THE LONG ARM OF CARB

RB BudgetThe California Air Resources Board (CARB) creates truck engine and emission standards more strict than the US Environmental Protection Agency (EPA) then enforces these standards on every truck serving or entering the state. Interstate truck fleets find it operationally impossible to have only a portion of their fleets compliant with California’s requirements, therefore, the CARB rules become the de facto national standards.
California’s legislature, as part of AB350, was considering mandating a 50% reduction in transportation related fuel usage by 2030.  The California Trucking Association (CTA) and other transportation pundits opposed this portion of the legislation and were successful in having it removed from the law…much to the governor’s displeasure.  The law still has the requirements to extract 50% of the state’s electricity from renewable sources and a 100% increase in the energy efficiency of building

CA GOVENOR DECREES DRAMATIC EMISSION AND FUEL REDUCTIONS

Jerry Brown Introduces January California BudgetCalifornia Governor Jerry Brown issued an executive order mandating the state reduce its greenhouse gas emissions and fuel usage by 50% by 2030. He has tasked the California Air Resources Board (CARB), California Department of Transportation (CalTrans), California Energy Commission (CEC) and the Governor’s Office of Business and Economic Development to collectively “develop an integrated action plan by July 2016 that establishes clear targets to improve freight efficiency, transition to zero-emission technologies, and increase competitiveness of California’s freight system.”

It is expected much of this freight plan will be focused on maritime operations and drayage trucks. Here we go again!
Fact: Trucks serving California’s ports are already required to be the newest and cleanest in the state’s good movement network.
Fact: Container ships calling California’s ports are already required to use ultra-low sulphur fuel and plug into shoreside power while at dock.
Fact: Technology to achieve zero-emission trucks is not yet viable. Electric trucks have an 80-mile radius and fuel cell trucks have a 200-mile radius.

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.

 

Ushering in 2014

Up Close Truck 012We are excited to usher in a new year.  It may sound crazy, but we’re looking forward to another year of changes and challenges as those are things that make logistics fun.

One notable change for 2014:  A significant California Air Resources Board (CARB) drayage truck retirement deadline went into effective January 1, 2014.  In order to serve any of the ocean and rail terminals in the state, one must be driving a model-year engine 2007 or newer truck. 

One notable challenge for 2014:  The contract between the International Longshore and Warehouse Union (ILWU) and the employer group, Pacific Maritime Association (PMA), expires on June 30, 2014.  It is expected jurisdiction will be a key factor in the discussions.  The ILWU sees every job performed at the marine terminals as a job belonging to the ILWU.  We have seen several battles over the jurisdiction of jobs on both coasts over the past year which have resulted in work stoppages and legal action. 

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!

Disruptions, Delays & Drivers

Since the 4th of July holiday, we have experienced a series of labor disruptions and slowdowns in Oakland.  The latest issue was a protest by the Port of Oakland Trucker Association.  The protest lasted two days, October 21st and 22nd, and effectively shut down terminal operations one day and limited operations on the other.  Drivers want additional pay to offset the expense of purchasing a California Air Resources Board (CARB) compliant truck.  Effective January 1, 2014, every truck serving the state’s marine and rail facilities has to be model-year engine 2007 or newer. They are also seeking an extension to the CARB deadline in order to pursue grant and other funding.  The final complaint is terminal inefficiencies.  Drivers are not able to process as many transactions in a day as they need to in order to make a living.  With long queues, extended wait times, container unavailability and chassis chasing, drivers are making half the turns needed.

It’s not as easy as throwing twice the number of drivers at the problem to move the same amount of freight…which is not an option anyway because of the nationwide driver shortage.  Even if we could increase the fleet serving Oakland by 100%, it would only create more congestion, more delays and more disgruntled drivers.