It's not unusual for shippers and carriers to oppose laws and regulations they believe will be harmful to their businesses. In fact, it happens regularly in California, where municipal and state legislators often target the transportation industry with environmental initiatives.
But now a different scenario is playing out around the Southern California ports of Los Angeles and Long Beach. Instead of simply opposing a costly anti-pollution program that could leave the ports without enough drayage drivers, some shippers and carriers have decided to become part of the solution.
At issue is the proposed Clean Truck Program (CTP), which is included in the San Pedro Bay Ports Clean Air Action Plan (CAAP). CTP aims to reduce truck-generated pollution at the ports by 80 percent over five years by phasing out all "dirty" diesel trucks and replacing them with 2007 low-emissions tractors or post-1994 retrofitted vehicles. The program, which would cost an estimated $1.8 billion, would be funded partly by government- and port-financed grants and state-issued bonds. The shortfall would be made up by a carrierpaid "truck impact fee" that could run as high as $54 per inbound gate move. The ports are also proposing a $26 "infrastructure and environmental cargo fee" per 20-foot container, to be paid by the beneficial owner of the cargo.
Much of that money would go to help motor carriers and owner-operators pay for new equipment. But the offer comes with strings—actually, tags—attached: Trucks purchased or retrofitted with those grants must be used only for port drayage for five years. The ports plan to rely on RFID tags and vehicle locator technology to monitor compliance.
The truck-replacement program also mandates that all drayage drivers must be employees of port-approved motor carriers and that all vehicles must be owned, maintained, and operated by those carriers. Some observers predict that, if approved, the mandate will wreak economic havoc on Southern California's drayage industry.
Critics take aim
Critics of the proposal say it has at least two serious flaws. For starters, the vast majority of the drayage drivers in LA/Long Beach are owneroperators who pick up and deliver containers either as independents or as contractors for local trucking companies. Few can afford to pay or borrow $50,000-plus for a new tractor or $15,000 to retrofit their current vehicle. Many of the motor carriers that employ them, moreover, are small family-owned businesses and are unlikely to have enough cash or credit to replace or retrofit the 16,000 trucks that serve the two ports.
Another problem is that drayage drivers are likely to balk at giving up their independence. At the recent Coalition of New England Companies for Trade (CONECT) Northeast Cargo Symposium, Dr. John Husing, an economist hired by the ports to assess the plan's impact, said that the number of drivers who told researchers they would go elsewhere if forced to become full-time employees is "enough to cause a supply chain disruption."
The proposed grant system won't cover the cost of all those vehicle purchases and upgrades, and the potential loss of drayage drivers at ports that handle 40 percent of the nation's containerized trade could be economically devastating, said panelist Peter Keller, president and CEO of NYK Line North America. Instead, Keller outlined an alternative approach to reducing air pollution that wouldn't put drivers in financial jeopardy or force a change in the drayage system.
What Keller is pushing is a plan developed by the Coalition for Responsible Transportation, a grassroots group launched by NYK, Target Corp., and trucking company Total Transportation Services Inc. The group wants to help owner-operators upgrade their vehicles by creating a "lease to buy" program for independent drivers who contract with port-approved motor carriers. Carriers would make the down payment on new or retrofitted trucks, treating it as a loan to the driver. The loan would be reduced by a certain percentage each year that the driver remains under contract and could eventually be forgiven entirely.
The coalition's plan would be funded by public grants and by contributions from shippers, ocean carriers, and trucking companies. Fees paid by shippers would also go toward raising drivers' pay.Why would shippers and carriers want to pay into the pot? Not only is it in their interest to prevent work-force disruptions, said Keller, but it also is an opportunity to take responsibility for reducing the dangerously high pollution levels caused by their own operations. That argument clearly has resonated: At press time, Nike had signed on to the program, and Keller said he expected most of the top 10 U.S. importers and their carriers to follow Nike's lead before the end of November.
Strange bedfellows
The California truck-replacement program has sparked some interesting side dramas. One is the unexpected alliance between the Teamsters Union and groups like the National Resources Defense Council. According to Husing, these strange bedfellows have agreed to push each other's agendas in exchange for support of the clean air program, which explains how labor issues found their way into an anti-pollution initiative.He also charged that the union and the environmentalists are looking to gain more control over the import supply chain so they can pressure big retailers on their respective concerns.
Meanwhile, the American Trucking Associations (ATA) contends that the Clean Truck Program is illegal on two counts. First, the plan violates a federal law prohibiting state laws from governing motor carriers' prices, routes, or services, said Curtis Whalen, executive director of the ATA's Intermodal Motor Carriers Conference, who spoke on the same panel. It also violates a provision in the Shipping Act of 1984 that prohibits unreasonable or discriminatory practices by a marine terminal operator, said Whalen. "If the ports actually implement this plan," he added, "ATA will litigate."
Whether the truck-replacement program moves ahead in some form or is struck down on legal grounds, Keller said, the international trade community needs to take action sooner rather than later—and not just on the West Coast. "This is an issue that will move from Southern California to Northern California to New Jersey and Massachusetts very, very quickly," he warned. "This is an issue that is going to bother everyone very soon."
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Two European companies are among the most recent firms to put autonomous last-mile delivery to the test with a project in Bern, Switzerland, that debuted this month.
Swiss transportation and logistics company Planzer has teamed up with fellow Swiss firm Loxo, which develops autonomous driving software solutions, for a two-year pilot project in which a Loxo-equipped, Planzer parcel delivery van will handle last-mile logistics in Bern’s city center.
The project coincides with Swiss regulations on autonomous driving that are expected to take effect next spring.
Referred to as “Planzer–Dynamic Micro-Hub w LOXO,” the project aims to address both sustainability issues and traffic congestion in urban areas.
The delivery vehicle, a Volkswagen ID. Buzz battery-electric minivan, will feature Loxo’s Level 4 Digital Driver navigation software, a highly automated solution that allows driverless operation. The van was retrofitted to include space for two swap boxes for parcel storage.
During the two-year pilot phase, Loxo’s Digital Driver will navigate a commercial vehicle several times a day from Planzer’s railway center to various logistics points in Bern's city center. There, the parcels will be reloaded onto small electric vehicles and delivered to end customers by Planzer’s parcel delivery staff.
Following the completion of the pilot phase, Planzer and Loxo will build on the program for rollout in other Swiss cities, the companies said.
The partners said the project addresses the increasing requirements of urban supply chains and aims to ensure the “scalability of their disruptive solution.” With largely emission-free delivery, it contributes to greater levels of sustainability for the city as a living space, they also said.
“The uniqueness of this project lies in the fact that it will have a direct impact on society,” Planzer’s CEO and Chairman Nils Planzer said in a statement announcing the project. “We didn't just want to integrate automated technology into existing systems, we wanted to develop a completely new concept and a new business model.”
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.