The Year Ahead

By John McLaurin, President, Pacific Merchant Shipping Association

For those in California’s supply chain, the following issues will be discussed, debated and in some cases, litigated in the coming year:

Clean Trucks Fee: The ports of Los Angeles and Long Beach currently

collect a $10 per TEU fee to fund their Clean Trucks Program. The Mayor of Long Beach has proposed doubling the fee – though it is uncertain whether this proposal will go forward. Currently, the ports are having difficulty spending the money they are collecting due to a lack of demand.

TEU Tax: The South Coast Air Quality Management District (SCAQMD) is looking for an author in the California Legislature to impose a $100 per TEU tax on containers that move through the ports of San Diego, Long Beach, Los Angeles, Hueneme and Oakland. It is estimated that it would amount to $1 billion per year to fund unspecified environmental programs.

Indirect Source Rules: The SCAQMD adopted a warehouse indirect source rule (ISR) in 2021. Under such a rule, a facility such as a warehouse is responsible for the air emissions associated with the facility’s operation – whether there is contractual relationship or not with the emissions source. The rule is currently being litigated by the California Trucking Association. Cost of implementation of this rule is estimated at $1 billion per year.

The SCAQMD is moving forward with developing an ISR for new intermodal rail facilities. The concept is to set emission caps on new intermodal rail facilities. Rule development and adoption is expected later this year. Cost of compliance is unknown at this time.

The SCAQMD has begun rulemaking for an ISR for commercial marine ports. Depending on how it is written, the proposed regulation could hold marine terminal operators liable for emissions from trucks, ships, locomotives and tugs.

Advanced Clean Fleets Rule: The California Air Resources Board (CARB) is expected

to approve a rule in which new diesel trucks would be banned from entering service in California ports. Instead, only zero-emission trucks would be permitted to be added to the State Drayage Truck Registry. Final approval of this rule is expected this Spring, with litigation to follow.

At-Berth Regulation: CARB has adopted an amended At Berth Rule. They are currently seeking an authorization from the US EPA, which is needed to finalize and enforce the new rule. PMSA and CARB are currently in discussions about the applicability of the US EPA authorization requirement and retroactivity of rule enforcement.

Harbor Craft Regulation: CARB adopted a rule that requires the repowering or replacement of harbor craft vessels with Tier 3 or Tier 4 engines, as well as zero emission harbor craft in specific applications. Similar to the At Berth Rule amendments, CARB applied late (January 31, 2023) for a US EPA authorization. CARB contends that while the agency cannot currently enforce the rule, CARB reserves the right to retroactively enforce the rule upon receipt of the authorization. The tug industry disagrees.