LONG BEACH, August 25 – The United States could see a major disruption in throughput capacity next January due to a requirement by California that all drayage trucks must have a 2010 model year engine or newer to continue entering the state’s seaports and rail yards.
“Starting January 1st of next year, roughly a third of all the trucks that have access to the ports will not have access to the ports anymore. Essentially, they will become illegal in the state of California,” said Weston LaBar, Head of Strategy for Cargomatic, the logistics technology provider that connects shippers and motor carriers.
LaBar’s comments came during a webinar hosted by the Auto Care Association, which represents businesses that manufacture, distribute and sell motor vehicle parts, accessories, tools, equipment, materials and supplies, and perform vehicle service, maintenance and repair.
Called “Ocean Shipping Now and Looking Forward”, the webinar sought to “better understand” current challenges with ocean shipping and “gain insight” to prepare for what is ahead.
There may be trouble ahead
Besides LaBar, other panelists at the webinar included Dr Noel Hacegaba, Deputy Director of the Port of Long Beach; Peter Tirschwell, Vice President, Maritime, Trade & Supply Chain, S&P Global, Market Intelligence; and moderator Steve Hughes, President & CEO, HCS International.
A loss of 33% of the trucks available to the San Pedro Bay port complex of Los Angeles and Long Beach could have devastating consequences for the nation as well as the region.
The two ports handled 31% of all containerized international seaborne trade in the country, which means that 31% of everything the US imported or exported in containers over the ocean came through the San Pedro Bay port complex: more than 18 million teu in 2021.
Adverse impacts of lost trucking
The impact on the US West Coast could be even greater as the twin San Pedro Bay ports process 74% of the containerized traffic that passes through the region.
According to LaBar, drayage trucks carry more than 70% of the throughput at the San Pedro Bay ports, a figure that equates to some 13 million teu per year.
If the complex loses 33% of its trucking capability, the nation could see more than 4 million teu without transportation: a devastating blow to national and regional supply chain fluidity, with ships and containerized goods backed up all the way across the Pacific Ocean.
California’s environmental requirements for trucks will clearly create problems throughout the country and LaBar called for a national strategy when it comes to creating standards for the trucking industry.
“I think the biggest thing is nationally, we need to have some sort of equilibrium on what the national policy is, because trucks are going in and out of the state,” he said, adding that the federal government and the Environmental Protection Agency need to step in.
“The hope is that long term we can get alignment across the entire nation as it relates to truck standards,” he said.
No let up of cargo in sight
Meanwhile, according to Tirschwell, there is little let up expected in the amount of containerized cargo passing across the docks of the two ports. Indeed, he corrected earlier predictions of a “collapse” in imports, saying “it hasn’t happened at all” with total imports up “nearly 30%” this year over 2019, the year before Covid-19 hit and began to roil supply chains.
He said there has been no indication that spending patterns have reverted to pre-pandemic levels. That means that freight volumes are still “highly elevated” and they are “still putting a great deal of pressure on a system that was not able to flex up to handle the increased demand.”
Hacegaba agreed that a slow-down in freight volumes has yet to occur, with the Port of Long Beach already 5.3% ahead of last year’s record year. Still, he insisted that “at some point this year” the weight of inflation and changes in discretionary spending will “take a toll” on freight volumes.
Pending that decline, LaBar summed up problems for drayage truckers, saying there remain three key issues adversely affecting the industry, including unnecessarily long truck turn times at marine terminals, the inability to use a single truck journey to drop off one shipping container and pick up another, and the unavailability of equipment such as chassis and shipping containers.
“I’ll keep it short and sweet, but you know, those are three of the major points that we deal with,” LaBar told the webinar audience, adding that other matters, such as predictability in container volumes, also are hindering business.
Photo: Without port trucks, boxes pile up and up. © Cargomatic
