The U.S. harbor trucking industry is facing major challenges due to declines in imports and exports during 2023 while at the same time costs are on the rise, says Impact Transportation President and CEO Ron Cancilla.
The Oakland California-based Impact Transportation transports imports and exports on a 50% to 50% basis.
Cancilla also noted that declines of U.S. agricultural exports are impacted by a late harvest: “It's not only the harvest, it's a lot of case goods, bottled goods, beverages, wines, everything is down … I would say down at least 20%.”
Cal West Acquisition
Impact Transportation recently announced that it had acquired Cal West Express based in Rancho Dominguez, California. The company was focused on drayage operations in Southern California. The company was a 36-year-old company that had been impacted by higher rental costs, operating with facilities composing 90,000 square feet on six acres.
In an interview with AJOT, Cancilla said that Impact Transportation was established in 2004 by himself. Then, four people worked with the firm that number has now risen to 56 people: “We started off as a drayage company in the Port of Oakland. And almost immediately we noticed the need for transloading and warehousing and some different over dimensional projects and things of that nature. We went on a mission to diversify and today we are probably one of the most diversified operations …in the Port of Oakland … We're trying to do this in Southern California … A few years back, I acquired a company called Commercial Cartage. Like Cal West they were a very old company that had been around for a while … They didn't really have a succession plan. We took it over and we started very similar to what we did in Oakland. We just focused on drayage, and then we started dialing a little bit into transloading.”
Impact is finding this strategy is working for them in 2023: “That's what we have done over the years. And … we're diversified. We're making ends meet, but we're not … making tons of money … either.”
California’s New Clean Truck Rules
He says that in California, new clean truck rules instituted by the California Air Resources Board (CARB) are compounding the challenges for truckers: “In our industry, those costs have continued to climb and continue even more with the ACT program with CARB and AB5 (the California law regulating owner operator truckers). A lot of us have started switching over to the company ... driver model ... It's really hurting people.”
California’s Advanced Clean Trucks (ACT) rule requires fleets to adopt an increasing percentage of zero-emissions vehicles (ZEVs) such as battery electric, long-range plug-in electric hybrids, and hydrogen fuel cell … trucks. Compliance requirements differ based on truck type and use.
Cancilla explains the impact: “Well, it's basically put a timestamp on everybody's equipment … We have to register the trucks by the end of this year. And then you get 13 years from the manufacturing date or 800,000 miles and then those trucks have to be replaced with zero emission. So, a lot of us have started buying new trucks, which are double the price that they were pre-COVID. The operating costs also doubled … The current market rates … are not sustainable with that equipment.”
Overall, Cancilla says, “It has been a tough year for everybody. And there’s no end in sight … Our costs are continuing to climb, and our customers are continuing to push for reductions … I suspect you'll see a lot more acquisitions, a lot more closures and a lot more people moving out of State.”
