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Title: P1247676901aOBpN

Patty Senecal International Warehouse
Logistics Association California Government
Affairs psenecal_at_iwla.com www.iwla.com
Los Angeles Transportation Club May 12, 2008
  • Goods Movement Southern California
  • Largest port complex in North America San
    Pedro Bay Port Complex with deep water
  • Largest intermodal rail facility in North
    American BNSF Hobart /710 Fwy.
  • Air Cargo from LAX and Ontario
  • FedEx Oakland hub, UPS Ontario hub
  • Strong capacity for intra and interstate trucks
  • Intermodal trucks 14,500 LA/LB ports, 3,000
  • Warehousing - Southern California is the largest
    industrial sector in the U.s. with 1.5 billion
    sq.ft. of warehouse distribution in our 5 county
    region (LA, Orange, Riverside, San Bernardino,
    Ventura). In the next 6 months in the same 5
    county region there is another 40 million sq.ft.
    of inventory empty building and /or finished
    product coming on-line. Based on historical
    absorption rate of 5 million sq.ft. a year this
    means we could have an 8 year inventory of space.
  • Population growth and 8th largest GDP

  • California Global Warming Solutions Act of 2006
  • Greenhouse Gases (GHG) AB 32 (Nunez and Pavley)
  • California is 12th largest emitter of carbon in
    the world despite leading the nation in energy
    efficiency standards and lead role in protecting
    its environment.
  • AB 32 Established first-in-world regulatory
    and market mechanisms to achieve real,
    quantifiable, cost-effective reductions of GHG
  • California is FIRST state to formally approve a
    comprehensive GHG plan that is required under
    statue and involves every sector of the economy
  • AB 32 requires California Air Resources Board
    (CARB) to
  • Develop regulations to reduce Statewide GHG
    emissions to
  • 2000 levels by 2010
  • 1990 levels by 2020 25 reduction
  • 80 percent by 2050
  • No discrimination goods movement, construction,
    agricultural, cities, school, public agencies

  • The proposed scoping plan was released on
    October 15, 2008 and approved at the CARB Board
    hearing on December 12, 2008
  • The scoping plan contains the main strategies
    California will use to reduce the greenhouse
    gases (GHG)
  • Reduce vehicle miles traveled (land use)
  • Vehicle fuel efficiency (Pavley regulations)
  • Fuel GHG intensity (LCFS) (gasoline diesel)
  • Directs CARB to consider initiating a regulatory
    proceedings to establish and implement the LCFS.
    In response, ARB identified the LCFS as an early
    action item with a regulation to be adopted and
    implemented by 2010.
  • CARB adopted on April 24, 2009
  • The scoping plan has a range of GHG reduction
    actions which include direct regulations,
    alternative compliance mechanisms, monetary and
    non-monetary incentives, voluntary
    actions, market-based mechanisms such as a
    cap-and-trade system, and an AB 32 cost of
    implementation fee regulation to fund the
  • 85 of states emissions are covered in
  • Program developed in conjunction with the Western
    Climate Initiative
  • Clean car standards, increase in
    cleaner/renewable energy, solar, low carbon fuel
  • Under development detailed strategies to
    implement by 2012

Scoping Plan- Key Elements
  • gt Expanding and strengthening existing energy
  • programs as well as building and appliance
  • gt Achieving a statewide 33 renewable fuel mix
  • gt Develop cap/trade that links with western
  • gt Establish regional targets for transportation
    related GHG emissions and pursue policies and
    incentives to achieve targets
  • gt Adopt measures pursuant to existing state
  • Clean Car standards
  • Goods movement measures
  • Low carbon fuel standard
  • Aerodynamic truck retrofits
  • gt Create targeted fees to fund the program

Source California Air Resource Board
Transportation Policy
  • Aggressive Cap Trade System
  • GHG emissions charged to polluter
  • Technologies would have to meet
  • Rigors of the market
  • CO2 engine standards
  • Café standards
  • Ratcheted down caps imposed annually
  • The amount of allowances (permission/permit to
    pollute a tonne) issued will decrease every year.
  • 100 auction will generate billions of dollars
    that we can invest in solar, wind, geothermal and
  • Revenue is produced through an auction where
    there are more polluters than allowances/permits

