FROM THE DRIVER’S SEAT

11Surprise CARB Inspections

In an effort to crack down on trucks which are not in compliance with state’s emissions and diesel particulate filter standards, the California Air Resources Board (CARB) set up a surprise inspection station on Highway 99 in Fresno. They cited nine trucks for violations. The fines range from $300 to $1000/month depending upon the infraction.

Devine runs a fleet of trucks CARB-compliant through 2021 and beyond.

FROM THE DRIVER’S SEAT

CAP-AND-TRADE AND FUEL PRICES AND YOU

applyCome January 1, 2015 expect fuel prices in California to rise by $0.15/ gallon, and therefore the price of everything else you consume will increase as well.

Why, you ask? Because that’s when California’s cap-and-trade regulations take effect. Fuel refiners will have to buy credits (i.e., pay a tax) to off-set their emissions. The total “tax” to be paid by the oil companies is expected to be $3.6B/year. They will, of course, increase their prices to the distributors, who will increase their prices to retailers, who will increase their prices to consumers.

Why doesn’t California source its fuel from other states, you ask? Because California has a special formula of fuel that is only required in this state. It is not cost effective for producers in other states to reconfigure their lines to refine our boutique brand of gas and diesel and then ship into the state.

How is the money collected via the cap-and-trade tax going to be spent, you ask? The state expects to collect $9B/year in taxes and have earmarked 20% of that amount to subsidize a high speed rail project.

FROM THE DRIVER’S SEAT

applyCARB Considering Zero Emission Standards

With the largest threshold of requiring 2007 or newer trucks behind the drayage truck industry, we need to be looking ahead. The next deadline is January 2023 which currently requires the use of 2010 or newer trucks to service California’s ocean and rail terminals. However, there is a big push for the state to move towards zero emission heavy-duty trucks. Alternative fuels, hybrids and fuel cells are the technologies that rank at the top of the list. The challenge is not putting the cart before the horse. These technologies have to be developed and their success ensured before regulations for their use can be written and implemented.

THE STATE OF THE NORTHERN CALIFORNIA DRAYAGE MARKET

Fwy w Rolling Hills 016Yesterday, three drivers walked into our office, laid their keys on the desk and quit. They cite the lack of productivity at the marine terminals in Oakland as the reason. They can no longer make a living.

A driver used to be able to consistently make two turns between the Central Valley and Oakland. That is no longer the case. Terminal turn times coupled with abbreviated operating hours have significantly cut into driver productivity and, therefore, earnings.

There was a time in the not-so-distant past when there were eight smaller marine terminals in Oakland and volumes were dispersed more evenly among those terminals. If one terminal experienced congestion, motor carriers could more easily adjust their operations to avoid that terminal on that day. Now there are five terminals, with two taking the lion’s share of the volume. There is no way to avoid the congestion…the lines…the loss of income…the frustration.

We understand the rationale for the recent terminal mergers and closures. Small operations lack the density required to be profitable. However, the result is the financial burden has now shifted to the driver. Such a shift is neither sustainable nor acceptable.

Drivers’ incomes are a factor of their base pay and the number of transactions they conduct in a day. In order to make a living, if the number of transactions decrease, the pay per transaction needs to increase.

With the nationwide shortage of truck drivers, these guys and gals have options. National and regional truckload/LTL/flatbed carriers are more than eager to snap up discontented drayage drivers. Why not? These drivers have experience, good driving records and know their way around the geography. It’s a slam-dunk for them. But, a major setback for the logistics community in Northern California.

We cannot afford to lose more drivers. As a result of the California Air Resources Board (CARB) truck retirement schedules, we experienced a reduction in drayage truck capacity in Oakland of 20-25% in January 2013 and another 20-25% in January 2014. Terminal inefficiencies and reduced hours of operation do not allow for the proverbial “doing more with less.” Quite the contrary, we are doing considerably less with less. Drivers are making considerably less and, as we witnessed yesterday, leaving the industry as a result.

Drivers can no longer be expected to shoulder the costs of inefficiencies and inelasticity in the supply chain. The system, as it currently stands, is broken. Clearly, throwing more drivers into the mix is not going to solve the problem. Paying the drivers more is not going to solve the problem. Improving operations with more gates, more hours, more yard equipment, more grey chassis pools, more man-hours and more money is what is needed to solve the problem.

 

Keeping up with CARB

2014 Trucks New 004Since the California Air Resources Board (CARB) first announced its truck retirement schedule back in 2007, we have been hard at work ensuring our compliance with each January’s deadline.  Back in 2010, when the first deadline clicked by, Devine Intermodal had a fleet of new trucks on the road.  Since then, we have replaced a handful of trucks every year to comply with the requirements.  2014 is no exception.  We brought on-line a couple dozen brand new trucks with the latest in clean air technology.  Aren’t they beautiful!