IWLA CALIFORNIA CHAPTER UPDATE

IWLA Welcomes FJK Government Affairs as California State Affairs Representative 

IWLA recently tapped Fernandez Jensen Kimmelshue Government Affairs (FJK) as its new California State Affairs Representative. This decision follows an extensive search conducted by IWLA and leaders of the IWLA  California Chapter. 

FJK is uniquely positioned to best advance IWLA’s interests with state legislators, regulators, and the administration in California. FJK’s tenacious, boots-on-the-ground lobbying style and its relentless commitment to clients’ priorities make the firm the ideal choice to actively promote IWLA California priorities and to achieve our legislative goals. 

"We are confident that FJK's expertise and dedication will greatly benefit our advocacy efforts in California," says IWLA President & CEO Jay D. Strother. "The firm’s proactive approach and deep understanding of the state’s legislative realities will help third-party warehouse operators navigate a not-always-business-friendly landscape."

FJK Partners Kirk Kimmelshue and Courtney Jensen will serve as IWLA’s principal points of contact and lead lobbyists. Please join us in welcoming Kirk, Courtney, and the entire FJK team to IWLA. We look forward to a successful partnership as we continue to advance the interests of the warehouse logistics industry in California.  Read Biographies  Learn More About FJK

CALIFORNIA WAREHOUSE ISSUES

PAGA Reformed: Legislation Shows Way Forward For California Employers

After two decades and billions of dollars in penalties, on June 18 California Gov. Gavin Newsom, various labor and business groups, and legislative leadership reached a compromise agreement to reform California's Private Attorneys General Act (PAGA). The two pieces of legislation were proposed on June 21 – AB 2288 amends Labor Code Section 2699 and SB 92 amends Section 2699.3 – and signed into law yesterday. The legislation addresses standing and manageability, caps certain penalties, provides greater ability to cure alleged violations, and offers avenues for early resolution, among other things.

With the legislation passed and signed into law, the PAGA ballot initiative set for the November election will be withdrawn. The amendments will apply, with some exceptions, to civil actions brought on or after June 19, 2024. Although employers can be cautiously optimistic about these PAGA reforms, it remains to be seen how courts will interpret the new law, and whether the reforms do in fact ameliorate the abuses and resultant increase in operating costs for California employers over the last 20 years.

In the meantime, it is important that employers continue to remain vigilant with respect to their wage and hour policies and procedures. Read More Read Even More Read FixPAGA Press Release 

California Regulators Pass Rule to Phase Out Gas-Powered Forklifts

California air regulators approved a first-in-the-nation rule in late June to mandate the phase-out of most gas-powered forklifts despite opposition from industry groups and labor unions. The move is the latest effort from the California Air Resources Board to decrease reliance on fossil fuels as the state attempts to slash emissions 48 percent below 1990 levels by 2030 and reach net-zero emissions by 2045. The rule will ban the purchase of new internal combustion forklifts — excluding rough terrain models — starting in 2026. Older models would be phased out between 2028 and 2038, with small fleets of 25 or fewer forklifts getting more time.

CARB members passed the rule on a unanimous vote after board staff argued that electric forklifts are readily available at a low enough cost to make the transition feasible for California businesses. CARB staff will now ask U.S. EPA to grant a waiver from the Clean Air Act to allow pollution rules stricter than the federal government's. The process can take more than a year to complete; CARB is still waiting on EPA approval for eight other regulations. Read More Read CARB Press Release  

California Congressman Proposes Bill to Tackle Cargo Theft 

A California congressman has the United States’ growing cargo theft problem in his sights. U.S. Rep. David G. Valadao, R-Calif., introduced the Safeguarding our Supply Chains Act, which aims to stop “the rampant theft within our nation’s supply chains.” The American Trucking Association praised Valadao earlier this month for his work leading Homeland Security Investigations to establish a $2 million Supply Chain Fraud and Theft Task Force. The 2025 Department of Homeland Security funding bill directs the task force to work with multiple agencies, such as the FBI, Immigration and Customs Enforcement, and the U.S. Department of Agriculture.

Valadao said he hopes that increased information sharing will bust the thieves. The National Insurance Crime Bureau reports that cargo theft amounts to $15 billion to $30 billion each year. Class I railroad theft jumped from $13.8 million to $33.7 million from 2021 to 2022, Valadao said. CargoNet, a data-sharing system, reported that the first quarter of 2024 saw a 46 percent increase in cargo theft compared to the same period last year. Read More 

California’s Long-Delayed Indoor Heat Rule Approved 

A California workplace safety board last month approved a long-delayed rule requiring most employers to reduce the risks of extreme heat for indoor workers. It applies to all employers except state prisons and local jails, and will particularly protect workers in warehouses, restaurant kitchens, manufacturing plants, and any other indoor workplaces that are not fully air-conditioned. The Occupational Safety and Health Standards Board unanimously approved the rule with little discussion — then urged the Office of Administrative Law to fast-track it so that it can be in effect by August.