(No Transcript)
Logistics in a carbon constrained world!
  • As climate change gathers momentum, the responses
    of governments and the markets will all converge
    to fundamentally reshape logistics operations
  • Emissions from freight
  • The direct emissions of logistics are generated
    by the use of fuel in trucks, light commercial
    vehicles, rail, costal shipping, international
    ships and airplanes.
  • Another source of direct freight emissions are
    from air conditioning and refrigeration units
    used in vehicles, warehouses, and distribution
  • Indirect freight emissions include those
    associated with electricity use in warehouses,
    distribution centers and corporate facilities
    such as office buildings.
  • For warehouses, distribution centers, and
    corporate offices this will involve maximizing
    the energy and water efficiency of individual
  • For freight transport this will involve modal
    switching where possible, fuel switching where
    possible, and maximizing the fuel efficiency of
    vehicle fleets
  • Primary production industries will experience
    challenges in the future as a result of climate
    change, water supply and other environmental
    impacts that may lead to changes in production.

(No Transcript)
  • CA CARB On-Road Heavy-Duty Diesel Vehicles
    (In-Use) Regulation
  • Bus and Truck Rule (private fleet rule)
  • http//www.arb.ca.gov/msprog/onrdiesel/onrdiesel.h
  • December 12, 2008, CARB approved a new regulation
    to significantly reduce emissions from existing
    on-road diesel vehicles operating in California.
  • The regulation requires affected trucks and buses
    to meet performance requirements between 2011 and
  • By 12/31/2010 pre 1994 engines must be
    retrofitted with highest PM controls
  • By 1/31/2014 pre 1994 engines must be
    retrofitted with NOx BACT standard
  • By January 1, 2023 all vehicles must have a 2010
    model year engine or equivalent.
  • Affected vehicles include on-road heavy-duty
    diesel fueled vehicles with a gross vehicle
    weight rating (GVWR) greater than 14,000 pounds,
    yard trucks with off-road certified engines, and
    diesel fueled shuttle vehicles of any GVWR.
  • Out-of-state trucks and buses that operate in
    California are also subject to the regulation.
  • Who must comply with the regulation?
  • Any person, business, school district, or federal
    government agency that owns, operates, leases or
    rents affected vehicles. The regulation also
    establishes requirements for any in-state or
    out-of-state motor carrier, California-based
    broker, or any California resident who hires or
    dispatches vehicles subject to the regulation. In
    addition, California sellers of a vehicle subject
    to the regulation would have to disclose the
    regulations potential applicability to buyers of
    the vehicles.

  • When does the regulation take effect?
  • For most fleets, the first performance
    requirements for PM do not begin until
    January 1, 2011,followed by engine replacement
    requirements to reduce NOx emissions starting
    January 1, 2013.
  • For fleets with three or fewer affected vehicles,
    none of the performance requirements begin until
    January 1, 2014.
  • The regulation is phased in such that by January
    1, 2023, all vehicles must have a 2010 model year
    engine or equivalent.
  • Fleet calculator
  • http//www.arb.ca.gov/msprog/onrdiesel/calculators
  • The calculator is an Excel file designed to
    assist fleet owners in determining the yearly
    compliance and to help fleet owners plan for the
    coming years utilizing various compliance options
    available in the regulation.  The updated version
    includes the changes approved by the Board on
    December 12, 2008 and additional proposed

CA CARB Drayage Truck Program (port
rail) Approved 12 -24-2008 http//www.arb.ca.gov
  • This regulation applies to owners and operators
    of on-road diesel-fueled heavy-duty drayage
    trucks operated at California ports and
    intermodal rail yard facilities.
  • This regulation also applies to motor carriers,
    marine or port terminals, intermodal rail
    yards, and rail yard and port authorities.
  • Intermodal Rail Yard is any rail facility owned
    or operated by a Class I railroad where cargo is
    transferred from drayage truck to train or vice
    versa that is within 80 miles of a port or, is
    located more than 80 miles from the nearest port
    and having, on or after January 2008, 100 or more
    average daily drayage truck visits in any one
    calendar month.
  • Intermodal rail yards include, but are not
    limited to, the following facilities Union
    Pacific (UP) Oakland, Burlington Northern Santa
    Fe (BNSF) Hobart, LATC Union Pacific, Commerce
    UP, Richmond BNSF, Commerce Eastern BNSF, ICTF
    UP, San Bernardino, Stockton Intermodal BNSF,
    Lathrop Intermodal UP, and BNSF Oakland.

