Thursday, March 20, 2014

Industry Listens as CARB Reacts

Statewide Truck and Bus Rule Amendments Become Inevitable Reality

It is no secret that thousands of operators in the industry are struggling to survive the harsh regulatory environment that exists here in the Golden State. Until recently, many were speeding headlong into a regulatory brick wall; despite lawsuits, threats of more lawsuits and even outright boycotts, there was little relief and even less sympathy for those in this particularly precarious position.
Fleets of all shapes and sizes are finding themselves in this conundrum. They are spread throughout the state and throughout many different vocations and specialties; these are 3rd and 4th generation companies, mom and pop shops, single truck operators, two man fleets, corporations, partnerships and LLC’s.  Every configuration under the trucking business umbrella has found themselves behind the 8 ball at one point or another over the last 4 years. Suffice it to say, it has not been easy.
Many fleets have handed in the keys; others have just sold their businesses, while others are merely scraping by; making just enough to afford their monthly truck or retrofit payments. Granted, there have been opportunities to help offset upgrade costs from “Uncle Sugar's Goody Sack” in the form of buy downs, grants, and loan assistance programs but, alas, it has fallen well short of the needed capital to become fully compliant, and adding to the conundrum is the fact that not everyone can qualify.

The unfortunate sons who don't qualify for these incentives have had no choice but to go it alone, and now their efforts and hard earned capital expenditures seem all for naught as their businesses hang in the balance, teetering on the whims and fancies of those seeking to save face 4 years after the fact.  
Although the recent changes are being proposed under the mantra of helping the industry, it stops well short of recognizing the investments made by fleets across California. It does little to provide immediate relief to help offset mounting costs and competition from non-compliant carriers.
CARB chairwoman Mary Nichols was recently quoted as saying that, “the industry spoke, and we listened”.  With many barely able to make monthly payments on equipment that was purchased in anticipation of regulatory deadlines, fleets are wondering, “Who was doing the talking?”
The idea of regulatory certainty has been turned on its head, and is now boiling down to, “damned if you did”.
For a fleet who has expended literally MILLIONS of dollars on compliance, or even a single truck guy who spent up to $100,000 on a new (or at least newer) truck, the latest “changes” that CARB is proposing  leave a whole heck of a lot to be desired.  Some provisions are easily accepted; while others need more than a spoonful of sugar to swallow (Click here HERE for Link to CARB Summary), even Mary Poppins herself would reconsider.  
Unless the industry can convince CARB that allowing a 4 year compliance pass through an unenforceable loan denial provision is just bad public policy, the for-hire trucking market in California may collapse under the weight of depressed rates and historic indifference by CARB.

There are provisions that currently exist that allow enforcement discrimination in the event of proven financial hardship. If someone cannot actually secure a loan (and can prove they actually applied), then the CARB Mobile Source Enforcement Division can use their discretion to scale back fines for non-compliance. There is no need to codify this cockamamie loan concept just for the sake of optics.
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