Remember when Cho Bai Den said he was going to solve the California supply chain issue and then moved quickly to get the trucks rolling to help clear the ports? Me either.
https://www.zerohedge.com/economics...lmed-looming-carb-rule-supply-chain-obstacles
Oakland Truckers Overwhelmed By Looming CARB Rule, Supply Chain Obstacles
BY TYLER DURDEN
SATURDAY, FEB 12, 2022 - 04:00 PM
By Clarissa Hawes of Freight Waves
Besides the daily challenges drayage truckers face to keep their small businesses afloat at the Port of Oakland, some are questioning whether they still will be operating this time next year. That’s because of an emissions rule in California that is requiring them to upgrade their trucks to include 2010 model year or newer diesel engines by the end of the year.
Bill Aboudi, president of AB Trucking in Oakland, planned to upgrade his aging fleet by replacing half of his trucks this spring and the remainder in the fall to comply with the California Air Resources Board (CARB) Truck and Bus rule deadline of Dec. 31.
Those plans are on hold for now, Aboudi said, as used truck prices continue to soar because of semiconductor shortages, which have caused larger fleets to hold on to their old equipment longer because of new truck order delays. He and other drayage companies typically buy their used trucks from over-the-road fleets, which are typically on a three-year depreciation schedule.
“I get asked about a possible CARB extension every single day by owner-operators,” Aboudi told FreightWaves. “CARB is creating uncertainty if they will be able to earn a living next year.”
The CARB rule covers all diesel vehicles with a manufacturer’s gross vehicle weight rating greater than 14,000 pounds.
Lynda Lambert, public information officer for CARB, said there is a provision in the Truck and Bus rule for new truck buyers who are experiencing manufacturer delays, but there’s no extension for California truckers who planned to buy used trucks but either can’t find one or can’t afford one because of supply constraints.
J.D. Power Valuation Services reported that used truck pricing in calendar year 2021 soared over 96% higher than in 2020 because of the chip import issues, which have drastically impacted the new truck market.
A new truck can have up to 35 chips that are used to collect data.
Prior to these challenges, Aboudi said, he would typically be able to find a used 2011 to 2016 model year truck for between $30,000 and $50,000 for his drayage operation. But not now.
He recently looked at a late-model truck with over 500,000 miles. The dealership was asking nearly $130,000, his initial budget to purchase three trucks.
Joe Rajkovacz, director of governmental affairs for the Western States Trucking Association, headquartered in Upland, California, estimates that over 40,000 trucks will be affected by the CARB rule based on the government agency’s data.
He said WSTA is talking with other trade groups about submitting “a unified request for a delay in the CARB rule.”
“If people think there’s a supply chain issue right now, imagine taking that many trucks out of service that can’t be replaced because of the computer chip shortage,” Rajkovacz told FreightWaves. “We believe a delay is warranted because of significant supply chain issues such as the inability to get a new truck or even buy a compliant used truck.”
One owner-operator in California made the decision to retire after he received an offer he couldn’t refuse for his late-model truck, which had around 400,000 miles.
“I planned to stay in trucking for another year or two and my truck wasn’t even for sale, but a guy offered me nearly triple what it would typically go for in a normal year,” the driver, who didn’t want to be named, told FreightWaves. “I’ve been at this a long time and my truck was paid off so I weighed hanging in there a little longer and possibly having a major mechanical problem, or getting out with a little money in my pocket. I took the money.”
Two owner-operators Aboudi knew in Oakland retired this year rather than continue hunting for trucks in an already tight used market. He said some drivers with trucks that meet CARB’s 2007 diesel engine requirement want an extension. This would give drayage haulers time to fix their current equipment and let the used truck market cool down.
“Port truckers are under a lot of stress already and we need an extension to the CARB rule by a year or two to let prices of trucks drop a little and we can rest a little easier,” Aboudi said. “If not, some aren’t going to be able to stay in business because they just can’t afford to buy used trucks at these prices.”