestion slows commuting time and wastes fuel. Rates of asthma as well as lung and heart disease are climbing. And just-in-time delivery is impossible in a system where old, worn-out container trucks, without digital communication, spend half their days waiting. 

The Plight of Port Drivers 

Drayage -- the industry segment that carries containers to and from ports, warehouses, and railroad yards -- is one of the most extreme cases of driver exploitation in the U.S. Competition for work is intense. Instead of a computerized system advising a driver to pick up a container at a designated loading dock at a particular time, drivers sit and wait, engines on. Since the drivers bear the costs, there is no incentive for trucking companies to modernize. Freight rates paid to drivers are so low that the median age of the trucks driven by the nation's 70,000 port truckers exceeds 11 years. 

Two Models: Contract Drivers vs. Trucking Employees 

How is this possible when the Environmental Protection Agency adopted diesel engine standards in 2001 that required trucks to meet stringent standards for emissions by 2007? Simple -- the EPA bowed to the reality that the U.S. has chosen a low-road freight transport policy, and ‘grandfathered in’ all used trucks that were on the road when the standards went into effect. 

By contrast, Rotterdam's trucks – indeed, all trucks in Holland – are tested regularly to ensure compliance with strict emission standards. Nearly all the trucks working in Rotterdam's just-in-time logistics system are owned by trucking companies that employ their drivers, and all the trucks are less than five years old. 

Environmental Impact: Pollution 

The American system, which is largely one of default rather than intention, has an impact beyond the burden it places on port drivers. Air quality–related health issues have become a major concern to those who live and work at our nation’s ports. Many of these issues are directly related to diesel exhaust from trucks, cargo equipment, ships, and trains – a high percentage of which are old and dirty and are concentrated in areas near freeways, port terminals, and rail yards.

 Diesel engines emit a toxic brew of particulate matter (DPM), smog-forming nitrogen oxides (NOX), and volatile organic compounds. Diesel exhaust can also contain an estimated total of 450 different chemicals, about 40 of which are toxic air contaminants with serious effects on health and the environment. 

Diesel exhaust is a well-known human carcinogen, estimated to be responsible for 70% of the total cancer risk from air pollution. The incidence of lung cancer alone is 40% higher for port workers than in the population at large. In fact, a recent study of the U.S. trucking industry found among port drivers an excess risk of death due to lung cancer and ischemic heart disease. 

Environmental Impact: Health 

Numerous studies have documented a wide range of other adverse health problems from long-term exposure to fine particulate matter, a major component of diesel exhaust. These include increased risk for cardiovascular disease such as atherosclerosis, increased heart attacks and strokes. For pregnant women, the risks are especially pronounced, including such complications as birth defects, low birth weights, premature births and increased infant mortality. 

A recent California Air Resources Board (CARB) report quantified some of the health impacts caused by diesel exhaust from freight transport in California; it found: 

• 2,400 premature deaths
• 2,830 hospital admissions
• 360,000 missed workdays
• 1,100,000 missed days of school in 2005. 

The EPA estimates that some 87 million Americans now live and work in port regions that violate federal air quality standards. In these areas, diesel soot-induced asthma, cancer, and respiratory illnesses rates are disproportionately high. 

How We Got There 

This situation didn’t happen overnight and ironically we got there through the efforts of some of the most progressive politicians and groups in the United States. The port mess is the result of trucking deregulation, a policy first set in motion in the late 1970s, under the Carter administration. At the time, it was seen as a step that would ultimately benefit business, labor and consumers. 

The move to deregulate trucking gathered steam in 1980. The newly-elected Reagan administration claimed it as one of its election mandates. The intent was to eliminate onerous and unnecessary regulation, or as Ronald Reagan articulated it, “getting government off the backs of the American people.” In response, Congress began dismantling the century-old Interstate Commerce Commission (ICC), a process that lasted into the mid-eighties. 

Promise and Reality 

Both industry and labor supported deregulation. Its advocates ranged from conservative business groups to liberal lights like Ralph Nader and Ted Kennedy. A consensus prediction was that deregulation would bring robust market competition, lower rates, and economic growth. 

Instead, many agree the industry wound up with a system that serves no one satisfactorily. It has shifted business costs onto the public and onto truck drivers, discourages private investment in innovation and new technology, and forces trucking companies into competing by illegal practices, such as carrying overweight containers, or depriving drivers of fuel surcharges. 

The question before policy-makers now is: what can we do? How can we remake the present situation with its jerry-rigged labor policies, worsening environmental cost and sheer inefficiency into something more like Rotterdam? 

Next Month – Solutions 

Next month, in the fourth and final chapter of our examination of the “drayage dilemma,” we’ll look into possible solutions and appraise programs already in place. 

Sources for this article include The Big Rig: Sharecropping on Wheels, PortTrucker.com, TruckersNews, Los Angeles Times and PR Newswire

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