Moving California Goods: Draft Freight Action Plan Raises Concerns

CalChamber Works to Protect Jobs, Economy During Multi-Agency Process

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Frieght

The California Chamber of Commerce is engaged in a multi-agency process geared toward changing California’s freight system. The results will affect any business that needs to move products or goods within the state and beyond, from retailers to manufacturers, as well as companies involved in freight movement.

Governor Edmund G. Brown Jr. opened the process in July 2015 when he issued an executive order on sustainable freight that called for multiple state agencies to develop an integrated action plan by July 2016 with three objectives:

• improve freight efficiency;

• transition to zero-emission technologies; and

• increase the competitiveness of California’s freight system.

The action plan is intended to cover each part of the freight supply chain, including shipping, ports, trucking, railways, airports and warehousing.

The draft California Sustainable Freight Action Plan was released the first week of May and presented as an informational item on May 10 at the meeting of the California Freight Advisory Committee, of which the CalChamber is a member.

Freight Targets by 2030

The draft plan calls for improving freight system efficiency 25% by increasing the value of goods and services produced from the freight sector relative to the amount of carbon it produces by 2030.

The formula for measuring the system’s efficiency will take into account greenhouse gas emissions from warehousing and storage, plus air, rail, water, truck and pipeline transportation.

In addition, the plan sets a transition to zero-emission technology target: deploy more than 100,000 freight vehicles and equipment capable of zero-emission operation and maximize near zero-emission freight vehicles and equipment powered by renewable energy by 2030.

Economic Growth

More general is the draft plan’s economic growth target: “Foster future economic growth within the freight and goods movement industry by promoting flexibility, efficiency, investment, and best business practices through state policies and programs that create a positive environment for growing freight volumes, while working with industry to lessen immediate potential negative economic impacts.”

No specific economic targets were provided in the draft plan.

Industry Concerns

As competition for freight volume increases, both nationally and internationally, the industry is concerned that a hasty push to zero-efficiency technologies will create massive costs to all industries involved in freight movement and render California less competitive.

Decreasing competiveness will not only reduce jobs, wages and the tax base by driving away freight volume and increasing costs for shipments; it also will counteract the state’s environmental objectives. California has the greenest ports in the nation and perhaps the world. Pushing cargo to the other states and countries that do not have lower-emission infrastructure and equipment may result in an increase in greenhouse gas emissions.

Next Steps

The CalChamber will be submitting comments on the draft action plan. Comments on the draft plan are being accepted through July 6.

Presentations on the draft plan are scheduled at the next meeting of the California Transportation Commission on May 18 and the California Air Resources Board on May 19.

The entire draft action plan can be viewed at casustainablefreight.org.

Staff Contacts: Jeremy Merz, Amy Mmagu

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Jeremy Merz
About Jeremy Merz
Jeremy Merz specialized in workers’ compensation, taxation, privacy, transportation and infrastructure issues while a CalChamber policy advocate from December 2011 through December 2016. He now is vice president, state affairs – western region at the American Insurance Association. Merz came to the CalChamber from Downey Brand, LLP, where he represented private defendants in state and federal courts on business litigation, employment law and workers’ compensation litigation. He earned a B.A. in economics from the University of California at Davis and a J.D. with distinction from the McGeorge School of Law, University of the Pacific, where he served on the editorial board of the McGeorge Law Review.