By Fello Logistics
The U.S. Court of Appeals decided on April 9 that it’s legal for California to set its own tailpipe emissions requirements, which essentially mandate that the vast majority of vehicles sold in the state by 2035 will have to be EVs (Electric Vehicles).
A number of trucking industry organizations had fought the move, which was approved by the Environmental Protection Agency in 2022. The EPA’s approval of California’s mandate could still be reversed by the U.S. Supreme Court or by a future presidential administration. But for now, the industry has to get ready for it.
Transport Topics reports:
Under the new rules, truck manufacturers who certify Class 2b-8 chassis or complete vehicles with combustion engines must sell zero-emission trucks as an increasing percentage of their annual California sales starting in 2024. By 2035, zero-emission truck/chassis sales must account for 55% of Class 2b–3 truck sales, 75% of Class 4–8 straight truck sales and 40% of truck tractor sales, according to CARB.
But there’s more. As Commercial Carrier Journal reports, fleets operating in California have to start incorporating more EVs into their fleets quickly:
Starting in 2024, this regulation mandates a broad spectrum of fleets – including those deemed high-priority, drayage, and public fleets – to systematically incorporate ZEVs into their operations.
This regulation represents a crucial step in California’s commitment to a sustainable, zero-emission transportation future, emphasizing the need for businesses to adapt and innovate in response to evolving environmental mandates.
The regulation targets on-road vehicles with a Gross Vehicle Weight Rating (GVWR) greater than 8,500 pounds, off-road yard tractors, and light-duty mail and package delivery vehicles part of fleets with 50 vehicles or more. It applies not just to vehicles registered in California but also to those entering the state from elsewhere, treating them as part of the California fleet for the entirety of the calendar year they operate within the state.
At this point, the industry has to assume these mandates will remain in effect, so we will be keeping a close eye on which of our carrier partners are doing the best job of getting into compliance. EVs present range issues, of course, so when we select a carrier to service one of our shipper clients, our top priority will always be ensuring that the carrier can get the job done.
But there’s no getting around the fact that trucking in California is about to change.
How We’ll Protect Shippers As Carrier Capacity is Dwindling to Reflect Weak Demand
Another story from CCJ says the recent weak demand is starting to result in “fleet revocations,” which is when a fleet suspends its own operating authority – or in some cases, the government revokes it for them.
Based on data from DOT operating authorities, Carter Vieth, research analyst at ACT Research, said that fleet revocations appeared to have peaked in the last quarter of last year and January of this year. “For context, almost 39,000 fleets revocations have occurred since October 2022, and 36% (13,800) occurred between October 2023 and January of this year. Net revocations totaled 1,100 in February, and while one month doesn’t make a trend, we expect numbers to be ‘less bad’ in the coming months,” said Vieth.
In the short term this might not be great news for shippers, because excess carrier capacity tends to mean lower rates. If the carrier market thins out a bit to balance the weaker demand, those who remain would be in a stronger position to negotiate rates. It will have a more immediate effect on the spot market.
Our approach to protecting our shipper clients is simply this: We have solid, established relationships with our carrier network and we prioritize the negotiation of fair rates. They know us and value the relationships they have with us and our shippers. While we know there will be carriers looking to squeeze every penny out of shippers, we prioritize the reliable ones who value long-term relationships and great service.
Fello Logistics is known for integrity, reliability, industry-leading customer service and genuine care for it’s clients. Learn more about our freight shipping services.