  • Drayage Truck Program Requirements and
    Compliance Deadlines
  • Drayage trucks subject to this regulation must
    meet the following requirements by the compliance
    deadlines detailed in both Phase 1 and Phase 2.
  • Phase 1 By December 31, 2009, trucks must be
    equipped with
  • (A) 1994 2003 model year engine certified to
    California or federal emission standards and a
    level 3 VDECS for PM emissions or,
  • (B) 2004 or newer model year engine certified to
    California or federal emission standards
  • or,
  • (C) a 1994 or newer model year engine that meets
    or exceeds 2007 model year California or federal
    emission standards.
  • Phase 2 After December 31, 2013, all drayage
    trucks must be equipped with a 1994 or newer
    model year engine that meets or exceeds 2007
    model year California or federal emission
  • All drayage trucks must be registered with the
    DTR by the end of September 2009. Additionally,
    both the DTR registration and truck labels are
    free of charge (labels are optional).

  • 2007 Ports of Los Angeles and Long Beach
  • Clean Truck Program (CTP)
  • Clean Truck Program (CTP) vs. CARB Port Drayage
  • January 1, 2010
  • CARB bans pre-1994 retrofit 1994-2002
  • CTP bans pre-1996 no retrofit requirements for
  • January 1,2020
  • CARB replace 2003-2006 with 2010 trucks
  • CTP no similar requirement
  • http//www.polb.com/environment/cleantrucks/defau
  • http//www.portoflosangeles.org/environment/ctp.a
  • Post 2011 LA/LB port requirements CARB private
    fleet rule?

  • CA CARB Greenhouse gas Emissions From Heavy-Duty
    Vehicles Regulation
  • http//www.arb.ca.gov/regact/2008/ghghdv08/ghghdv0
  • CARB Board approved in December 2008
  • Applicability
  • Long-haul tractors pulling 53 or longer box-type
    trailers 53 or longer
  • Box-type trailers (dry-van and refrigerated-van
    trailers) pulled by long haul tractors
  • Responsible for compliance owner, driver, motor
    carrier, California-based broker, and
    California-based shipper
  • Implementation begins in 2010

  • Exemptions
  • Short-haul tractors trailers
  • 100 mile radius
  • 50,000 miles per year or less (tractors only)
  • Drayage tractors trailers
  • Operate 100 mile radius of port or intermodal
    rail yard
  • Container chassis
  • Drop frame vans
  • Curtain side vans
  • Authorized emergency vehicles

  • Greenhouse gas Emissions From Heavy-Duty Vehicles
  • Reduce GHG emissions from long-haul tractors by
    reducing Tractor trailer aerodynamic drag and
    Tire rolling resistance
  • Tractor aerodynamics Streamlined hood, sleeper
    cab roof fairings, gap fairings, fuel tank
    fairings, aerodynamic bumper and mirrors
  • Trailer aerodynamics Side skirts, front gap
    fairings, rear trailer fairings
  • Low rolling resistance tires Both tractors

Side Skirts
Front Trailer Gap Fairings
  • Tractor Requirements
  • 2011 model year sleeper-cab tractors that are
    SmartWay certified January 1, 2010
  • 2011 model year day-cab tractors that have
    SmartWay verified low rolling resistance tires
  • January 1, 2010 All pre-2011 MY sleeper-cab and
    day-cab tractors have SmartWay verified low
    rolling resistance tires
  • Trailer Requirements
  • 2011 model year 53-foot or longer box-type
    SmartWay certified or
  • Retrofitted with SmartWay technologies
  • Low rolling resistance tires
  • Minimum of 1.5 fuel efficiency improvement
  • Aerodynamic devices
  • Minimum of 5 fuel efficiency improvement for a
    dry van, and
  • Minimum of 4 fuel efficiency improvement for a
    refrigerated van

  • Refrigerated Van and Dry Van Optional Phase-In
    Compliance Schedules- 2010 and Older MY Trailers
    - Refrigerated van 2003-2008 model year
  • Phase-in 2017 2019
  • Other Refrigerated and Dry vans
  • Small fleet 20 or less trailers
  • Phase-in 2013 - 2016
  • Large fleet 21 or more trailers
  • Phase-in 2010 - 2015
  • Early compliance credit

