As if we needed another example of how bad California’s business climate is, a new survey taken last month concluded that the Golden State is the worst state in the nation for the trucking industry (no big surprise). Despite a booming trucking industry nationwide, California suffers due to environmental and labor laws that drive up the costs of fuel and operations and makes it hard to hire drivers. This has also caused an exodus of small carriers, who either have left the state or gave up their trucks altogether.
In particular, the California Air Resources Board’s (CARBs) Statewide Truck and Bus mandates that commercial trucks in the state have a diesel particulate filter (DPF), supposedly to improve air quality, through a regulation that was based on now-discredited research. The trade-winds from China just keep blowing dirty air from coal over to California every day. This has forced trucking businesses to either spend $20,000 to $50,000 to retrofit each truck or fork over even more to buy a new one that meets the regulations. A new truck costs 60% more than it did in 2008.
This is why it is imperative for anyone who is contemplating getting into the truck transportation business to do all of their due diligence and join a transportation association so that they can get as much information as they can. Some people just jump in without realizing that they may have to deal with 17 to 20 different state and federal agencies. It makes as much sense for me to go down to the local CVS pharmacy, buy me a white smock and a stethoscope, and become a heart doctor.
Known (and hated) for its aggressive environmental and transportation policies, California is about to shake up the freight industry again. In a collaboration of the California Department of Transportation, the California Air Resources Board, the California Energy Commission and the Governor’s Office of Business and Economic Development, the state is about to release its Sustainable Freight Action Plan. It aims to transform the state’s freight system by 2050, making it more efficient, connected and advanced, while transitioning to zero-emission technologies.
To meet air quality and climate protection goals, the plan will include an implementation strategy for deploying over 100,000 freight vehicles capable of zero-emission (or near-zero-emission) operation in the next 14 years – yes, by 2030. The Sustainable Freight Action Plan is a first-of-its-kind. Nothing so fully comprehensive for goods movement has ever been tried before. When released, this plan will outline a variety of investment and regulatory paths to accelerate an improved freight system, covering all modes of freight transport, from air to water to land.
Unlike Las Vegas, it pretty much goes without saying that what happens in California doesn’t stay in California. Whatever starts in California typically spreads like a virus across the United States. So, to those of you in the rest of the country, don’t forget I told you so. Bold policies have made California a bellwether. With the largest economy and the largest population of any state in the Union, California motivates other states, and even countries, to examine whether its rules could work for them. California can even influence federal rulemaking. Policymakers everywhere will be watching California’s attempt to restore healthful air quality for millions of its residents, and slashing pollution from the goods movement system is an essential part of that goal.
At the same time, our nation is aggressively trying to reduce greenhouse gas emissions at the federal level, especially from heavy-duty vehicles, to combat global climate change. Heavy-duty vehicles are the fastest-growing segment of U.S. transportation for energy use and emissions. But this all has to be done with one eye on the economy. Freight transportation is a tremendous economic driver, accounting for a third of California’s economy and jobs. To ensure continued economic competitiveness, the state must invest significantly in freight infrastructure and technology.
The opportunities for the private sector to capitalize on the shifts in the freight system created by the state’s action plan are inevitable. Many businesses have already weighed in with ideas to encourage the adoption of advanced technologies that strive to meet the plan’s aggressive goals. Companies such as BYD, UPS, Siemens and American Power Group have submitted innovative pilot projects. Proposals include suggestions for next-generation air transportation systems (including plane-to-plane connected technology), air traffic control support, vehicle-to-grid projects (where electricity from batteries in electric vehicles flows from the vehicle to the electric grid and back), electric truck lanes, and first-mile/last-mile solutions. The plan also has garnered attention from data companies and connected technology providers seeking to improve system efficiency and overall performance.
Four unique fuel technology combinations currently hold the most promise to successfully transform the heavy-duty vehicle transportation sector to near-zero-emissions using low-carbon, non-petroleum fuels. The choices consist of two types of advanced low-natural gas and renewable diesel fuel internal-combustion engines, along with two types of electric-drive systems powered by batteries or hydrogen fuel cells. However, with the essential need to transition to zero-emission and/or near-zero-emission heavy duty vehicles in the near term, they have found only one fuel technology platform is feasible for widespread commercial deployment now – that is near-zero-emission heavy-duty natural gas vehicles, fueled by increasing volumes of ultra-low-emission renewable natural gas.
Over the long term, it is likely that all four of these concepts will contribute to meeting air quality and climate change goals, while also enhancing the state’s economic position. If done right, the Sustainable Freight Action Plan will serve as an important pilot and model for others to emulate, changing the very way freight is handled and thought about worldwide. Let’s just hope it isn’t the proverbial “last nail” in California’s economic coffin.
Like I said before, it is imperative for someone who is contemplating getting into the truck transportation business to do their due diligence and join a transportation association so that they can get as much information as they can – especially in the state of California! For more information about NTA, a nationwide trucking association that offers tons of benefits and discounts to its members, call (562) 279-0557 or visit www.ntassoc.com. Until next month, “Drive Safe – Drive Smart!”
