Foreclosure on Wheels: Long Beach’s Truck Program Puts Drivers at High Risk for Default


According to state air regulators, pollution related to the movement of goods prematurely claims the lives of over 3,700 Californians each year, and diesel port trucks are a primary culprit. In an effort to reduce the public health risk and environmental impact of drayage trucks operating at the Ports of Los Angeles and Long Beach, the two ports have passed Clean Trucks Programs which would phase out the use of older, dirtier trucks and replace them with newer, cleaner trucks. The two plans differ in key respects, however. The most important difference between the two plans is that in Los Angeles, the large-scale investment in new equipment will be made by capitalized trucking companies who will employ the drivers. In Long Beach, by contrast, individual truck drivers (predominantly minorities, particularly low-income Latino immigrants) are being asked to make the investment in new trucks. These individual drivers will also bear the responsibility for the proper maintenance of the trucks, fuel and all other associated operational costs, and their status will remain “independent contractors.”

To finance the plan, Long Beach is working with Daimler Truck Finance in setting up a seven-year lease-to-own program. The nature of the financing plan, however, puts Long Beach drivers in a precarious financial position, and places them at high risk for default. In addition to failing to create a sustainable pathway to clean air, the Long Beach plan is structured such that it will wreak havoc on the financial lives of port drivers, their families and their communities.

Even in the best of times, the port trucking industry is characterized by a lack of capital, a lack of assets and low profit margins. Port drivers are low-income workers who historically have not been able to fund investments in technology and assets. The addition of a truck payment (the vast majority of drivers currently own their trucks) will make margins even thinner for drivers.