Golden State Meddles

The overwhelming legislative and regulatory interest of the International Warehouse Logistics Association is a harmonized set of efficient, fair and dependable rules and regulations that protect and promote trade. Unfortunately, today’s political realities dictate that conflicting interests and agendas create obstacles to obtaining the seemingly obvious benefits of working together toward achieving this goal.

Consider the California Air Resources Board (CARB): since its inception there has been an aggressive disconnect between its mandates and the quality and quantity of jobs in California. An independent economic study prepared for the California Trucking Association claims that CARB’s regulation will boost “California-only” diesel fuel wholesale prices by an additional $2.22 per gallon. This translates to a retail diesel price increase of 50 percent: $6.69 per gallon of diesel by 2020.

Keep in mind that this is a price that only companies in California will be required to bear. With diesel fuel reaching almost $7 a gallon, this alone could shut down the supply chains surrounding the ports of Oakland, Long Beach and Los Angeles.

What is startling is how CARB and its political enablers among state lawmakers can blithely ignore the enormous negative impact this will have on the state’s role as a logistics gateway, which they appear to erroneously believe cannot be bypassed by Asian shippers. But what is particularly galling is their contempt for California companies that are providing better jobs than industries the state has chosen to favor with incentives.

For example, according to the most recent U.S. Bureau of Labor Statistics, 170,000 warehouse and transportation workers are employed in California. Drawing on the available data, the ultimate effect of the CARB rule is the shift of employment in the state from middle-class jobs in logistics that enjoy an average annual salary of $45,851 to below-the-poverty-level hotel/motel or food-service jobs that have an average annual salary of $16,026.

This unnecessary and extremely costly fuel formulation directly threatens the livelihood of third-party logistics providers whose distribution centers receive goods from the ports of Los Angeles, Long Beach and Oakland. Pacific Rim shippers will look even harder for opportunities to bypass California’s ports, seeking out ports in Seattle and Canada, along with Gulf and East Coast ports once the widened Panama Canal opens in 2014.

On May 14, IWLA asked the leaders of the state Assembly and Senate committees with jurisdiction over this matter to schedule a joint hearing to evaluate competitive issues related to the opening of the Panama Canal and California’s single-state diesel standard.

Our industry is no enemy of environmental progress, as witnessed by the highly successful results voluntary emissions programs adopted by the companies that service California ports. IWLA’s Sustainable Logistics Initiative is another example of our industry’s sincere commitment to this issue.

But this isn’t about one rule; it’s about an attitude and out-of-date ideological outlook.

California officials in matters great and small seem to be intent on waging war on the very sectors that undergird its future prosperity and that have proven to generate the best jobs This has included attempts to ban owner-operator truckers from the Port of Los Angeles at the behest of the Teamsters union and a hands-off approach to the Longshoremen’s Union’s refusal to allow much-need productivity improvements at the ports.

Alberto Zubieta, CEO of the Panama Canal Authority, recently pointed out, “What you need to understand is that you’re in a globalized world and if you don’t capture the market someone else is going to.” Is anyone in California listening? wt

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