  • Greenhouse gas Emissions From Heavy-Duty Vehicles
  • CARB Enforcement Strategy for California Shippers
    and Brokers
  • California shippers and brokers notified when a
    notice of violation (NOV) has been issued to a
    non-compliant truck transporting their goods
  • Notice Of Violation (NOV) will be issued to
    owner, driver, and motor carrier found in
  • If NOV not settled, and shipper or broker
    continues to use delinquent owner or motor
    carrier, shipper or broker may be subject to NOV
  • Shipper or broker has not taken proactive steps
    working with ARB, owners, and/or motor carriers
    to ensure goods are shipped in compliant tractors
    and trailers, and
  • Shipper continues to load freight onto
    non-compliant trailers owned/dispatched by
    delinquent owners/motor carriers

CA CARB Large Spark Ignition (LSI) Off Road
(gasoline and liquefied petroleum
gas) http//www.arb.ca.gov/msprog/offroad/orspark
/orspark.htm http//www.arb.ca.gov/msprog/offroad/
orspark/background.htm http//www.arb.ca.gov/mspro
  • Large Spark Ignition (LSI) Off Road Rule
  • The regulation established more stringent
    hydrocarbon and oxides of nitrogen emission
    certification standards for engine manufactures.
  • Individual persons, business and government
    agencies that own or operate LSI engine-powered
    fleets in California are subject to the fleet
  • The LIS engines include forklifts, portable
    generators, sweeper /scrubbers, and an array of
    agricultural, construction and general industrial
    equipment. The regulation requires engine and
    retrofit emission control systems.
  • Regulation established feet average emission
    level requirements for medium and large fleets
    that start January 1, 2009 and become more
    stringent with time to January 1, 2010.

  • New Engine Standards and Test Procedures
  • 2.0 g/bhp-hr in 2007 0.6 g/bhp-hr in 2010
  • 95 percent emission reduction vs. uncontrolled
  • Retrofit Kit Verification Procedures
  • Fleet Average Requirements Applicability
  • 4 or more forklifts, tow tractors,
    sweeper/scrubbers, or pieces of airport ground
    support equipment

  • Third-party fleet average calculators
  • Pape Material Handling http//www.papemh.com/car
  • Raymond Handling Solutions http//www.raymondhand
  • Exemptions
  • Construction and farm equipment greater than 175
  • Small fleets
  • Uncontrolled 2003 2004 LSI engines through 2010
  • Exclusions
  • Limited hours of use (250 or less)
  • Rented 30 or fewer calendar days per year
  • Rental or lease less than one year, provided
  • no more than 20 percent of fleet, and
  • meets standards (3.0 in 09 2.0 in 11)

  • Recordkeeping and Reporting Requirements
  • The LSI regulation has no reporting requirement.
  • Operators must maintain records
  • A baseline inventory due November 12, 2007
  • Contents equipment/engine make, model, SN,
    certification or verification level as
    demonstrated by a label
  • Propane fuel quality receipts if available
  • Records retained through December 31, 2015 fuel
    quality records retained for three years.
  • Enforcement Performed by ARB and local air
    districts ARB recently hired additional
    enforcement staff and conducted in conjunction
    with other inspections
  • In-use off-road diesel regulation
  • Cargo handling equipment regulation
  • Other mobile and stationary source regulations
  • Penalty Maximum of 500 per day per piece of

Low Carbon Fuel Standard for California
April 23, 2009 CARB Board adopts regulation to
implement the LCFS. The LCFS is intended to
reduce, on a full-fuel, life-cycle basis, the
carbon intensity of transportation fuels
(gasoline diesel) used in California.
Reformulation starts 2011 finished by 2020
Low Carbon Fuel is complicated life cycle
analysis CARBOB (CA gasoline blend stock), CARFG
(CA reformulated gasoline, ULSD (CA ultra low
sulfur diesel), corn ethanol, sugarcane ethanol
from Brazil, Cellulosic ethanol (farmed trees),
cellulosic ethanol (forest waste), biodiesel
(soybean), renewable diesel (soybean), compressed
natural gas (CNG from North America natural gas),
landfill gas to CNG, electricity(CA mix),
hydrogen (gaseous hydrogen from North American
natural gas)
Western States Petroleum Association
Western States Petroleum Association
Supply and Demand - California
  • California consumes 44 to 45 million gallons of
    gasoline and 10 million gallons of diesel fuel
    per day
  • Demand for transportation fuels increased nearly
    50 in last 20 years
  • Number of refineries producing gasoline in
    California dropped from 32 in mid-1980s to 14
  • California imports 3.5 million gallons of
    gasoline and components per day
  • Transportation fuel infrastructure is at capacity
    and not keeping up with rapidly growing
    population and demand

