Shipping Industry Officials Report ILWU Contract Deal Headed into Final Stretch
According to shipping industry officials, the West Coast Port Union contract talks between the ILWU and the PMA appear to be headed into their final stretch, according to a report by the Wall Street Journal on May 8, 2023. Negotiation details are not made public. However, officials reported that local issues have been resolved and a tentative agreement was reached last month on terms for the use of automation on the docks – one of the most contentious issues at the Ports. That leaves the issue of wages and pensions and the length of the new contract, which expired in July 2022. Shippers have diverted freight from West Coast Ports to Eastern & Gulf Coast Ports during the contract negotiations to avoid potential disruption due to labor actions. According to Jessica Dankert of the Retail Industry Leaders Association (RILA), her members aren’t likely to restore diverted cargo flows until a deal has been voted on by dockworkers, which could take months once negotiators reach an agreement.
CARB Passes Advanced Clean Fleets Rule Mandating Zero-Emissions Trucks
The California Air Resources Board (CARB) approved the Advanced Clean Fleets (ACF) rule on April 28th, 2023 mandating the transition to Zero-Emissions Vehicle (ZEV) trucks in CA by 2042, in a phased-in approach beginning next year.
The previous month the U.S. EPA approved the CA Advanced Clean Truck (ACT) regulation requiring truck manufacturer sales of 40% ZEV Class 8 Tractors by 2035. The ACF regulations passed in April regulate the trucking companies operating in CA. For Class 8 trucks other than drayage carriers, the regulations apply to government fleets and “high priority” fleets (i.e., companies with gross revenues over $50 million or with fleets of 50 trucks or more). For Drayage Carriers transporting containers to/from Ports and Rail Terminals, all drayage trucks must be zero-emissions by 2035. The regulations allow diesel trucks currently in service with 2010 or newer model year engines to remain in service for their useful life (e.g., 800,000 miles or 13-18 years from engine certification). Many trucking Industry groups, including the Harbor Trucking Association and the CA Trucking Association believe the regulations are unrealistic based on the availability and cost of ZEVs and inadequate charging infrastructure. Chris Spear, CEO, American Trucking Associations, stated: “California is setting unrealistic targets and unachievable timelines that will undoubtedly lead to higher prices for the goods and services delivered to the state and fewer options for consumers.” Read more at CARB and HDT TruckingInfo
Mobile Truck Charging Stations Offer Alternative On-Site EV Charging Capability
Mobile Electric Vehicle (EV) Chargers may provide options for companies that lack on-site EV charging stations connected to the electricity grid. Companies such as EnviroCharge, Evansville, IN offer mobile platforms with level 3 DC fast chargers for Class 8 Battery Electric Vehicles such as the Volvo VNR Electric or the Kenworth T680 using liquid propane, compressed natural gas, or diesel. The EnviroCharge EPA Tier 4-compliant, “EV PowerPod” is deployed mounted on a trailer or truck or as a static platform. Mobile EV chargers are useful for companies located in areas where access to the electricity grid is costly or requires extended periods of time or companies which lease their property and want to avoid the installation of a permanent EV charging infrastructure. Read more at FleetOwner and EnviroCharge
CARB Passes In-Use Locomotive Reg. Requiring Zero-Emissions Operations
On April 27th, the California Air Resources Board (CARB) passed a new “in-use locomotive” regulation requiring locomotives to operate in zero-emissions (ZE) configurations while operating in the State. Starting in 2030, only locomotives which are less than 23 years old (year model 2007 and beyond) would be able to operate in the State. Additionally, starting in 2030, passenger locomotives, industrial locomotives, and switch locomotives (e.g., short-line railroads) with engine build dates of 2030 or newer must operate in the State in ZE configuration. For Class I line-haul locomotives (e.g., BNSF, UP), the same requirements apply starting in 2035.
