As the new year begins, the supply chain community has plenty on its mind. There are large unknowns, like how exactly the next administration will affect trucking regulations and trade policies and how, in turn, that might affect drayage carriers.
At the latest Southern California Supply Chain Meetup, panelists discussed some of the biggest question marks for this year regarding drayage and logistics.
Colin Campbell, senior reporter at Trucking Dive, moderated the discussion, featuring Matt Schrap, CEO of the Harbor Trucking Association, Michael DiBernardo, deputy executive director of marketing and customer relations at the Port of Los Angeles, Paul Bingham, director of transportation consulting at S&P Global Market Intelligence, and Will Mitchell, executive vice president of commercial operations at Forum Mobility.
Here's a recap of the Southern California Supply Chain Meetup:
Advanced Clean Fleet rule: enforced or on hold?
The ACF rule requires fleets to transition to zero-emission vehicles and make a significant portion of their new purchases zero-emission trucks. But the rule is in a legal gray area, and the state of California may need a waiver from the federal government to enforce the rule. Adding to the uncertainty around ACF is the upcoming change in the new administration.
“We can’t say for certain that whatever Trump is going to do is going to result in this waiver going away. It's still flapping in the wind,” Schrap said.
The concern among drayage trucking companies is, how will they afford this transition. Where will they charge the vehicles? Will shippers compensate fleets for equipment costs?
The Ports of LA and Long Beach are assessing a fee for diesel trucks coming into the port and using that money to give out vouchers to help purchase zero-emission trucks. They’re also putting the funds toward developing electric infrastructure. Forum Mobility recently set up a big charging depot at the Port of Long Beach.
“It's incumbent upon companies like us to make sure [fleets] have ready access to infrastructure,” Mitchell said.
Regardless of ACF’s fate, ports and their partners are committed to practically advancing lower-emission goals. Around 450 ZEVs operate at the port complex now. “I think you're going to see that number double, potentially even triple, in 2025,” Mitchell said.
Shippers and EVs: willing to foot the bill?
Buying a new electric truck is a huge cost for carriers. The cost of a new Class 8 EV can be nearly three times more than a new diesel truck – not to mention used diesel trucks, which many smaller fleets purchase.
Carriers are often interested in transitioning to EVs but can’t afford it or don’t have a commitment from customers necessarily to make the switch worthwhile. “To be completely honest, BCOs who are willing to pay a premium for zero emission loads are few and far between,” Mitchell said.
His organization has tried to flip the switch, working with consortiums of BCOs to bring awareness to the benefits of working with carriers with zero-emission trucks, and showing that it can be done in a way that doesn’t disrupt business. Shippers could pay a premium or sign a longer term contract, which would help carriers offset some of the upfront costs of a new EV.
“We're already starting to see companies that have strong ESG commitments recognize that they're going to want to continue to maintain that leadership position. And this is an opportunity for them to do that,” Mitchell said.
Trucking volumes: declines or relocations?
Import and export volumes at ports this year will be closely tied to trade policy under President Trump. If higher tariffs are imposed, imports and export volumes will drop – “no question about it,” according to Bingham.
The anticipation of higher tariffs is shifting freight patterns. Supply chain managers have started to pull forward some inventory to avoid tariffs that may take effect soon after Trump takes office.
Plus, a potential strike at East and Gulf Coast ports and piracy in the Red Sea has led some shippers to redirect freight to West Coast ports.
These are some reasons why DiBernardo predicts 2025 will be one of the Port of LA’s best years. With tariffs, cargo could move from China to destinations in Southeast Asia, which would still be closest to the U.S. West Coast ports. The on-dock rail network in LA and Long Beach transfers cargo quickly inland, which also makes the ports compelling destinations for BCOs.
The freight recession: an end in sight?
Another big question mark is when the current freight recession might end. Schrap has heard from members that they’re moving more freight compared to a year ago but making less money. Relationships with shippers have been contentious too, with some BCOs chasing the lowest possible rates and pricing being squeezed for drayage carriers.
“I know multi-generational trucking companies that have gone out of business because they have customers who have left them for a cheaper rate,” Schrap said.
While consumer spending and demand have remained resilient, industrial production has been weak. Bingham said S&P forecasts a very mild recovery this year: “If we have the full across-the-board tariffs imposed and retaliatory tariffs, that may impede some of the manufacturing demand on the export side.”
2025 is guaranteed to bring plenty of uncertainties and unexpected challenges for supply chain professionals, drayage trucking companies, brokers, and BCOs. This makes it more critical than ever to prioritize clear communication, foster strong relationships, and remain agile in navigating the complexities ahead.