Source California Energy Commission
CARB next phase! May 21, 2009 CARB public
workshop to discuss T-6 Goods Movement Efficiency
Measures (also referred to as Freight Transport
Efficiency Measures) The purpose of the
workshop is to discuss the development of
measures to reduce the carbon footprint of
freight transport.
  • Intersection of supply chain efficiency and
    carbon footprint
  • Sustainability and green supply chain initiatives
    are rapidly moving to top priority positions at
    many companies. Lack of credit in today economy.
  • Market research firm eyefortransport
    (www.eyefortransport.com) has conducted surveys
    on the greening of transportation and determined
    that this is definitely an area growing in
  • 75 of a company's carbon footprint is related to
    transportation and logistics activities
  • Eyefortransport found that 69 of companies feel
    that green issues will be increasing over the
    next three years, and that 9 of companies feel
    it will be their top priority. Of these
    companies, 42 plan to use vehicle routing and
    optimization tools to help drive green supply
    chain initiatives. This number is sure to grow as
    the issue of greening grows.
  • Does Green Green? Intersection of supply chain
    efficiency to reduce costs and make a company
    more agile and demand driven, it will also help
    green your supply chain. Will operational
    efficiencies safeguard existing margins against
    rising costs but will also reduce the emissions
    intensity of operations.

MeTrIS Maps, Analyses, Models
  • Components of MeTrIS for freight congestion
    mitigation are being developed in a project
    funded by the U.S. Department of
    TransportationResearch and Innovative Technology
    Administration, at the University of California,
    Santa Barbara.
  • Research MeTrIS envisages extensive tracking of
    transportation assets using Global Positioning
    Systems (GPS) and Vehicle-Infrastructure
    Integration (VII) technologies. Vehicles report
    their location and attributes in real time.
    Sensors in infrastructure simultaneously report
    environmental conditions such as bridge ice or
    fog. The rich data stream from these sensors
    enables a variety of synoptic information
    products, both real-time and longitudinal.
  • The system extends beyond what is currently
    deployed by private logistics-oriented tracking
    firms, and focuses on analyses and models that
    employ the data for broad public benefitin
    particular, strategic transportation planning,
    tactical operational efficiencies such as
    intermodal synchronization and identification of
    avoidable trips, and security.
  • MeTrIS technologies promise a future where policy
    and operational decisions are based on reliable
    information and verifiable forecasts, and
    therefore provide solutions that are financially
    sound, logistically efficient, environmentally
    beneficial, and equitable to the communities and
    motor carriers affected.

MeTrIS Maps, Analyses, Models
  • Maps
  • First snapshots of drayage in LA
  • Origins, destinations, routes, stops, time of day
  • Congestion hot spots by time of day
  • Analyses
  • Terminal turn time by time of day
  • Highway speed by time of day
  • Highway drainage (useful to planners)
  • Drivers working hours, idle time Models
  • Deadhead reduction
  • Strategically placed container depots
  • Different operating scenarios
  • Up to 25 reduction in traffic
  • Port sync
  • Give terminals precise information on truck
  • 25-50 reduction in stack rehandling

Interface of smart truck to real-time road way
and distribution center
San Pedro Bay Port Complex
Logistics in a carbon constrained world!
  • . Federal / Waxman legislation Mitigation of
    global warming and protection of individual House
    members who want to protect their own backyard
  • The challenges of managing strong population
    growth, supporting a changing economic base,
    making the shift to a low carbon economy and
    managing the growing freight task itself.
  • Goods Movement / transport companies are
    simultaneously exposed to demand risk, regulatory
    risk, increasing cost structures, operational
    disruptions risk, and broader market risks.
  • The exposure of all freight transport and
    warehousing to increases in both fuel and
    electricity costs will profit margins be eroded?
    More companies or less?
  • The freight business is highly competitive with
    tight margins and a mix of small operators and
    large vertically integrated enterprises. These
    businesses will naturally tend to focus on the
    commercial implications for their own operations
    on particular parts of the network. How can the
    Future of Freight move beyond individual
    interests and provide a balanced plan of action
    in the interests of the freight network and the
    state as a whole?

