CARB to Increase Fuel Prices Creates Opposition in CA Warehouse & Distribution Companies

Sacramento, CA: The International Warehouse Logistics Association (IWLA) expressed its strong opposition about actions taken by the California Air Resources Board (CARB). CARB's actions significantly increased the price of diesel fuel in California.

CARB requires that global commodity diesel fuel be included in a single state fuel regulation. This regulation, one that includes diesel fuel for trucks and trains involved in international trade, is an attack on the jobs of blue-collar Californians. This action drastically raises the price of diesel at the retail pump with very little environmental benefit.

According to the study, CARB will raise "California-only" diesel fuel wholesale prices by an additional $2.22 per gallon.

This translates to a retail diesel price increase of 50 percent: $6.69 per gallon of diesel by 2020 – a price that only California companies would bear.

Joel D. Anderson, IWLA president & CEO, says: "This unnecessary and extremely costly fuel formulation directly threatens the livelihood of third-party logistics providers – the warehouses and companies that are our members – whose distribution centers receive goods from the ports of Los Angeles, Long Beach and Oakland. In essence, CARB's message to shippers in the Pacific Rim is to bypass California ports and change course to Seattle and Canada – or plan to use the Panama Canal when it widens in 2014."

The ripple effect in California would be a shift from blue-collar, middle-class jobs in logistics that provide upward mobility and career-advancement opportunities to below-the-poverty-level hotel/motel or food-service jobs. The most recent US Bureau of Labor Statistics data reveal that 170,000 warehouse and transportation workers are employed in California.

When diesel fuel was first added to the states' electric-vehicle-forcing Low Carbon Fuel Standard, IWLA expressed grave concerns. IWLA has attended the hearings, submitted written detailed comments and asked for the organization's economic questions to be answered. To date, IWLA's concerns continue to fall on deaf ears. Despite the facts, CARB maintains the position that the LCFS will cost nothing for the end users.

Mike Williams, IWLA's California governmental affairs representative, testified December 16, 2011, before the California Air Resources Board. "I am here today to ask that you suspend the diesel requirement of the Low Carbon Fuel Standard," he said before the board. "IWLA requests that diesel be removed from the LCFS until such time that a fuel recipe could be tested and an economic analysis completed. It looks like we are half way there. We have the cost. It is too expensive. Testing the fuel is futile as companies will leave the state in droves."

"Now, we have an independent study that looked at retail prices and the results confirmed our suspicions," Williams reported. "California will have diesel fuel reaching almost $7 a gallon. This alone could shut down the supply chains surrounding the ports of Oakland, Long Beach and Los Angeles and restart a completely unnecessary statewide recession."

IWLA president & CEO, Anderson, concurs: "While CARB designs a 'one-state' diesel-fuel emission policy that drives our members out of California, ports outside the state are more than happy and willing to take the business away."

Anderson cited Alberto Zubieta's (the CEO of the Panama Canal Authority) recent comment: "What you need to understand is that you're in a globalized world and if you don't capture the market someone else is going to."

Source: The International Warehouse Logistics Association