Under normal administrative schedules, it will go into effect in October, leaving workers unprotected the rest of the summer. Under the rule, when it is 82 degrees employers will be required to provide cooling areas and monitor workers for signs of heat illness. When it is 87 degrees, or for workers who labor near a heat source or must wear restrictive clothing on the job, businesses must take further measures, including: Cooling the worksite to 82 degrees or lower, if feasible; Adjusting schedules, allowing more breaks, slowing the rate of production, or rotating workers through assignments; And as a last resort, providing protective equipment such as personal fans or cooling vests. Read More Read Even More 

Port of Nevada Opens Inland Intermodal Yard 

The Port of Nevada has partnered with Union Pacific to provide intermodal service to and from the Port of Oakland, according to a June 12 announcement. The inland ramp provides intermodal service between Fernley, which is about 34 miles east of Reno, Nevada, and about 240 miles from the Port of Oakland. The site is expected to help ease truck traffic, reduce carbon emissions and improve inland shipping container distribution. Logistics provider CMA CGM will handle container shipments as the port’s exclusive ocean carrier partner through 2024, according to the announcement.

Services at the inland port include bulk commodity and intermodal transloading and storage of multiple commodities. Nevada officials hope the new intermodal port will lure advanced manufacturing businesses eyeing U.S. expansion. “As a federally designated Tech Hub, focused on onshoring businesses to Nevada, this site is in a prime position to support advanced manufacturing companies that will be expanding to the State,” said Jeff Sutich, executive director of the Northern Nevada Development Authority. Read More Read Press Release 

Virginia Won’t Enforce New California Emissions Rules

Virginia is giving the boot next year to California’s electric vehicle mandates and will no longer be legally obligated to follow “unworkable and out of touch with reality” emissions regulations. Next year, the state will not enforce California’s Advanced Clean Cars I auto emissions standards, as mandated in 2021 by former Gov. Ralph Northam, because those standards expire at the end of December in favor of stricter ones that Virginia officials won’t adopt. Current Gov. Glenn Youngkin announced June 5 the state’s forthcoming freedom from being tied to California’s “out-of-touch” emissions laws.

California’s stricter laws (ACC II) will force 35 percent of new model year 2026 cars to be electric vehicles, with a requirement by 2035 for all new light-duty vehicles bought to be 100 percent EVs. If Virginia legislators had decided to mimic California’s forthcoming emissions requirements, Virginia automakers that sold standard, out-of-compliance vehicles would have been fined “upwards of $20,000 per vehicle sold,” Youngkin’s office stated. As of 2023, only 9 percent of the vehicles sold in Virginia were EVs. Read More 

Cargo Thefts Remained Unusually High in First Quarter

The trucking industry struggled through an unusually high number of cargo thefts during the first quarter of 2024. Verisk Analytics’ CargoNet reported that criminal activities impacting the logistics and transportation industry increased 46 percent year-over-year to 925 incidents and 10 percent from the fourth quarter of 2023. The report estimates that $154.6 million worth of goods was stolen during that period. “What we’re seeing is a new type of crime,” said Keith Lewis, vice president of operations at CargoNet.

Lewis said a new type of crime — document forgery — has emerged. He explained this tactic involves criminals assuming the role of a professional driver to fraudulently secure a load. They then drive the load to its intended destination and partially unload it, and alter the bill of lading to show the complete load was delivered. Lewis noted it’s a much easier type of crime to commit and get away with. CargoNet also found that reported incidents increased in most states during Q1. The most significant spikes were observed in California (72 percent year-over-year increase), Illinois (126 percent) and Texas (22 percent). Small appliances, liquor, energy drinks, and copper were the most targeted, with much of the threat coming from complex fraud schemes. Read More 

17 States Sue to Block California’s Advanced Clean Fleets Rule

A group of states that loosely parallels those that filed suit last year to stop California’s Advanced Clean Trucks (ACT) rule have taken similar action against the state’s Advanced Clean Fleets (ACF) rule, seeking to stop the ACF while it awaits a waiver from the Environmental Protection Agency. A key difference between the suits is the defendant. The action filed in May in U.S. District Court for the Eastern District of California is against Steven Cliff, the executive officer of the California Air Resources Board.