Cap and Trade 101 Source January 16, 2008
Center for American Progress www.americanprogress.
org/issues/2008/01/capandtrade101.html The goal
To steadily reduce carbon dioxide and other
greenhouse gas emissions economy-wide in a
cost-effective manner.The cap Each
large-scale emitter, or company, will have a
limit on the amount of greenhouse gas that it can
emit. The firm must have an emissions permit
for every ton of carbon dioxide it releases into
the atmosphere. These permits set an enforceable
limit, or cap, on the amount of greenhouse gas
pollution that the company is allowed to emit.
Over time, the limits become stricter, allowing
less and less pollution, until the ultimate
reduction goal is met. This is similar to the cap
and trade program enacted by the Clean Air Act of
1990, which reduced the sulfur emissions that
cause acid rain, and it met the goals at a much
lower cost than industry or government
The trade It will be relatively cheaper or
easier for some companies to reduce their
emissions below their required limit than others.
These more efficient companies, who emit less
than their allowance, can sell their extra
permits to companies that are not able to make
reductions as easily. This creates a system that
guarantees a set level of overall reductions,
while rewarding the most efficient companies and
ensuring that the cap can be met at the lowest
possible cost to the economy.The profits If
the federal government auctions the emissions
permits to the companies required to reduce their
emissions, it would create a large and dependable
revenue stream. These financial resources could
be used to achieve critical public policy
objectives related to climate change mitigation
and economic development. The federal government
can also choose to grandfather allowances to
the polluting firms by handing them out free
based on historic or projected emissions. This
would give the most benefits to those companies
with higher baseline emissions that have
historically done the least to reduce their
What Would a Successful Cap-and-Trade Program
Look Like? The goal To limit the rise in
global temperature to approximately 2.0 degrees
Celsius (3.6 degrees Fahrenheit) above
pre-industrial levels by 2050 by reducing carbon
dioxide and other emissions from companies as
part of a larger plan for curbing global warming.
The cap To achieve this goal, the U.S.
government should steadily tighten the cap until
emissions are reduced to 80 percent below 1990
levels by 2050. Businesses would have to obtain
permits entitling them to emit a certain quantity
of carbon dioxide or its equivalent in other
greenhouse gases. All permits would be
auctioned off by the government. Emissions
permits in the near term would likely fall in the
range of 10 to 15 per metric ton of carbon
dioxide or its equivalent.The trade Companies
unable to meet their emissions quotas could
purchase allowances from other companies that
have acquired more permits than they need to
account for their emissions. The cost of buying
and selling these credits would be determined by
the marketplace, which over time would reduce the
cost of trading the credits as trading becomes
more widespread and efficient.
The profits Initial estimates by the
Congressional Budget Office project that an
economy-wide cap-and-trade program would generate
at least 50 billion per year, but could reach up
to 300 billion. Approximately 10 percent of
this revenue should be allocated to help offset
costs to businesses and shareholders of affected
industries. Of the remaining revenue,
approximately half should be devoted to help
offset any energy price increases for low- and
middle-income Americans that may occur as a
result of the transition to more efficient energy
sources. The other half of the remaining
revenue should be used to invest in renewable
energy, efficiency, low-carbon transportation
technologies, green-collar job training, and the
transition to a low-carbon economy. Some
resources should also be invested in the energy,
environment, and infrastructure sectors in
developing nations to alleviate energy poverty
with low-carbon energy systems and help these
nations adapt to the inevitable effects of global
warming. Revenues from the permit auction would
essentially be recycled back into the economy
to facilitate the transition to an efficient,
low-carbon energy economy and ensure that
consumers are not unduly burdened by potentially
higher energy costs.
Thank You!
Patty Senecal, California Government
Affairs International Warehouse Logistics
Association 310-678-7782 psenecal_at_iwla.com
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