Peter Schneider, President TGS Logistics, Fresno, California says that clean truck rules developed by the California Air Resources Board (CARB) will bar trucks built from 2007 to 2009 accessing the Ports of Los Angeles and Long Beach in 2023.
Schneider said: “The Ports of L.A. and Long Beach are going to be policing this, and when trucks go to the gates at the terminals, they will be blocked if the truck was built during those years.”
Clean Trucks & Zero Emissions
According to a California Air Resources Board fact sheet: “Drayage trucks transporting cargo to and from California’s intermodal seaports and railyards will be a part of a new rulemaking to support the goals toward reducing California’s long-term air quality, climate, and public health impacts. This requires a transition from the conventional combustion technologies to zero-emission everywhere feasible.
Drayage trucks will be included as part of the regulatory package under the Advanced Clean Fleets rulemaking focused on strategies to ensure that the cleanest vehicles are deployed by government, business, and other entities in California to meet their transportation needs.”
- Beginning January 1, 2023, drayage trucks must be compliant with the Truck and Bus Regulation and meet a 2010 or newer model year engine standard.
- Drayage trucks will be required to start transitioning to zero-emission technology beginning in 2024, with full implementation by 2035.”
Schneider says the result could be that “as many as 20% of the current drayage fleet in Los Angeles and Long Beach” will be blocked from accessing container terminals.
One mitigating factor is that “business right now at the two ports is down by about 25%. However, once the ILWU-PMA contract is ratified, at least 10% of the business that has been lost to the East Coast ports will probably come back” but there will still be a shortfall.
CARB also will require that new trucks bought in 2024 onwards need to be zero emission: “A big problem facing the industry after 2024 is tht new trucks can only be zero-emission. This poses a problem because there aren’t that many electric trucks available nationally and many of the trucks that will be available are going to be going to big companies like Pepsi, Walmart and others that have big fleets.”
Also, Schneider says “electric trucks are likely to cost twice as much as diesel trucks so there is going to be a huge burden on the trucking company. TGS is looking to acquire electric trucks and we have been told that there is going to be at least an 18-month waiting time … Also, you need grants to afford the trucks and infrastructure available for charging the trucks.”
California’s AB 5
The California law, Assembly Bill 5, requiring companies to treat owner operator truckers as employees is being addressed: “Many companies are beginning to comply with the provisions of AB5, but the enforcement and specifics still have not been spelled out and it is likely that they wouldn’t be until the courts do so.”
Under AB 5, in order to be considered an independent contractor in the state, a worker must meet the ABC test requirements: A - “The person is free from the control and direction of the hiring entity — both in contract and in fact; B - performs work that is outside the usual course of the hiring entity’s business; C - is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.”
AB 5, which established California’s so-called ABC Test to determine worker classification, took effect on Jan. 1, 2020, but was put on pause due to legal hurdles within the court system. The delay ended after the U.S. Supreme Court denied the California Trucking Association’s petition for a hearing over the law.
Challenges for Exporters
Schneider says California exporters are continuing to face challenges as a result of the global slowdown and particularly in California the inability to ship out of the Port of Oakland due to ocean carrier cutbacks. The result is California agricultural exporters located in Northern California are forced to transport exports through the Ports of Los Angeles and Long Beach at double the rate when going to Oakland: “This could easily double the existing trucking cost for exporters that used to go out of Oakland. I am hopeful that some services will be restored (to the Port of Oakland) but 2023 does not look good at the moment.”
Chassis Shortage Easing
The chassis shortage appears to have gotten much better as a result of “more chassis being available and more companies manufacturing more chassis. There is also less of a reliance on China.”
OSRA (Ocean Shipping Reform Act)
Another bright spot is the new Ocean Shipping Reform Act (OSRA) which is going to be enforced by the Federal Maritime Commission (FMC): “This means that there is going to be a lot more transparency required of the ocean carriers. Issues like availability will become clearer and digitization will be accompanied by standardization of terminology so that there will be less confusion about terms and conditions.”