The suit against ACT filed last June was against the EPA, which already had granted California a waiver to implement the Clean Trucks rule. ACT targets manufacturers of trucks; ACF targets companies that buy and drive them. In tandem, the rules aim to achieve a fully zero-emission-vehicle (ZEV) fleet in California by the mid-2040s. The latest suit comes as the implementation of the ACF is already on hold, following a lawsuit filed by the California Trucking Association (CTA) last year. That suit argues that the rule needs the same sort of EPA waiver CARB had been granted to implement the rule allowing the state to impose vehicle and emissions requirements that are stricter than those imposed at the federal level. Read More 

House Republicans Tell Julie Su to Step Down

A group of House Republicans claimed acting Labor Secretary Julie Su is “illegitimate” as leader of the Department of Labor. During a May 1 hearing of the Education and the Workforce Committee, a cadre of lawmakers questioned Su’s capacity to serve in her role and criticized department rules specific to the status of independent contractors. “Today marks the 417th consecutive day in which you have led the Department of Labor as acting secretary without the constitutionally required advice and consent of the Senate. In effectively abrogating the Senate nomination process, the Biden administration has treated the constitution as but a footnote. That is unacceptable,” said committee Chairwoman Virginia Foxx (R-N.C.). “In fact, Ms. Su, you are now the longest serving acting secretary since before the U.S. Civil War — a record that was best left unbroken.”

Rep. Kevin Kiley (R-Calif.), chairman of the Workforce Protections Subcommittee added: “It’s time for you to step down. Let’s do the right thing. It’s time for you to resign...” Kiley is among the congressional Republicans seeking to advance a measure to prevent a Labor Department acting head from serving in that role indefinitely. At the hearing, Kiley also pressed the acting secretary about the Biden administration’s relatively recent rule that reclassifies certain independent contractors as company employees. Congressional Republicans are actively pursuing to pause the rule, citing a potential impact on the freight sector. Read More

Union Pacific Launches Premium Service Between Southern California and Chicago 

Union Pacific’s new intermodal service between Southern California and Metro Chicago promises a three-day transit time, the railroad announced in May. The train runs daily between City of Industry, California, and the railroad’s Global 2 terminal in Northlake, Ill. as of April 28. “We are delivering the service we sold to our customers – and we’re now able to do it faster,” Union Pacific CEO Jim Vena said in a press release. “Our railroad offers 70-mph service, allowing us to compete for business while reducing greenhouse gas emissions up to 75 percent for our customers.”

The railroad’s faster offering is part of its ongoing strategy to capture more over-the-road shipments, said Kenny Rocker, the railroad’s EVP of marketing and sales. The new service also includes faster freight interchanges with other railroads for trains bound for the Ohio Valley and Northeast destinations, according to Union Pacific. Union Pacific’s newest offering is the second daily service the railroad operates between Los Angeles and Chicago. In early April the railroad launched a route connecting Fontana, Calif., to its yard in Northlake, Ill. Read More Read UP Press Release

Court Upholds EPA’s Ability to Grant Environmental Waivers to California

The ability of California to set its own, more stringent environmental and emissions standards — the basis for the state’s Advanced Clean Trucks rule and possibly its Advanced Clean Fleets rule — was upheld earlier this year by the U.S. Court of Appeals for the District of Columbia Circuit. The case, Ohio vs. EPA, had a plethora of plaintiffs, including 16 states besides Ohio and a group of petroleum-focused trade groups such as the American Fuel & Petrochemical Manufacturers and the National Association of Convenience Stores. At issue is a waiver granted to California to implement its Advanced Clean Cars rule. The request was first made to the Environmental Protection Agency in 2005, and April’s court decision reviews the back-and-forth of waiver refusals followed by approvals, depending on which party was in the White House.

The pingpong ball ultimately landed on the waiver being granted by the Biden administration; that led to the filing of the suit in 2022. Ultimately, the court ruled that the states had standing to present a constitutional challenge to the EPA waiver but rejected their argument that the Constitution would not permit a waiver to be granted to a single state. “The federal regulations continue to act as the floor for emissions regulations, but California can seek to enact its own more stringent regulatory program above those federal requirements,” the court said. It noted that there are limitations to what the state can do but said they were not exceeded by California’s Advanced Clean Cars rule. Read More 

FHWA Awards $148M in Grants to Fight Pollution from Trucks at US Ports

The Federal Highway Administration has announced $148 million in grants to combat pollution at the nation’s ports caused by idling trucks. The funding is part of a $400 million program to improve air quality under the Bipartisan Infrastructure Law. The first round of grants provides funding to 11 states and Puerto Rico under the Reduction of Truck Emissions at Port Facilities Grant Program. “The investments we are announcing today will save truck drivers time and money and help ports reduce congestion and emissions, while making the air more breathable for workers and communities,” said U.S. Transportation Secretary Pete Buttigieg in the announcement.

The 16 projects, which aim to reduce pollution in communities near ports, include replacing diesel-powered trucks serving ports with zero- or low-emission electric or alternative fuel-powered trucks, constructing electric vehicle charging infrastructure, improving port roadway access, and studying technology enhancements to reduce truck emissions. California is receiving $49.7 million for port improvements. The Ports of Long Beach, Oakland, and Los Angeles will receive funding to replace diesel- and gas-powered trucks and shuttle buses with zero-emission technologies, electric trucks and EV chargers. Read More Read DOT Press Release