Thursday, March 6, 2014

Anticipation Grips the Industry

CARB Releases Major Changes to Truck and Bus Rule

Over the past several months there has been a groundswell of concern over recent efforts by CARB to provide proposed relief to an industry struggling to survive in the demanding regulatory environment that exists here in California. In part, the proposed relief is a response to mounting criticisms (and lawsuits) over how the truck and bus rule is impacting fleets of all sizes, all over the state in all types of vocations. The proposed changes were inevitable, and in many regards completely necessary. Nevertheless, how they will be interpreted is an entirely different story altogether.
The proposed changes do clear up some inconsistencies in the regulation and serve to close the loop on the "Good Faith Extension", but most of all, the relief is targeted to the many fleets who have either ignored or struggled to achieve compliance as of late, with little immediate relief to those who have already shelled out tens of thousands, if not millions of hard earned currency towards compliance since the regulation went into effect leading up to 2012.
Of great interest is how industry will respond to the proposed changes and how the available material will be used to build or break down a case for the changes. By law, CARB is required to release all pertinent data used to justify the regulation, it does stop short of allowing the public to duplicate their findings without PRA requests or potential litigation, but,  it is however an insightful treasure trove of data into how the changes are being justified.
The data contains inventory and cost estimates, sales forecasts and emission penalties and benefits along with fleet size data and estimates of the various compliance exemptions that are being utilized.  While the data does not cover the greater economic impacts of allowing regulatory passes for a specific subset of the industry, it does cover why they think it is necessary to do so. This specific industry subset consists of fleets with three or fewer vehicles over 14,000 GVWR and has been the subject of much controversy since the original exemption was proposed in 2010.

According to one provision in the proposal, if you have three or fewer trucks in this category, there is a possibility you will have a pass on your entire fleet until 2018, provided you qualify for the provision and more importantly if this particular provision makes it past the April 24th, 2014 CARB Hearing in Sacramento.
CARB staff has already prepared for a 15-day change notice to be released after the hearing, knowing full well that whatever is proposed before the Board in April will require additional changes since this proposal in its current form is really more of an exercise about what will stick against the wall as opposed to full recognition of the issues plaguing the industry.  
Granted, CARB on-road truck and bus staff should be commended for their diligence in releasing the proposed changes in a timely fashion. Nevertheless, there are major industry concerns that, on the one hand, the changes do not go far enough, while on the other hand, some changes go way past the mark and some may even be susceptible to fraud or other extra judicial activities. The playing field is being tipped; and in fact, what CARB is doing may be perceived as market interference by some, while others will cite CARB's complete obliviousness to the competitive forces driving the freight market in California.  

What cannot be denied is that millions of dollars have been invested in clean equipment upgrades over the last 3 years. Many in the industry have and are still competing against those who consciously chose to skirt the requirements; referred to in many circles as "scallywags" or "bottom feeders".  While many others in the industry just can’t afford it, CARB is lumping the two groups together, with little mechanism or attention dedicated to differentiating between the two.  From this it would seem that relief is in the eye of the beholder, but, time will only tell.

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