The new regulations are stricter than national standards and therefore would have to be approved by the U.S. EPA to take effect. Railroad industry groups such as the Association of American Railroads (AAR) and the American Short Line & Regional Railroad Assoc. (ASLRRA) were disappointed with the ruling. The AAR stated, “Today, there is no clear path to zero emissions locomotives. Mandating that result ignores the complexity and interconnected nature of railroad operations and the reality of where zero emission locomotive technology and the supporting infrastructure stand.” The ASLRRA stated California short-line railroads provide the first-and-last mile service to rail shippers. The CARB ruling risks Short Line viability in CA. “If some California short lines were eliminated, it would result in higher greenhouse gas emissions nationally, and impact commerce and congestion in CA. Shippers would either need to move their freight by truck instead of rail or pack up and abandon operations in California.” Read more at CARB and Railway Age
California Ports to Adopt Cloud-Based Supply Chain Data System
California Ports agreed to establish a cloud-based supply chain data system to facilitate operational efficiency, resiliency, emissions reduction, and economic competitiveness. California’s five Container Ports: Los Angeles, Long Beach, Oakland, San Diego, and Hueneme signed a Memorandum of Understanding last month to participate in the State’s “California Port Data Partnership” and share a $27 million State grant for the system. The Partnership includes the development of systems that are interoperable with each Port’s system. The Port of Long Beach (POLB) plans to apply the grant to its “Supply Chain Information Highway” system, which is currently being deployed utilizing Amazon to provide cloud computing infrastructure and services and is accessible to stakeholders (Shippers, Ocean Carriers, Terminals, Railroads, Truckers, Warehouses, etc.) for shipment visibility, planning, and scheduling. Mario Cordero, POLB Executive Director stated, “Sharing vital shipping data will reduce delays and aid the entire goods movement industry from docks to doorsteps.” Read more at CA GO-Biz and POLB
Third-Party Logistics Firms Top the List of Big-Box Industrial Leases
Industrial Real Estate Brokerage Firm CBRE, reported last month that for the first time on record in 2022, Third-Party Logistics firms (3PLs) leased more big-box warehouses and distribution centers in North America than any other type of occupant. In North America, 40.8% of lease transactions of big-box facilities (i.e., 200,000 sq ft and greater) were by 3PLs; “General Retail and Wholesalers” had the next highest share with 31.5%. 3PLs’ share of lease activities in Los Angeles County was 53%, whereas the General Retail and Wholesaler share was 35.5%. In the Inland Empire, the 3PLs’ share was 31.8%, with General Retail and Wholesalers’ share at 31.5%.
CBRE stated that despite macroeconomic concerns in 2022, North American big-box industrial facilities saw a record-low vacancy, unprecedented rent growth, and significant new construction – a record 455 million sq. ft. under construction, with 25.3% pre-leased. A total of 374.6 million sq. ft. was leased in 2022, 20% lower than the previous year but 5.5% above 2020. CBRE expects lease transaction volume to decline this year, but double-digit rent growth to remain. Read More at CBRE
Ocean Carriers Reduce Speed off CA Coast to Protect Blue Whales and Blue Skies
Twenty-three Ocean Carriers participated in the “Protecting Blue Whales & Blue Skies” vessel speed reduction program off the Californa Coast in 2022 to contribute to cleaner air, safer whales, and a quieter ocean. The voluntary incentive program sponsored by several of California’s County Air Quality Management Districts and other institutions provides financial prizes for those vessel fleets transiting the CA coast with the greatest distance below 10 knots during May – Dec., which reduces air pollutants and ship whale strikes, of which 52 deaths have been recorded from 2007-2022. Vessel Automatic Identification System data were analyzed for each fleet and participating companies classified by tier. Last year, the top-tier winners included the CSL Group, COSCO, MSC, NYK Ro-Ro, OOCL, Swire Shipping, Wallenius Wilhelmsen, and Yang Ming. OOCL notably achieved a 95% cooperation level in 2022, reducing speeds to 10 knots or less for over 15,000 miles in the California zones. Read More at gCaptain